Offline conversion import (OCI) uploads conversions that happen after the click, such as a qualified lead or a closed deal, back into Google Ads using the click id (GCLID). It teaches bidding to chase revenue, not just form fills.
How it closes the loop
When someone clicks an ad, Google stores a GCLID. Capture that id 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.