How to value an email signup
An email signup is not worth anything on its own. Nobody has ever deposited a subscriber. It is worth the money it eventually turns into, multiplied by the odds that it turns into any, and that is the whole formula. The reason this matters right now is that Performance Max, Demand Gen, and every value-based bidding strategy Google offers will optimize toward whatever number you hand them. Hand them nothing and every signup is worth the same as every other one. Hand them a made-up number and they will chase it faithfully.
There are two honest ways to get that number, and this calculator runs both. Cohort math looks forward: take a fresh subscriber, ask what share of them ever become customers, and multiply by what a customer is worth. List history looks backward: take the revenue your email program produced last year, divide by how many subscribers you had, and extend it over how long people stay on your list. When the two agree, you can bid with confidence. When they disagree by half, which is common, you have learned something more useful than either number alone.
The formula
The cross-check runs the other direction:
Expected years on the list is not simply 1 ÷ churn. With annual churn c and discount rate d, it is the sum of (1 − c)t ÷ (1 + d)t across your horizon, which is what the calculator does. The first year counts in full because that money arrives now.
Worked example
An online shop: $80 average order, 2.5 purchases a year, 60% gross margin, 40% first-year retention then 65%, over 3 years at a 10% discount rate. That makes a customer worth $189.42 in discounted gross profit.
4% of new subscribers eventually buy, measured across 2,000 signups. Cohort value: 4% × $189.42 = $7.58 per signup. Because that 4% came from a real sample, the honest range is 3.23% to 4.95%, which is a signup worth $6.11 to $9.38.
The cross-check: $240,000 of email revenue against 20,000 subscribers is $12.00 each per year, times 60% margin, times 2.04 expected years on the list at 30% churn, equals $14.70. The two methods are 48% apart, and the lower one is the one to bid on.
Why the two methods disagree, and which one to trust
The list figure is almost always higher, and the reason is worth understanding rather than explaining away. Your existing list is not a random sample of new subscribers. It contains everybody who has already bought from you, sometimes repeatedly, and their purchases get credited to email whether or not email caused them. A customer who was going to reorder anyway, and happened to click a newsletter on their way to the checkout, inflates that number every single month.
Cohort math has the opposite bias. It only counts people who convert inside your measurement window, so it undercounts the slow burners, and it says nothing about subscribers who never buy but forward your emails to people who do.
The practical rule: when the two disagree by more than about 30%, bid on the lower one. You can always raise a conversion value once the campaign proves itself. Getting it back down after three months of overpaying is a harder conversation.
The double counting trap
Here is the mistake that quietly wrecks Performance Max accounts. You set your newsletter signup as a primary conversion worth $7.58. You also track purchases as a primary conversion, valued at the order total. Somebody signs up, then buys three weeks later, and Google counts both. Your reported conversion value now contains the same money twice, your ROAS looks great, and the bidding algorithm is optimizing toward a fiction.
There are two clean ways out. The simplest is to make the purchase your primary conversion and mark the signup as secondary, so it is observed and reported but not bid on. The better one, if signups genuinely drive revenue you cannot see (offline sales, phone orders, purchases outside the attribution window), is to keep the signup primary but value it at only the part your purchase conversion never reports. That is what the overlap field does: enter 60% if your purchase tracking already captures roughly 60% of what a subscriber is worth, and the calculator credits the signup with the remaining 40%, here $3.03.
The thing that actually improves bidding
A point almost nobody makes: multiplying every conversion value by the same number changes nothing about how the algorithm bids. Double all your values and Smart Bidding makes exactly the same decisions, because the ranking between them is identical. All you have changed is the ROAS target you need to type in.
What genuinely improves performance is the ratio between different conversion actions. If a newsletter signup is worth $7.58 and a demo request is worth $120, that 1 to 16 relationship is the real instruction you are giving the machine. So the goal is not decimal-point accuracy on any single value. It is putting every conversion action on the same basis (gross profit, same horizon, same discount rate) so their relative weights are honest. Google's own guidance on Smart Bidding needs roughly 15 to 30 conversions in the last 30 days before target ROAS has enough signal to work with, and most practitioners want to see 30 to 50. If a signup is your only volume, that is a strong argument for valuing it properly rather than turning it off.