Definition:
Conversion Rate is the percentage of users who take a desired action after interacting with your ad or website. This action could include making a purchase, signing up for a newsletter, filling out a contact form, or any other goal defined by the advertiser.
How to Calculate:
The conversion rate is calculated using the following formula:
Conversion Rate = (Total Conversions / Total Clicks) × 100
For example, if your ad receives 100 clicks and results in 5 conversions, your conversion rate would be:
Conversion Rate = (5 / 100) × 100 = 5%
Why It Matters:
- Performance Indicator: A higher conversion rate indicates that your ad or landing page is effective at persuading users to take the desired action.
- Optimization Focus: Monitoring conversion rates helps identify areas for improvement in ad targeting, messaging, and landing page design.
- ROI Assessment: Understanding conversion rates is crucial for evaluating the return on investment (ROI) of your advertising campaigns.
