Consent Mode governs how Google's tags behave based on a user's consent choices. Version 2 added two signals, ad_user_data and ad_personalization, and made them mandatory for using European Economic Area audiences in Google Ads. Getting it slightly wrong shows up as a conversion cliff.
Why the drop is usually measurement, not performance
If consent defaults are misconfigured, tags fire before consent is read, or conversion modeling is not active, Google simply stops counting conversions it can no longer observe. The campaigns are performing the same; the dashboard just went dark. Panic-editing bids at that point makes things worse.
The correct setup
Set consent defaults to denied before the tag manager loads, then update on the user's choice, so GTM and Google's tags read the right state. With conversion modeling, Google estimates the conversions it can no longer observe. How much it recovers depends on the implementation: advanced consent mode sends cookieless pings when consent is denied, which Google can model from; basic consent mode blocks the tags until consent and recovers far less. The order of operations is where most implementations break.
Recover the signal
Pair Consent Mode with enhanced conversions and server-side tracking to recover as much measurement as the rules allow. Done right, you stay compliant and keep a usable signal; done wrong, you fly blind for weeks.
Common questions
Why did my conversions drop after enabling Consent Mode?
Usually a configuration issue: consent defaults set wrong, tags firing before consent is read, or modeling not active. It is a measurement drop, not necessarily a real performance drop, so do not panic-edit bids.
Is Consent Mode v2 mandatory?
To use European Economic Area user data for Google Ads personalization and remarketing, yes. Without the v2 consent signals, those audiences stop populating.