What is CPM?: Cost Per Thousand Impressions

If you’re new to the digital marketing scene, it may seem like there are endless acronyms to learn – PPC, CRO, CTR, and many more. One term you should learn and incorporate into your digital marketing strategy is CPM.

CPM means the cost per 1000 impressions. This is a useful metric to better comprehend the effectiveness of your advertising campaigns, and adds context to your ROAS and overall ROI for marketing efforts.

Learn more about CPM and how you can use it to improve your business’ marketing.

What Does CPM Stand For?

CPM actually stands for cost per mille, as mille is Latin for thousand. In this way, CPM means cost per thousand, referring of course to a thousand impressions.

CPM Definition

Now that you know where the “M” in CPM comes from, what does CPM actually mean? As stated, CPM measures the cost per one thousand impressions. Impressions are the number of times an ad is displayed and viewed by someone online. CPM, then, measures how much it costs to display your ad 1000 times, hopefully to a targeted audience and potential future customers.

CPM is a good metric when you want to assess how an ad campaign improved brand awareness, as it only looks at how many times the ad was seen, not how often it was clicked or how it led to conversions.

Cost Per Thousand Impressions

Different advertising models use different metrics. PPC campaigns, for example, would be more concerned with CPC, cost per click, since advertisers pay per click in that method. CPM is better used in ad campaigns that hope to spread brand awareness. While your ad can still be optimized for clicks and hopefully conversions on your website, CPM only looks at the cost to show the ad.

You can often better understand how effective an ad is by considering other metrics like click through rate, which tells you how many of those who saw the ad clicked on it. Click through rate does not definitively tell how worthwhile the CPM was, since those who did not click may still remember your brand and become customers in the future.

CPM Bids

When advertising and paying based on number of impressions, advertisers bid how much they are willing to pay as a CPM. Generally, an ad is run over a certain number of days, with a budget for the total length of the campaign.

Let’s say you want your ad to reach 5000 people per day, and your advertising budget is set at $20 per day. Your CPM would be $4 (see math below).

5000 people per day / 1000 impressions = 5

$20 per day / 5 = $4 per 1000 impressions.

Many people ask what a good CPM is, but there isn’t one correct answer. Your cost per 1000 impressions should be valued based on how valuable you believe those impressions are to your business. If you think showing the ad is worth it, you may be willing to pay a higher CPM.

When To Use CPM

CPM is a great way to pay for ads, depending on your goals. If you’re trying to improve conversions or sell a certain product, other marketing strategies are probably more effective, like pay per click, which would be measured using CPC instead.

CPM is a good metric to use when your goal is more about visibility than conversions or clicks. Of course, ideally people will see your ad and click through to convert, but basing your advertising cost on impressions is more about brand awareness. Use CPM if you’re trying to get your brand name out there, or to market a new deal or other new piece of information.

CPM is also helpful when advertising for a very targeted demographic. If you are placing the ad on a highly relevant website that is related to your brand, CPM will be helpful because those impressions may be worth more than random ad impressions on a broader site like Google.

CPM can also work in your favor when you are trying to convert, but make sure your ad is conversion rate optimized and that it is likely to drive clicks, conversions, or sales.

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SOV Meaning: Share of Voice

Digital marketing efforts are measured with a wide range of metrics, and there are many acronyms – CPC, CRO, CTR – that may be confusing to those not in the marketing field. One marketing metric you might not be familiar with is SOV: share of voice.

Read on to learn what SOV is, how it is calculated, and how you can use this metric to improve your business’ marketing and advertising campaigns.

Share of Voice Definition

A definition from Hootsuite defines share of voice as a metric that “helps you understand how your brand or company is performing in comparison to your competitors”.

TrackMaven states that share of voice “measures how much of the conversation with target consumers your brand owns versus your competitors”.

A more traditional definition from Brandwatch calls share of voice “how big your share of advertising is compared to all of your competitors”.

Share of voice used to measure only advertising, but now can be used to look at your performance compared to competitors across different marketing platforms. This metric essentially determines how much of the market your brand controls in your industry.

What is SOV?

SOV, share of voice, is an advertising metric that measures how much of the market your brand owns, relative to competitors. It essentially benchmarks your brand visibility within your specific industry. Share of voice refers to how much of the conversation (digitally speaking) your brand dominates.

The higher your brand’s share of voice, the more popular and relevant your brand is in your industry. A high SOV likely means you are an authority in your field, and therefore likely to win over potential new customers and gain better ad exposure and brand awareness online.

SOV usually refers to the share of voice in paid search advertising, like PPC campaigns. By this older definition, SOV refers to the amount of ad exposure you receive compared to competitors.

Now, SOV can be applied to more than just paid search. Compare SOV across metrics including social media engagement, SEO, overall profits or ROI, impressions, or any other metric in which you can measure your hold on the market compared to competing businesses.

Share of Voice Calculation

Share of voice can be calculated for a few different metrics, but the general calculation is as follows:

(Your Brand Metrics / Total Market Metric) x 100 = Share of Voice

Depending on which metric you want to measure, you may be able to calculate SOV yourself. Often, it is easier to use an analytics tool like Google Analytics, Google Adwords, or some other analytics software.

Why You Should Measure SOV

Share of voice can be a useful metric to consider, especially when looking for a competitive analysis of how your business is performing relative to others in your industry. SOV tells you how your business fares compared to competitors, and tracking SOV over time can show you where you’ve lost or gained ground in your market.

Calculating share of voice across different platforms can also help you recognize where your business falls short. Maybe you have a dominant share of voice in your market on social media, but your SEO SOV is lower. This could tell you where you need to refocus your efforts and improve your business’ overall share of voice and marketing in general.

Tracking SOV can also tell you whether or not new ad campaigns or changes to your website, social media, or marketing strategy was effective. If you try a new ad campaign and your SOV declines, it may be a sign that your ad needs work.

Conclusion

SOV is a helpful metric to better understand how your business fares compared to competitors in your industry. Share of voice can help you see how much of the market you dominate, but it is far from the only metric you should consider when assessing your digital marketing strategy. Learn more key marketing terms and how to improve your marketing plan by visiting our blog.

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What is CTR? Understanding Click Through Rate

Marketers tend to throw around a lot of acronyms – CRO, CPC, PPC, ROAS. Most of these are metrics that inform us how marketing strategies and ad campaigns are performing. One such metric is CTR: click through rate.

Learn what CTR means, how it is applied to different marketing campaigns, and how to interpret it.

CTR Meaning

CTR stands for click through rate. Click through rate refers to how many people click on something after seeing it. CTR is commonly used in PPC (pay-per-click) campaigns, and tells marketers how many people clicked on their ad after seeing it. Click through rate can also be measured in some SEO analysis, email marketing, and in Facebook ads.

This metric is a good indicator of how appealing your ad or other online entity is, based on whether or not those who see it choose to click and learn more. A low CTR reveals that you should adjust your copy, creative, targeting, or some other aspect of your ad to get more people to click through.

Click Through Rate

Click through rate can be measured across different campaigns. Its most common use is in PPC ad campaigns, but CTR is also measured in organic search SEO, email marketing, and other ads like Facebook ads. We’ve broken down what CTR means for each of these marketing strategies.

CTR in PPC

In a pay-per-click campaign, businesses pay each time their ad is clicked. CTR is especially important for PPC campaigns, because it measures how many times their ad is clicked and therefore how much they pay. This measures both the cost of the campaign, since each click costs a certain CPC, and the efficacy of the campaign as each click brings traffic and hopefully conversions to a website.

A high CTR in PPC campaigns indicates that the copy, creative, or targeting is well focused and optimized. A low CTR reveals that either your targeting is off, or your ad is not appealing enough.

CTR is especially important in PPC because it affects your ad’s Quality Score, which in turn affects the cost per click (CPC). A great ad with a high click through rate will result in a better quality score, so your ads cost less to run, improving return on ad spend and overall ROI.

CTR and SEO

Websites that are search engine optimized will appear higher on Google’s search engine results pages (SERPs). Click through rate is often measured on websites set up with Google Analytics to get an idea of how often your link is clicked when it appears in SERPs.

A high CTR can help your SEO efforts; Google recognizes click through rate as an indicator of good, relevant content. If Google recognizes your website’s high CTR on organic search, it may move your website up higher in the search engine results. This will help your website’s SEO and increase traffic and therefore potential leads.

If you have a high CTR as well as a high bounce rate, Google may recognize that your content is not relevant to those search results and lower your ranking. This is another reason why quality content is important to SEO.

CTR and Email Marketing

Click through rate is also measured in email marketing. In this medium, CTR is not how often your email is opened (this is called an open rate), but it measures how often a link in your email is clicked.

Some emails may have various possible links for consumers to click through – you can set up tracking for all of these links. CTR reveals how often people actually engage with the content in your email and click to learn more, as opposed to just opening it to get rid of the notification in their inbox.

Click through rate is important to email marketing campaigns, as the point of sending your emails is probably to get users back to your website to learn more or convert into customers. If your emails have a low CTR, focus on the content and calls to action to drive more clicks.

CTR and Facebook Ads

Facebook ads are another lucrative advertising option that many businesses take advantage of. Facebook’s Ads Manager assesses various metrics on ads run on the platform, including CTR.

On Facebook, there are two different measurements of CTR. One is CTR for link clicks, meaning that a user clicked on a call to action or a link to open your ad. The other is CTR for any kind of click, including clicking to your Facebook page or anywhere else on the ad.

Facebook targeting is very specific, so click through rate can be a helpful indicator of whether targeting is off, or if you should adjust the copy or imagery of your ad.

Click Through Rate Calculator

Click through rate is a simple measurement. To calculate CTR, divide the total clicks by the total number of impressions on your ad (times it is viewed).

Total Clicks on Ad / Total Impressions = CTR

Usually, click through rate is already calculated for your through Google Analytics, Facebook Ads Manager, or another tracking tool.

What Is a Good Click Through Rate?

It’s hard to say what constitutes a “good” CTR. The prevailing opinion is that there is no set answer. CTR fluctuates from industry to industry, campaign to campaign, and even keyword to keyword.

A study by WordStream looked at average click through rates for various industries. They found that overall, a good average CTR for Google search network ads is 4-5%, while a good CTR for Google display network ads is lower, around 0.5-1%. Their results by industry are shown in the graphic below.

click through rate

Source: WordStream

Why a High CTR Can Be Bad

Obviously, you want people to click on your ads so that they learn more about your brand and potentially convert into customers. In general, marketers are aiming for a high CTR to show that their ads are relevant and driving traffic.

An extremely high CTR can be a bad thing, however, if users click on your ads and fail to convert or immediately leave the page. It’s vital to ensure that landing pages are CRO optimized to improve conversions. If your ad has a high CTR and a high bounce rate, it may mean that your ad offer does not match the landing page that it leads to.

A very high CTR combined with a very high bounce rate tells Google that your ad is not relevant, and could hurt its Quality Score in a PPC campaign, or lower search engine rankings in organic search. This can be especially detrimental in ad campaigns, as a lower Quality Score will increase the cost per click of your ad.

A high CTR, low Quality Score, and high CPC will result in an expensive PPC budget, as each click is more expensive but will not yield any profit if your landing page is not optimized for conversions.

Keep working to improve CTR, but track other important metrics as well, like conversions, bounce rate, and CPC.

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What is PPC? Pay-Per-Click Marketing

Of the many digital marketing-related acronyms (SEO, SEM, CRO, etc.), PPC may be one of the most common. PPC stands for pay per click, referring to a type of paid search advertising employed by companies everywhere.

PPC marketing is a popular method that drives traffic, leads, and conversions. We’ll go through the basics of pay-per-click marketing.

PPC Definition

PPC, pay-per-click, is exactly what it sounds like: this method of advertising costs the advertiser a certain amount of money each time their ad is clicked by a potential customer. This is essentially paid search traffic, as opposed to organically grown traffic through SEO.

PPC is mostly done through search engine advertising, namely Google and Bing ads. When you see the first results on search engines like Google with the “Ad” bubble, those ads are search engine advertisements most likely paid for through PPC. Advertisers only have to pay for each time their ad is actually clicked, not each time that it appears on a search engine results page.

pay per click

Pay Per Click Advertising

So how much is the cost of pay-per-click ads? Not all PPC ads are equal – some are more or less expensive, depending on factors like your ad’s relevance, the targeted keywords, audience targeting, and more. Each campaign has a different cost per click (CPC) depending on the ad and its targeting.

When running PPC ads, advertisers bid a certain amount they are willing to pay per click or bid a certain amount for an entire campaign over a certain period of time. If their ad is chosen for the search engine placement they bid for, they are then charged a specific fee each time their ad is clicked.

If a PPC campaign is being run correctly, the cost per click will be worth paying, because the visit to your website should be worth more in potential customer leads or future conversions.

Search engines like Google recognize relevant, high quality ad campaigns and reward them with a lower cost per click. This means that a good PPC campaign will be effective in targeting relevant new potential customers and will be cost-effective because it will have a low CPC and yield worthwhile conversions.

Improving PPC ads takes knowledge and testing. It involves finding the best PPC keywords, organizing keywords into ad groups and campaigns, setting up PPC and CRO optimized landing pages, targeting the right audience, and creating high quality advertisements.

Google Pay Per Click Ads

Since Google is by far the most commonly used search engine, it is also the most popular for PPC ads. Google Ads are created in a pay-per-click model, where advertisers can pay to have their ads appear before Google search results and on other Google-owned properties.

Google ads are selected based on Ad Rank, which measures CPC and Quality Score. CPC, cost per click, means that the Google favors the highest bid per click. Quality Score is a metric determined by Google that judges your ad based on its relevance, click-through rate, landing page quality, and more. Based on these two factors of Ad Rank, Google selects an ad from various bids to show as a result for the relevant keyword searches.

The exact auction system for Google PPC ads can be complicated, but essentially the better, more targeted your ads are, the more clicks you can get to your website at a cheaper cost. Since Google directs so much web traffic, creating high quality Google PPC ads can be an extremely lucrative marketing technique.

How to Improve PPC Campaigns

There are a few main factors that influence PPC ad campaigns, their CPC, and how relevant and effective they can be. Better pay-per-click campaigns will improve your overall ROI and more specifically ROAS – return on ad spend. To help improve pay-per-click-ads, improve upon keywords and landing pages to create better PPC campaigns.

PPC Keywords

Finding the right keywords is vital to an effective PPC campaign. Since most PPC ads are shown as search engine results, you’ll need to pick the most relevant keywords for your ads to appear under. Your list of PPC keywords should include long-tail variations, and both low and high search volume keywords, including of course the most relevant keywords to your ad.

Use relevant keywords that best match your ad and the product or services you are advertising. Your list of keywords should be long, including all of the long-tail infrequently searched terms as well so that you exhaust every possible relevant keyword. Check up on PPC campaigns, update keywords, and refine lists so that you keep the keywords as up to date and as relevant as possible.  

You can also add negative keywords – keywords you explicitly don’t want your ads to appear for. If there are related keywords that are close but not actually related to your brand, or keywords that do not convert well (like phrases including the word “free”) you can select against those keywords to keep your list relevant and reduce wasted clicks.

Landing Page Optimization

Optimize landing pages for each ad so that you can specifically appeal to users who clicked on that ad. Use CRO (conversion rate optimization) techniques on your landing pages to ensure that you convert as many possible visitors into leads or customers. Test for the best possible copy, creative, and format on your landing pages, and make sure your calls to action are clear and concise.

Landing pages are important to PPC because they factor into Google Ads’ Quality Score, so creating a good landing page is important not only to improve conversions, but to lower CPC and improve quality score.

Create Focused, Quality Ads

Ultimately, your PPC campaigns will be successful if you create quality ads with focused targeting. Consider your target customer personas and create ads that you think would appeal the them. The higher the quality of the ad, along with focused audience targeting, the higher your Google Quality Score will be, lowering CPC.

Create great ads to see great results, and keep updating and checking in on your ads to ensure that they are performing well and bringing in leads and conversions.

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What is CPC? Cost-Per-Click in Advertising

Digital marketers look at a wide range of metrics to measure their marketing and ad campaigns. One of those metrics is CPC, which stands for cost per click. CPC measures the cost per each individual click in a pay-per-click (PPC) advertising campaign.

The cost per click can change based on various factors. There are steps you can take to lower the CPC of your ads, thus saving money and improving ROAS, increasing ROI for your marketing efforts, and helping to generate more leads or sales while staying within your advertising budget.

CPC Meaning

As previously stated, CPC is an acronym for cost per click. This measures how much an advertiser would pay for each link click in a PPC (pay-per-click) advertising campaign. When running a PPC campaign, advertisers bid a certain amount that they are willing to pay per click. CPC is always less than or equal to that maximum bid.

CPC is usually determined based on your maximum bid per click, the Quality Score of your ad, and the ad rank of other competitor ads targeting the same keywords. Search engines like Google, the most popular platform for PPC ads, place ads by giving each one a Quality Score based on how relevant and well made the ad is, and by factoring in CPC.  

Ultimately, cost per click can be influenced by various factors. The CPC bid is a factor that determines Ad Rank, which is how Google ranks different ads applying for the same keywords. CPC is then calculated by taking a competing ad’s Ad Rank, dividing by your ad’s Quality Score, and adding 0.01. The formula looks like this:

(Competitor Ad Rank / Your Quality Score) + 0.01 = Actual CPC

This means that the higher your Quality Score is, the cheaper your cost per click. Because of this, it is vital to test different ads and always work to improve Quality Score. The best ads have the lowest CPC, which results in more clicks at a lower cost, improving the overall profits of your campaign.

What Is A Good Cost Per Click?

You may be wondering how much you should be paying per click. It’s hard to say what a “good” cost per click is – it depends on the quality of the click and how much you stand to gain with each click. Depending on how high your conversion rate is, PPC campaigns can be a waste of money or wildly profitable.

Consider some numbers: let’s say that your CPC is $2,  the service you sell is worth $100, and your conversion rate is 25%. If one in four clicks (25% conversion) results in a purchase, then every $8 you spend on that PPC campaign yields $100 in gross profits, $92 in net profits. That would be a very successful PPC campaign.

On the other hand, let’s say your CPC is $2, the service you sell is $10, and your conversion rate is only 10%. At these numbers, you would lose money, only making $10 for every $20 spent ($2 per click x 10 clicks for 1 conversion). With the same CPC, these two different ad campaigns have very different results.

Consider how much you’d like to make from an ad campaign and how often visitors to your site convert to determine what a decent CPC is for your specific business. Some companies can afford to pay more per click if it results in profitable conversions and a positive overall ROAS. If new customers have a potential lifetime value, factor that in as well.

How To Lower CPC

Your CPC can be lowered by improving the Quality Score of your ad. Quality score is based on a few different factors, including the ad’s click-through rate (CTR), relevance of keywords, and the overall quality of the ad and the landing page it leads to.

Test out different ad copy to improve the click-through rate and clicks in general on your ad.

Be sure to update keywords and include both the most relevant, highly searched keywords as well as lower search volume, long-tail variations.

Optimize landing pages for CRO (conversion rate optimization) and test out different copy, creative, and formatting to increase conversions.

Testing different ads can be vital to find the best combination of copy, images, format, and calls to action. Track ad performance using Google Analytics and stay up to date on what works and what doesn’t so that you make the most of your PPC ads, at the lowest possible CPC.

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What is CRO? What You Should Know About Conversion Rate Optimization

The world of digital marketing is full of acronyms and marketing terms that are often misunderstood by the general public. One such acronym is CRO – short for conversion rate optimization. To fully understand CRO, you need an understanding of what a conversion is, conversion rate, and how user experience affects conversions.

CRO Definition

CRO, conversion rate optimization, is the practice of increasing the number of conversions, or favorable actions, on a website. Website designers and digital marketers work to optimize a website to create better user experiences, so that visitors to that website perform a desired action. That desired action is called a conversion. Often conversions refer to customer conversion when sales are made, but there are other valuable conversions as well.

Conversion rate optimization requires making adjustments to a web page to find the most successful combination of copy, creative, formatting, and other factors. This often takes trial and error testing to see what is the most effective.

Understanding how to interpret analytics on a website is important to better understand conversion rate, customer journeys, and more to help optimize the page for conversions. CRO works to improve the percentage of visitors to a website the convert, so tracking the steps they take through a website helps to understand what factors work and what should be changed.

Conversion rate optimization improves ROI, ROAS, and the overall profitability of your business’ website.

CRO vs SEO

While both terms contain the word “optimization”, CRO and SEO are not the same. Many tend to confuse the two or misunderstand the difference.

In simple terms, SEO helps to optimize your website to drive traffic to it, while CRO optimizes your website for those visitors’ behavior once they are on your site. Both efforts ultimately attempt to improve the profitability of your website, but in very different ways.

CRO is all about customer experience on your website, so optimizing for conversions focuses on human behavior and considers what makes a person convert into a customer. SEO, on the other hand, is all about machine learning and works to optimize web pages to rank based on search engine algorithms, not based on user experience or human understanding.

What is Conversion Rate?

Conversion rate is simply the percentage of visitors to a website or specific landing page that convert by performing some favorable action. Since not all visitors to your website will perform the desired action, whether it’s a purchase, sign up, form submission, etc., it’s helpful to track conversion rate to know what percentage of visits are successful.

How To Calculate Conversion Rate

There are a few different ways to calculate conversion rate depending on your business, the products or services you offer, and the type of conversion you are looking for. In general, conversion rate is calculated by dividing conversions on a page by total visitors to that page.

One factor that plays into how to calculate CRO is whether or not a visitor can convert more than once. Websites that sell multiple products or repeat services can have the same customer convert multiple times, while a website selling a long-term subscription of some sort can only convert each customer once upon signing them up.

When a user can convert multiple times, conversion rate is generally calculated by dividing the number of unique conversions by the total number of sessions on a website. By unique conversions, we mean each single conversion, regardless of whether the same user converts more than once.

If a user can only convert one time, conversion rate is usually calculated by dividing the number of unique conversions by the number of unique users visiting the website. In this case, the denominator is unique visitors, not total sessions, since each can only convert once regardless of how often they visit the page.

Why CRO Matters

Conversion rate optimization is vital to increase conversions and therefore profitability on your website. While you may think a webpage is performing just fine, imagine if a small change could improve your conversion rate. It usually takes more than a single small change, but optimizing your website for conversions is extremely important and worthwhile nonetheless.

Conversion Rate Optimization Tips

Optimizing a website to improve conversions takes time and testing out different changes, so there isn’t one surefire tip for success: it depends on your website, your goals, and more. These tips are industry known best practices.

Think Like a Customer

To get customers to convert, think like one to better understand what drives some towards conversion and some away. If you’ve developed customer personas for your ideal target customer, consider what factors would influence their buying decision.

Check that any calls to action are clear and concise, and that landing pages are easy to navigate. Make it clear what the goal of the page is and work to improve user experience so that they are compelled to complete that goal.

Track Customer Journeys

Tracking customer journeys can help you better understand the flow of your website and where it can be improved. Set up Google Analytics for your website if you haven’t already to see where traffic goes and what pages have a high bounce rate.

Heat maps are also helpful to see what areas of a website page receive more clicks.

Test What Works

Perform A/B tests or multi-variable testing to see what elements on a website landing page are helping or hurting your conversion rate. A/B tests look at the difference in conversions when only one factor changes, while multi-variable testing looks at a few variables at once. Whether your website needs minor adjustments or more significant changes, testing can give helpful insight into what works best to improve conversions.

Run A Survey

Ask visitors directly what you can change about your website to improve their experience. Customer surveys offer different, human insights compared to web analytics and metrics. While they won’t be able to answer questions about conversions or technical fixes to your website, they can tell you more about their experience as a user that can help you understand how to improve your website pages.

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Conversion Marketing: What Is a Conversion?

Marketers are constantly talking about conversions – customer conversions, conversion rates, cost per conversion, conversion rate optimization – but what does this mean?

If the term conversion is going right over your head, we’ve got the answers for you.

Conversion Definition

According to the Oxford English Dictionary, the word “conversion” is defined as “the process of changing or causing something to change from one form to another”. Many people are probably familiar with this term as it relates to religious conversion or two-point conversions in football.

This is not the marketing definition of conversion, but it’s helpful to see how one translates to the other.

A conversion in marketing is when a visitor to your website completes a desired goal. In this way, they convert from visitors to leads or, if they purchase something, to customers. A conversion occurs when someone changes from a passive visitor to an active, interested visitor or customer.

Conversion Meaning in Marketing

As we’ve stated, conversions are essentially goal completions. The word “conversion” can be applied to any action that a user takes on your website that is valuable in some way. Since there are a wide array of actions that can be taken that may be valuable, conversions can be many things.

The ideal conversion is conversion into a customer, which occurs someone makes a purchase. Other conversions are valuable as well, however, and many smaller conversions are steps that can guide visitors to eventually convert into customers.

Conversions are also sometimes referred to as actions, events, goal completions, or leads.

What Is a Conversion?

So what exactly are conversions? Depending on your business, there are various possible conversions. The main conversions that marketers often refer to include:

  • Sales
  • Leads
  • Email signups
  • Form completions
  • Registration
  • Subscription
  • Visits to a key page
  • Phone calls (or other direct contact)

Not all of these conversions will apply to all businesses, and there may be other conversions your business can track. Anything that indicates customer interest or takes them a step closer in the buying cycle may be a conversion.

Why Do Conversions Matter?

Conversions matter because they make your business profitable. The ultimate conversion is a sale, but other conversions are valuable as well if they help you find leads and nurture them into paying customers. Even if you did not know it, or if you still do not fully understand conversions, they are valuable nonetheless.

The real question should be why tracking conversions matters. Tracking sales conversions is obviously important to know whether or not your business is profitable, but lesser conversions are helpful to track as well.

By tracking conversions, you can understand what interests your customers, what marketing tactics work, and where your marketing may fall short if users fail to convert. Tracking this information can help you adjust your website, marketing, and sales tactics to improve profitability.

Conversion Marketing

Digital marketers work to improve websites to increase conversions. Here are a few conversion key terms:

Conversion Rate: The percentage of visitors who convert after viewing an offer.

Conversion Rate Optimization (CRO): Optimizing your website to get more customers to convert.

Cost per Conversion: An advertising metric that measures the cost of advertising per the number of resulting conversions from that ad. Cost per conversion attempts to measure how much you spent to get each conversion, but can be harder to track because there may be different levels of conversion at different stages of the buying cycle. 

Marketing companies track conversions and  measure conversion rates to track how a website performs. They use CRO tactics to test and improve the website by changing the copy, images, layout, and more. If the CPC of an ad is too high, then the advertisement probably isn’t worth running and should be improved upon or scrapped.

Conversions and the data analyzing conversions are all used to better market your company or website to improve the bottom line.

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