Digital Media Metrics

Conversions in marketing


What is a conversion is and why it is important to track them?

Conversion calculator


Impressions or clicks:
Conversion rate: %
Conversions:

Related metrics

CPA - cost per acquisition Click

What is a conversion in digital marketing?


In digital marketing, a conversion is an event that is tracked and recorded when a campaign goal or interaction is complete. In a lot of cases this will mean a sale.

For example, if a user clicks on a PPC search ad and buys a t-shirt from the landing on the advertiser page, that would count as a sales conversion. A conversion is tracked via a conversion pixel - javascript code that fires when a conversion event has been triggered - which communicates to the ad server or system informing it that a conversion has occurred. This conversion will then be attributed to the ad that influenced the conversion (please see below for different types of conversion attribution).

Other conversion types could include clicks on a URL, a landing page visit, a newsletter sign-up, a white paper or brochure download, or a telephone call via a number that is linked to the digital campaign. Any trackable action or event that the marketer can add a conversion pixel to will count as a conversion.

In analytics systems (e.g. Google Analytics), these are often referred to as “events” rather than conversions.

Conversion formula


To estimate the number of conversions, you will need the following metrics:

1. Impressions or clicks delivered

2. Conversion rate

ad-conversion-formula-equation

Why is it important to track conversions?


The primary reason for tracking conversions is to understand the efficacy of each digital channel, vendor or ad. For example, if you run an e-commerce website and do not know which of your ads are driving sales, you could be potentially making poor use of your budget. Once conversion tracking is set up, you will be able to understand which tactic or strategy is driving the most efficient or highest value conversions. As you test and learn, you will be able to confidently shift budget to better performing areas to make the most effective use of your marketing spend.

Alongside conversions, it is important to measure the conversion rate (of impressions or clicks to conversions) and the cost per acquisition (CPA) to fully understand how hard your activity is working.

You should set up and track conversions in a way that reflects your marketing funnel. Once you have your funnel fully tracked, you will be able to understand where people are dropping off as they are pushed down the funnel as well as create lookalike audiences from the high value converters.

Click-through and View-through Conversions


There are two types of conversions that are typically tracked in ad servers: click-through and view-through conversions, also referred to as post-click or post-view conversions.

If view-through conversions are ignored, you could be not giving enough credit to the digital channels or formats that are influencing a conversion. Both types must be tracked and considered when evaluating the results of a campaign.

Conversion window


A conversion window is set up to define the number of days or time that the impression's influence will be valid for to count towards influencing a conversion. For both types of conversions (click and view), users often do not convert at the time of being served the ad. This means we need to define a window of influence that we feel is enough time for the user to still be influenced by it before converting.

If this window is too long, we may be giving too much credit to the ad if a user converts, for example, 30 days in the future, when in reality the influence of the ad might have worn off by then. For the inverse with a too smaller window, may be under-attributing the effect of the ad.

When defining a conversion window, you should take into consideration the purchase or converting cycle of the product or service. A more expensive product will likely need a longer attribution window as people take longer to research and consider than a lower cost item before converting.

Conversion attribution


Conversion attribution falls into either single-touch or multi-touch. Single-touch only looks at one ad impression while multi-touch takes into account multiple channels and ads.

Instead of looking at single conversions in isolation, setting up multi-touch conversion attribution will help you understand the path to conversion and which touchpoints the user was exposed to throughout the journey. In the real world, the user will be likely exposed to many ads before finally converting; conversion attribution modelling will alleviate these shortfalls.

In multi-touch attribution, giving different weightings to each channel or touchpoint allows you attribute the conversion across multiple touchpoints rather than the one that the user saw last before converting.

The most commonly used single-touch and multi-touch conversion attribution models are as follows:

Related reading


CPA - cost per acquisition - Click -