Value-based bidding for B2B SaaS: stage values and lifetime value

Value-based bidding tells Google Ads what each conversion is worth, so Smart Bidding can spend more on searches likely to produce valuable customers and less on the rest. In B2B SaaS the value rarely exists at the moment of the click. You have to build it: estimate what a customer is worth over their lifetime, multiply by the chance that a lead at a given stage becomes a customer, and send that value back from your CRM.

Done well, it moves bidding from "more demo requests" to "more pipeline worth having". Done badly, it inflates targets, counts one customer three times and hands the budget to brand. The rest of this guide covers the formula, the data you need before switching, and the guardrails that keep it honest.

What value-based bidding is in Google Ads

Google Ads offers two value strategies. Maximise conversion value spends the daily budget to get the highest total value. Target ROAS does the same while aiming for a set return on ad spend. Since June 2026 Google again labels Maximise conversion value with a target as "Target ROAS" in the interface; the bidding behaviour is unchanged.

Google's current requirements:

• Two or more different values reported to your conversion goals, real or proxy.
• For Target ROAS, at least 15 conversions in the last 30 days at the conversion tracking level.
• Values reported for at least three weeks, or one to two conversion cycles, whichever is longer, before you switch.

Microsoft Advertising offers Maximise conversion value with an optional target ROAS on Search campaigns, fed by UET or offline conversion imports that carry a value.

How to assign a value to each funnel stage

The formula is simple:

Stage value = lifetime value × probability to close from that stage

Probability to close is the share of records that reached a stage and eventually became customers. Measure it on cohorts old enough to have finished a full sales cycle, or recent cohorts will understate it.

The table below is an illustration only. The lifetime value and close rates are round numbers chosen only to show the method.

Assumed lifetime value: €36,000.

The last column matters. If lead, SQL and opportunity are all primary conversions with their full stage values, a single customer who passes through all three reports €16,560 before closing. Two set-ups avoid that:

1. One primary stage. Pick one stage to bid on (usually SQL or opportunity) and give it the full stage value. Keep other stages secondary. Google recommends choosing a single stage of the lead-to-sale journey for bid optimisation.
2. Several primary stages with incremental values. Each stage adds only the difference from the previous one, so the running total always equals the expected value of the furthest stage reached.

Closed-won deals often arrive after Google's import window (90 days from the click for GCLID matches, 63 days for enhanced conversions for leads). Google also recommends conversion delays of less than seven days. That is why the value usually has to sit on an earlier stage. The set-up behind the imports is in how to send HubSpot and Salesforce pipeline data back to Google Ads.

Why lifetime value beats first-year contract value

First-year contract value is easy to pull, and it misprices the account. Two customers can sign the same first-year deal while one churns after a year and the other renews for five and adds seats. Bidding on first-year value treats them as equal and underfunds the keyword themes, company sizes and markets that produce the second kind.

Use lifetime value calculated the same way everywhere, for example average annual revenue × gross margin × expected customer lifetime in years. Where the CRM knows the segment at the point of conversion (company size band, plan, market), send a value per segment instead of one average. If your CRM connection sends a dynamic value per opportunity, multiply it by your lifetime factor before it leaves the CRM.

Data volume and when to start

Google's minimum of 15 conversions in 30 days is a floor. As a rule of thumb from the accounts we run, we want the value-bearing stage comfortably above that per bid strategy before switching, and we use portfolio strategies to pool smaller campaigns in the same market. If the SQL stage is too thin, move the value to an earlier stage and accept a noisier signal. Do not bid on a stage that arrives in monthly batches.

Moving from Maximise conversions or target CPA

Change one thing at a time so you can tell what caused any shift.

1. Import the CRM stages as secondary actions with values, and check match rates.
2. Change the bidding goal to the new stage while staying on Maximise conversions or target CPA. Google recommends optimising to the new goal before bidding to value.
3. Let values accumulate for at least three weeks, or one to two conversion cycles if that is longer.
4. Switch to Maximise conversion value. Either leave the target empty at first, or set it close to the actual return over recent weeks. Use a campaign experiment where volume allows.
5. Adjust the target in small steps and wait at least one conversion cycle between changes.

Maximise conversion value tries to spend the full daily budget, so set budgets you are prepared to spend before switching.

Guardrails and brand

Brand campaigns convert people who already chose you. Their conversions carry the same stage values as everything else at a fraction of the cost, so a portfolio that includes brand reports a high return and lets generic and competitor campaigns bid more loosely to meet the blended target. Keep brand on its own strategy, outside value-based portfolios, and read its contribution separately. A brand search incrementality test tells you how much paid brand adds at all.

Other guardrails we use:

• Report cost per SQL next to return on ad spend, so a rising return from inflated values is visible.
• Log every change to stage definitions or lifetime value. A sales team redefining an SQL changes values overnight.
• Keep values in one currency, normally euro, and alert when the average value per conversion shifts sharply.

When CRM data is not connected yet

Without CRM data in the ad account, a hobbyist and a 40-seat team evaluating a switch look identical to Smart Bidding. A common stopgap is to exclude your way to quality: remove consumer-style queries, block free and download seekers in every language you serve, and keep tutorial and job searches out. Separating exact and phrase match can also make cost per acquisition easier to read and control.

It is still a proxy. Exclusions remove traffic you judge to be poor, and bidding still cannot see which of the remaining leads produce revenue. The real fix is to send SQLs, opportunities and closed business with values, ideally lifetime value per cohort. See negative keyword lists for multi-market accounts for how we structure the exclusions in the meantime.

Check cohort data before excluding a segment

Free seekers, students and very small companies are easy to exclude. Check the data first. Three numbers settle it for each cohort: trial-to-SQL rate, trial-to-win rate and company size. Some segments that look low-value convert late and well.

With value-based bidding there is a middle option: keep the segment and give it a lower value, if you can identify it at conversion time from a form field or an audience list. Google's conversion value rules can adjust values by audience, location or device on Search and Performance Max.

If you do exclude a segment, reported conversions will fall. Agree that drop with stakeholders before you make the change, so it is not read as a performance problem.

Across European markets

Lifetime value differs by market because pricing, churn and deal size differ. Set values per market where the data supports it, or use conversion value rules by location. Do not compare returns between markets with different auction prices; compare each market with its own history.

First steps

1. Calculate lifetime value and close rate per stage from cohorts that have completed a full cycle.
2. Choose one primary stage or incremental values for several.
3. Import stages with values as secondary and let them run for at least three weeks.
4. Move brand out of the portfolio, then switch non-brand to Maximise conversion value.

This is how we approach bidding across paid search and measurement: values first, then targets.