Call conversion tracking measures phone calls generated by your ads. In Google Ads it covers two separate sources: calls placed straight from an ad (a call asset or call-only ad) and calls made to a phone number on your website after an ad click. Each is set up differently, and a call is counted only if it lasts at least a minimum length you set.
Two sources, two setups
Calls from ads are tracked by turning on call reporting, which routes the ad's call button through a Google forwarding number. Calls to a number on your website need more: a conversion tag plus a second snippet that swaps your displayed number for a forwarding number. Setting up one does not track the other, which is why so many call-driven accounts only capture half their phone leads.
Why it changes bidding, not just reporting
Untracked calls are not a cosmetic gap. Smart Bidding optimizes toward the conversions it can see, so missing calls make it move budget away from the traffic driving them. Set a minimum call length (30 to 60 seconds) so misdials do not inflate the count, and read the full play in a call from your ad is not a call from your website.