Google Ads Conversion Tracking Using Google Tag Manager

From “Flying Blind” to Data-Driven Confidence

Are you tired of pouring money into Google Ads and feeling like you’re “flying blind”? It’s a common and deeply frustrating experience for marketers. Campaigns are running, clicks are accumulating, and the budget is being spent, but a nagging question remains: what’s actually working? This uncertainty leads to anxiety about wasted ad spend and the fear that money is being left on the table. Without clear data, decision-making is based on guesswork, and proving the value of marketing efforts feels nearly impossible.

This guide is designed to change that. Its promise is to walk through the process of setting up Google Ads conversion tracking using Google Tag Manager, step-by-step. While the process can seem technically intimidating, it is absolutely achievable. This guide will point out the common pitfalls so they can be avoided, helping build a tracking system that can finally be trusted. True confidence, however, comes not just from a technically sound setup, but from a deep understanding of why specific actions are being measured. By integrating a strategic measurement framework with the technical “how-to,” this guide offers a complete path forward. By the end, marketers will have a foundation for making smart, data-driven marketing decisions, optimizing campaigns for real results, and confidently demonstrating the return on investment.

Understanding the ‘Why’ Before the ‘How’

Before diving into the technical setup within Google Ads and Google Tag Manager, it is critical to establish a strategic foundation. The biggest mistake in measurement is starting with tools without first knowing what questions need to be answered. This section bridges that gap by integrating principles from the Actionable Measurement Framework, ensuring every technical step taken is grounded in a clear business purpose.

What is a Conversion? The Heart of Your Business Outcome

In the context of Google Ads, a conversion is not merely a technical event like a click or a page view. A conversion is a specific, valuable action a user takes that directly contributes to a desired Business Outcome . Every website exists to achieve outcomes, whether it’s growing sales revenue, increasing qualified leads, or building an engaged community. The conversion is the tangible user behaviour that makes that outcome happen. For example, the business outcome might be to “increase qualified leads.” The conversion action that facilitates this is a user successfully submitting a “Request a Quote” form. Reframing the goal in this way, from a technical task (“track form fills”) to a strategic objective (“measure the behaviour that generates leads”), is the first and most important step toward meaningful measurement.

Why is Tracking Conversions Crucial?

Without conversion tracking, marketers are operating on intuition and vanity metrics like clicks and impressions, which say little about actual business impact. This is the digital equivalent of “flying blind.” There are two primary, unassailable reasons why robust conversion tracking is essential for any serious advertiser.

First, conversion tracking is necessary to enable Google Ads optimization . Google’s Smart Bidding strategies, such as Target CPA, Target ROAS, and Maximize Conversions, are powerful machine learning algorithms. However, these algorithms are “starving for insights” if they are not fed accurate data. Conversion data is the fuel that allows these systems to learn which users, keywords, ads, and audiences are most likely to drive real business results. Without it, the algorithm can only optimize for clicks, which often do not correlate with sales or leads, leading to inefficient and wasted ad spend.

Second, conversion tracking provides the data needed to answer Key Performance Questions (KPQs) . The true purpose of analytics is not to generate reports, but to answer important business questions that guide strategy. Conversion data is the raw material for these answers. KPQs are the questions that, when answered, provide the knowledge needed to improve results. Examples of KPQs that conversion tracking helps answer include:

• “Which marketing channels are most effective at driving qualified leads?”
• “What is our overall sales conversion rate from paid search?”
• “What is the return on ad spend (ROAS) for our top campaigns?”
• “Which ad copy variations lead to the highest-value customers?”

Answering these questions transforms a marketer from a campaign operator into a strategic business driver.

Macro vs. Micro Conversions (The ARC Framework)

Not all conversions are created equal. To understand their relative value, it is helpful to use the ARC (Aware, Review, Convert/Complete) framework, which maps the typical user journey.

• Aware: How users discover a business (e.g., through a search ad).
• Review: How users evaluate the offer (e.g., by reading product pages, watching a demo, or downloading a whitepaper).
• Convert/Complete: When users take the final action that achieves the business outcome (e.g., making a purchase or submitting a lead form).

This framework provides a powerful mental model for categorizing conversions and, critically, for telling Google Ads what to prioritize.

Macro-Conversions

A macro-conversion is the primary goal, the most valuable action a user can take. These are the behaviors that occur in the Convert/Complete stage of the journey, such as a completed purchase or a submitted “Contact Us” form. Because these actions directly generate revenue or qualified leads, they are the actions that Google’s bidding algorithms should be optimized for. This strategic concept maps directly to a critical technical setting in Google Ads. When setting up a conversion action, macro-conversions should almost always be configured as “Primary” actions . This explicitly tells Google’s Smart Bidding to find more people who are likely to perform this high-value action, aligning the campaign’s optimization directly with the core business objective.

Micro-Conversions

A micro-conversion is a valuable secondary action that indicates a user is moving through the Review stage of their journey. These are important engagement behaviors that often precede a macro-conversion. Examples include signing up for a newsletter, downloading a case study, watching a product demo video, or adding an item to a cart. While these actions are valuable signals of interest, they are not the ultimate goal. Optimizing a campaign for newsletter signups could inadvertently de-prioritize the more valuable goal of actual sales. Therefore, micro-conversions should typically be set as “Secondary” actions in Google Ads. This allows the marketer to track and observe these important engagements, and use them to answer behavioural KPQs like “Which content keeps visitors engaged longest?”, without having them influence the primary bidding strategy. This distinction prevents the algorithm from optimizing for a lower-value goal at the expense of the one that truly drives the business forward.

Laying the Foundation in Google Ads

The first critical step in the technical setup happens inside the Google Ads platform, not Google Tag Manager. This is where the “goal” or “conversion action” is defined. By following the strategic principles outlined above, each setting chosen in this section will be a deliberate, informed decision.

Step 1: Creating a New Conversion Action

To begin, a new conversion action must be created within the Google Ads account.

1. Log in to the Google Ads account.
2. In the top right corner, click the Tools and Settings icon (it looks like a wrench).
3. Under the “Measurement” column, select Conversions.
4. On the Conversions summary page, click the + New conversion action button.

Types of Conversion Actions and Their GTM Compatibility

Google will ask to select the kind of conversions to track. Before selecting one, it is helpful to understand the main types and how they relate to Google Tag Manager (GTM), the tool this guide focuses on.

Conversion Type	Description	Can it be tracked with GTM?
Website	“Actions on a website (e.g., purchases, form fills).”	Yes. This is the primary focus of this guide.
App	“In-app actions (e.g., installs, in-app purchases).”	Yes. Typically via GTM and Google Analytics for Firebase.
Phone calls	Calls from ads or a website.	Yes. GTM can track clicks on tel: links on a website. Call-only ads and call assets are tracked differently.
Import	“Offline conversions (e.g., a sale closing in a CRM).”	“No, but GTM is critical. GTM is not used for the import itself, but it is essential for capturing the click identifier (GCLID) on the website, which is later used in the offline import process.”

For this guide, the focus is on the most common and crucial type for most businesses: Website. Select it, enter the website domain, and click Scan.

Step 2: Choosing Your Settings (and What They Actually Mean)

After scanning the site, Google will present options to create a conversion action. It is best to set it up manually to have full control and understanding. Scroll down and click + Add a conversion action manually. This is where many marketers feel overwhelmed, but each setting has a clear purpose tied directly to business goals.

• Goal and action optimization: This setting is how instructions are given to Google on what is most valued. As discussed in the previous section, Primary actions are used for bidding optimization, while Secondary actions are for observation only. For a core business goal like a contact form submission or a purchase (a macro-conversion), this should be set to Primary.
• Value: This setting is critical for calculating return on investment (ROI).
  • Use the same value for each conversion: This is best for lead generation, where each lead has a similar estimated worth. Even an estimate is far better than zero. A simple way to calculate this: if it is known that 1 in every 10 leads turns into a customer worth $500, then the value per lead is $50. This single step is the foundation for proving marketing ROI.
  • Use different values for each conversion: This is the standard for e-commerce, where the value of each purchase varies. This option requires a dynamic setup where the actual purchase total and currency are pulled from the website’s data layer on the confirmation page and passed into the conversion tag. This often requires developer assistance or a pre-built e-commerce integration.
  • Don’t use a value: This is not recommended, as it prevents the measurement of ROI.
• Count: This setting determines how conversions are counted after a single ad interaction.
  • Every: This should be chosen for sales or purchases. If a customer clicks an ad and buys three different items in three separate transactions, all three should be counted as valuable conversions.
  • One: This should be chosen for leads. If the same person gets excited and fills out the contact form three times in one session, it is likely desirable to count that as only one new lead. This setting prevents the inflation of lead generation numbers.
• Attribution model: In simple terms, attribution is how Google decides which ad click gets credit for a conversion when a customer interacts with multiple ads. Google’s default and recommended setting is Data-driven, which uses machine learning to assign credit based on how people engage with the various ads. For now, it is best to stick with this default. The primary goal is to get the tracking working correctly; attribution can be explored in more detail later once reliable data is flowing.

The table below provides a quick “cheat sheet” for these settings based on common business goals.

Setting	What it Means	Recommendation for E-commerce	Recommendation for Lead Gen
Goal Optimization	Tells Google’s bidding algorithm what to optimize for.	Primary	Primary
Value	Assigns a monetary value to the conversion for ROI tracking.	Use different values for each conversion (requires dynamic setup).	Use the same value for each conversion (based on an estimate).
Count	How many conversions to record per ad interaction.	Every	One
Attribution Model	How credit for a conversion is assigned to different ad clicks.	Data-driven (Default)	Data-driven (Default)

A Primer on Enhanced Conversions

Before moving to tag setup, it is important to understand a crucial feature called Enhanced Conversions. In an online world with increasing privacy regulations and the phasing out of third-party cookies, traditional tracking methods are becoming less reliable. Enhanced Conversions is Google’s solution to this challenge.

Conceptually, it is a feature that improves tracking accuracy by securely sending hashed, first-party data from a website to Google after a conversion occurs. This data can include an email address, phone number, or home address. The data is hashed using a secure one-way algorithm called SHA256 before it leaves the user’s browser, meaning it is anonymized and privacy-safe. Google then uses this hashed data to match conversions back to ad clicks, even when traditional identifiers like cookies are not available. This helps to “recover” conversions that would otherwise be lost, leading to more complete and accurate data, which in turn fuels smarter, more effective bidding.

While the detailed implementation of Enhanced Conversions is an advanced topic that often requires modifications to a website’s data layer, turning the feature on within the Google Ads UI is the first step. This signals the intent to use this more robust tracking method.

Step 3: Getting Your Google Ads Tag: The Conversion ID and Label

Once the settings have been configured and the conversion action saved, Google will present the tag setup screen. This is where the crucial pieces of information needed for Google Tag Manager are located.

1. Click on the newly created conversion action.
2. Under “Tag setup,” click the Use Google Tag Manager tab.
3. Two critical pieces of information will now be visible: the Conversion ID and the Conversion Label.

Think of these as the unique address for the conversion. The Conversion ID (which starts with “AW-“) is like a building’s street address; it’s the same for all conversions in the account. The Conversion Label is like the specific apartment number; it’s unique to this specific conversion action just created. Both of these are needed to tell Google Tag Manager exactly where to send the “success” signal. Keep this browser tab open or copy these values somewhere safe. They will be needed in the next part.

The Two Most Important Tags in Google Tag Manager

With the goal defined in Google Ads, it is time to move to Google Tag Manager (GTM). Here, the foundational tags that make all tracking work reliably will be set up. Getting these two tags right will prevent the most common and costly tracking errors. This approach represents a modern shift from adding single-purpose tags to establishing a robust, sitewide “tagging infrastructure” first.

Step 1: The Conversion Linker Tag – Your Key to Accurate Attribution

The Conversion Linker tag is non-negotiable for accurate tracking in the modern web. Its purpose is to help Google reliably connect the ad click that brought a user to a site with the conversion they complete later. In the past, this connection was made using third-party cookies. However, due to increased privacy regulations and browser changes like Safari’s Intelligent Tracking Prevention (ITP), the use of third-party cookies is being phased out. The Conversion Linker is Google’s solution. It works by storing the ad click information (specifically, the Google Click ID or GCLID) in a first-party cookie on the site’s own domain. This method is more durable, more privacy-compliant, and essential for making tracking work in today’s internet landscape. This tag is not just a technical step; it is a strategic adaptation to future-proof attribution.

Missing or misconfiguring this tag is one of the most frequent errors marketers make. It directly leads to underreported conversions in Google Ads. When Google Ads does not receive accurate conversion data, its automated bidding strategies cannot optimize properly, which means money is wasted on campaigns that appear to be underperforming. While some newer documentation suggests the main Google Tag can handle this function, the established best practice is to always include a separate Conversion Linker tag. It costs nothing and acts as a vital insurance policy for attribution, guaranteeing this crucial function is performed correctly.

How to set it up:

1. In the Google Tag Manager container, navigate to Tags in the left-hand menu and click New.
2. Name the tag something clear, like “Google Ads – Conversion Linker”.
3. Click on Tag Configuration.
4. From the list of tag types, choose Conversion Linker. No further configuration is needed in this section.
5. Next, click on Triggering.
6. Select the built-in All Pages trigger. This ensures the tag can capture click information no matter which page a user lands on from an ad.
7. Click Save.

Step 2: The Google Tag – Building Your Audiences and Powering Conversions

The next foundational piece is the “Google Tag.” This may be referred to in older guides as the “Google Ads Remarketing Tag,” but it has evolved to become the central tag for all Google Ads tracking and audience building. This clarification is important, as searching for the old name can lead to confusion.

This tag performs two critical jobs. First, it places a tracking pixel on every page of the site, which allows for the building of remarketing audiences. This means targeted ads can later be shown to people who have visited the site, viewed specific products, or taken other actions. Second, it acts as the foundational tag that specific conversion tags (like the one that will be created in Part 3) rely on to function correctly. It only needs to be installed once.

How to set it up:

1. In GTM, go to Tags and click New.
2. Name the tag “Google – Google Tag”.
3. Click on Tag Configuration and select Google Ads.
4. From the options that appear, choose Google Tag.
5. A field for Tag ID will appear. Here, paste the Conversion ID from Google Ads (the one starting with “AW-“) that was saved in Part 1.
6. Click on Triggering and select the All Pages trigger.
7. Click Save.

With these two tags configured to fire on all pages, a solid and reliable foundation has been built for all Google Ads tracking. This infrastructure ensures attribution integrity across the entire site and establishes the presence needed for both conversion tracking and audience building. Specific conversion events can now be layered on top of this robust platform.

Tracking a Specific Conversion

Now for the rewarding part: tracking a specific, valuable action that a user takes on the website. This is where measurement moves beyond basic page views and starts quantifying what truly drives the business forward.

Example: A “Contact Us” Form Submission

For this example, the submission of a “Contact Us” form will be tracked. While there are several technical methods to track form submissions, the most robust and easiest-to-debug approach for non-specialists is to track a page view of a dedicated “Thank You” page. This means that after a user successfully submits the form, they are redirected to a unique confirmation page (e.g., yourwebsite.com/thank-you). This provides a clear, unmistakable signal for GTM to track and is far less likely to break if the website’s code changes.

Step 1: Creating the Trigger

First, it is necessary to tell GTM what specific event to “listen” for. In this case, it should listen for someone landing on the unique “Thank You” page.

1. In GTM, navigate to Triggers in the left-hand menu and click New.
2. Give the trigger a clear, descriptive name. For example: “Page View – Thank You – Contact Form”.
3. Click on Trigger Configuration and choose the Page View trigger type.
4. Under This trigger fires on, select the Some Page Views option.
5. Now, set the conditions for when this trigger should fire. Set the dropdowns to read: Page URL | contains | /thank-you. (This should be replaced with the unique part of the confirmation page’s own URL).
6. Click Save.

Step 2: Creating the Conversion Tag

Now that the listener (the trigger) is created, the tag that sends the “conversion!” signal to Google Ads needs to be created. This tag will be connected to the trigger just created so it only fires when someone lands on the Thank You page.

1. In GTM, go to Tags and click New.
2. Name the tag clearly, for example: “Google Ads – Conversion – Contact Form”.
3. Click on Tag Configuration and choose Google Ads.
4. From the options, select Google Ads Conversion Tracking.
5. Fields for the Conversion ID and Conversion Label will now be visible. Go back to the Google Ads tab (or where the values from Part 1 were saved) and paste them into the corresponding fields.
6. Next, click on Triggering.
7. Select the custom trigger created in the previous step (“Page View – Thank You – Contact Form”).
8. Click Save.

How This Applies to E-commerce Purchases

The same principle used for a lead generation form applies directly to an e-commerce purchase. The trigger would simply be a Page View trigger configured to fire on the unique URL of the order confirmation or success page (e.g., Page URL contains /order-success or /checkout/thank_you).

The key difference is that for an e-commerce conversion, the tag would also need to include dynamic variables for Conversion Value and Transaction ID. These values are typically pushed to the website’s data layer by the e-commerce platform on the confirmation page, and GTM variables would be configured to capture them and pass them into the conversion tag. This ensures that Google Ads receives the actual revenue generated from each transaction, enabling accurate ROAS calculation and optimization.

The Power of Naming Conventions

As more tracking is added to a website, the GTM container can quickly become a confusing mess of untitled tags and triggers. Taking ten extra seconds to establish and follow a clear naming convention will save hours of troubleshooting in the future. A good practice is to use a Platform – Type – Detail format, like the examples used throughout this guide:

• Tags: Google Ads – Conversion – Contact Form or Google – Google Tag
• Triggers: Page View – Thank You – Contact Form

This simple habit makes the account instantly understandable, both for the original implementer and for any colleague or consultant who might work on it later.

“Trust But Verify” – How to Make Sure Your Tracking is Working

This is arguably the most important section of the guide. It is designed to build confidence and address the deep-seated fear that a mistake has been made or that the data is not accurate. The following steps will verify that everything built is working perfectly.

Using GTM’s Preview Mode – Your New Best Friend

Think of Google Tag Manager’s Preview Mode as a personal testing laboratory. It allows for seeing exactly which tags are firing on a site in real-time, before publishing the changes for the world to see. It is the best friend for ensuring a flawless setup.

1. In the top right corner of the GTM container, click the Preview button.
2. A new tab will open (tagassistant.google.com). Enter the website’s URL and click Connect.
3. The website will open in a new tab with a “Tag Assistant Connected” badge in the bottom right corner. The Preview Mode debug panel will remain open in the previous tab.
4. Test the foundational tags: Navigate to a few different pages on the site. In the debug panel tab, click on any of the “Page View” or “Container Loaded” events in the left-hand summary. The Google Tag and Conversion Linker tags should be listed in the “Tags Fired” section. This confirms the foundation is working correctly.
5. Test the conversion tag: Now, go through the exact steps a user would to convert. Fill out the contact form and submit it, or complete a test purchase. This should lead to the “Thank You” or order confirmation page. Look at the debug panel again. When landing on the confirmation page, a new page view event was triggered. Click on that event in the summary list. The specific conversion tag (e.g., “Google Ads – Conversion – Contact Form”) should now appear in the “Tags Fired” section.

Seeing that tag fire is the “Eureka!” moment. It is visual, undeniable proof that the entire setup, from the trigger conditions to the tag configuration, is correct.

Using the Google Tag Assistant Companion Chrome Extension

For an extra layer of validation, the free Tag Assistant Companion Chrome extension can be installed. This extension helps the GTM Preview Mode connect more reliably to the website and provides a quick way to see which Google tags are present on any given page, even outside of Preview Mode.

Checking the Status in Google Ads

After verifying everything with Preview Mode and clicking the “Submit” button in GTM to publish the changes, the final check is back in Google Ads. It is important to be patient; it can take a few hours, or sometimes up to 24 hours, for Google Ads to process the data and update the status of the conversion action.

The status can be found by navigating to Goals > Conversions > Summary and looking at the “Tracking status” column for the conversion action created. The following is a guide to interpreting these statuses to avoid unnecessary panic.

• Unverified: This means Google has not seen the tag fire yet. This is completely normal right after setup. If it stays this way for more than 24 hours after a known conversion has occurred (one can be triggered by clicking an ad and converting), it is a sign to go back and re-check the setup in GTM Preview Mode.
• No recent conversions: This status is a common source of anxiety, but it is actually good news regarding the technical setup. It means Google has successfully detected and verified the conversion tag, but there have been no conversions attributed to a Google Ad click in the last 7 days. The tracking is working correctly. This status is a signal to look at campaign performance (e.g., ad copy, landing pages, targeting), not a sign of a technical problem with the tracking implementation. Mistaking this for a technical error is a frequent pitfall that leads to unnecessary troubleshooting.
• Recording conversions: This is the goal! This status means the tag is working, and Google has successfully tracked conversions from ads within the last 7 days. Valuable data is now being collected to optimize campaigns.

Next Steps: From Tracking to Growth

Implementing conversion tracking is not the finish line; it is the starting line. With a reliable stream of data now established, the focus can shift to enhancing that data and using it to drive more sophisticated marketing strategies. Here is a clear, actionable roadmap for what to do next.

• Explore Enhanced Conversions: Now that basic tracking is working, the next logical step is to improve its accuracy. Work with a developer or use GTM’s built-in features to fully implement Enhanced Conversions. By passing hashed, first-party data, more conversions can be recovered that would otherwise be lost to browser privacy settings, leading to a more complete dataset and smarter bidding.
• Set Up Dynamic Remarketing: With the Google Tag now firing on every page, the foundation for powerful remarketing audiences is in place. The next level is Dynamic Remarketing, a highly effective tactic, especially for e-commerce. This allows for showing ads to past visitors that feature the specific products they viewed, added to their cart, or purchased. This requires connecting a product feed to Google Ads and adding custom parameters to the Google Tag, but it can deliver a significantly higher return on investment.
• Deepen Your Analysis with Google Analytics 4: To gain a truly holistic view of the customer journey, link the Google Ads and Google Analytics 4 (GA4) accounts. This integration unlocks two powerful capabilities. First, sophisticated audiences can be built in GA4 (e.g., “users who watched 75% of a video and visited a pricing page”) and then imported into Google Ads for highly targeted remarketing campaigns. Second, the full, cross-channel user journey can be analyzed in GA4’s reports to answer complex behavioral questions that Google Ads alone cannot, such as how organic search and paid social interactions contribute to an eventual Google Ads conversion.
• Review Your Attribution Model: At the beginning of this process, the advice was to stick with the default “Data-driven” attribution model. Now, with a steady stream of reliable conversion data, it is the perfect time to revisit this setting more meaningfully. Explore the different models available in Google Ads (e.g., Last Click, First Click, Linear) and use the Model Comparison report to understand how each model would re-distribute conversion credit across campaigns. This can provide a more nuanced understanding of how various touchpoints contribute to the final conversion.
• Schedule Regular Audits: The threat of “tracking degradation” is real. A website update or a plugin change can inadvertently break a perfectly good setup. To prevent this, formalize the monthly health check mentioned in the conclusion. Create a recurring calendar event, for example, for the first Monday of every month, to spend 15 minutes checking the tracking status in Google Ads and running a quick test in GTM’s Preview Mode. This simple, proactive habit ensures the data pipeline remains healthy and trustworthy over the long term.

Conclusion: You’ve Built a Foundation for Growth

Congratulations! A journey through one of the most challenging, and most valuable, tasks in digital marketing has been successfully navigated. Take a moment to appreciate what has been built. The days of “flying blind” are over. There is now a trustworthy system that provides the data needed to stop wasting money, optimize campaigns with confidence, and prove the ROI of marketing efforts to any team, boss, or client.

This is a powerful foundation. However, the digital world is always changing. The website will be updated, and platforms will evolve. This can sometimes lead to “tracking degradation,” where a setup that once worked perfectly can silently break over time. To stay ahead, it is a good practice to check the conversion status in Google Ads once a month. This quick health check can prevent weeks of lost data and ensure that the powerful system just built continues to serve as a reliable guide for growth.

Frequently Asked Questions