"Turn on enhanced conversions" is advice every Google Ads account gets sooner or later. It's good advice. The trouble is it's rarely explained, so people tick the box, half set it up, and move on.
Here's what it is, without the jargon.
Why you need them
Conversion tracking has always leaned on cookies. Someone clicks your ad, a cookie remembers the click, and when they buy or send an enquiry, the tag links the two together.
That link breaks a lot more than it used to. People say no to cookies. They click on their phone and buy on their laptop that evening. They use browsers that block tracking. Every time that happens, a sale your ad helped bring in goes missing from your reports.
So Google Ads ends up under-counting, and the bidding system is learning from half the picture.
What they actually do
When someone converts on your site, they usually hand over something that identifies them, like an email address or a phone number.
Enhanced conversions take that detail and hash it on your site before it goes anywhere. Hashing turns it into a long scrambled code that can't be turned back into the original email. That code is sent to Google with the conversion. Google compares it against signed-in users who saw or clicked your ads, and if there's a match, the conversion gets linked back to the ad.
Google never receives the actual email address, only the code, and the code only matches if it's the same email.
Why bidding cares
Smart bidding learns from the conversions it can see. When some of them are missing, it gets the wrong idea. Campaigns and keywords that are doing well look weaker than they are, money gets moved away from them, and the whole account learns more slowly.
Getting those conversions back isn't about prettier reports. It's about giving the bidding system better information to work with.
What changed this year
Until recently there were two separate versions: one for websites, and one for leads you match up later from your CRM. You had to pick a setup method too.
In 2026 Google merged them. There's now one on/off setting in the account, under the customer data settings, and the same switch on each conversion action. You can also send data from more than one place at once, so the website tag, Tag Manager and CRM uploads can all work together.
For most businesses that makes life easier. It also makes it simpler to do the bit that really pays off, which is telling Google what happened to each lead after the form: whether it became a proper opportunity, and whether it became a sale.
Setting them up
The screens move around, but the steps don't really change.
Start by accepting the customer data terms in Google Ads. Nothing works until you do. Then switch enhanced conversions on for the account, and check it's on for the conversion actions your bidding actually uses.
Next, make sure the tag can actually read the email or phone number when someone converts. Whether you use the Google tag directly or Tag Manager, it needs to pick that up from the form or the confirmation page.
Then test it. Send a real enquiry or place a test order, and check the diagnostics on the conversion action over the next few days. Google will tell you whether it's receiving data and how well it's matching.
If you're a lead business, go one step further and upload your qualified leads and sales from the CRM. That's usually where the biggest improvement comes from.
The privacy bit
Hashing protects the data on its way to Google, but your responsibilities don't go away. Your privacy policy should say that you share hashed data with advertising partners. Your cookie consent needs to fit the rules where your visitors are, which for the UK and EU means proper consent before advertising cookies. And consent mode should be set up so Google gets the right signals.
If you're not sure what applies to you, get proper legal advice. It's the part most people skip.
Where it usually goes wrong
The most common one I see is a setting that's switched on but receiving nothing, because the tag can't find the email field. The diagnostics would show it straight away, but nobody looks.
The second is having it enabled on a secondary conversion action and not on the primary one that bidding actually uses.
And the third is stopping at the form fill. Enhanced conversions help Google see the enquiry. The real value comes when you also tell it which enquiries became customers.