How it closes the loop
When someone clicks an ad, Google stores a GCLID. Capture that id (and, for enhanced conversions for leads, the lead's email) with the lead, and when the deal progresses in your CRM you upload the outcome against it. Now Google knows which clicks became real customers, not just which became leads.
Why it changes bidding
Smart Bidding optimizes to whatever you feed it. Feed it raw leads and it finds more lead-fillers; feed it qualified opportunities through OCI and it finds more buyers. This is the mechanism behind optimizing to a down-funnel event, and it is how you stop a campaign from scaling cheap, junk leads. We walk through the setup in offline conversion import: teach Google who actually closed.
Common questions
What do you need for offline conversion import?
You need to capture the GCLID and, for enhanced conversions for leads, the lead's email with each lead, store the outcome in a CRM, and upload conversions back to Google against them, manually, on a schedule, or via an integration.
Why use offline conversions instead of form fills?
Because form fills reward lead volume, not lead quality. Importing qualified or closed outcomes lets Smart Bidding optimize toward customers who actually convert.