This article should be referenced to get an understanding of what Floodlight tags are, and what they are designed to accomplish. This article is an overview, and more information can be found via Google Support for more details.

Google's Guide to Floodlights

https://support.google.com/campaignmanager/answer/2823388?hl=en

What is a Floodlight Tag?

This is tag that is installed on pages within your website. It captures information from users who visit your website via our Advertising efforts and sends information back through their respective platform (CM, AdWords, Facebook, etc).

Purpose of Floodlight Tags

It traces the steps users are taking throughout their journey on your website. This allows advertisers to monitor the entire consumer journey, optimize around their actions, and create custom content.  

Reporting with Floodlight Tags

Floodlight tags not only allow you to create custom audiences, but also compile data pertaining to the actions of consumer from beginning to end (seeing an ad, up until converting). By monitoring the steps of the consumers, we can draw insights & conclusions as to what is attracting or deterring them and optimizing around their actions. This also allows us (the agency) to assign values to initiatives that were a direct result of our efforts.