All About Conversion Tracking
PART 1: KNOWING THE LANGUAGE
You may have read articles about “conversion tracking,” but it’s probably one of the most misunderstood aspects of online marketing, one that brings to mind many questions. How does it work? What technologies should you use? Why do different systems count conversions differently?
This series of posts will help you understand conversion tracking, how it works, and what options you have on our platform for measuring conversions.
Sure, this may be a refresher for many of you, but there are plenty of marketing professionals who’ve been thrust into a role of managing campaigns without truly understanding how conversion tracking works. And knowing about these issues is essential to running an effective e PPC campaign.
So let’s run down a list of terms that SEM professionals use when discussing these concepts:
When you track conversions, you’re recording various events that take place when users visit your site. Those actions are called “conversion events.” Examples could be page views, sign ups, or actual sales. Some of these conversion events are worth tracking, while others are not. The decision to track a specific type of event depends on the nature of your business and your campaign optimization goals.
If a user takes a specific action that you’ve defined as a conversion event, the platform you use should record that event. Some events may be more likely to lead to a sale, so you can assign a specific value to that event. For example, a page view might be assigned one value, while a signup might receive a higher value.
Tracking conversions can help you measure the effectiveness of various inbound sources of traffic. Comparing your total traffic against conversion events gives you your conversion rate. For example, for many paid search campaigns, a conversion rate might be calculated like this:
Conversion Event/Total clicks = Conversion rate
This represents the percentage of total clicks that generated conversion events. But whether a specific event is an actual “conversion event” depends upon how you set up your tracking system.
WHERE IT GETS CONFUSING: NOT ALL CONVERSIONS ARE ALIKE
A “conversion” may represent different actions depending upon how you measure what users do on your site. And that can get confusing because some advertising executives may only consider an actual sale to be a conversion, while others may consider intervening actions, such as filling out a form, downloading a white paper, etc. to be conversion events as well.
So there might be multiple conversion events that lead to one conversion, perhaps three different events – or even more, as shown here:
Conv. Event 1 + Conv. Event 2 + Conv. Event 3 = Conversions
And that means each person’s analysis of the conversion rate can be different. Let’s look at an example of how multiple conversion events might be tracked
• You receive 100 clicks on an airline paid search ad
• 98 visit your pricing page – so you have 98 “page views”
• 25 forms are filled in to get airline prices, which you might define as “leads”
• 3 users actually book airline tickets so you have 3 “sales”
So what’s the conversion rate? That depends on how you measure it. You could view it in a number of ways
• 98% (98 page views / 100 clicks)
• 25% (25 leads / 100 clicks)
• 3% (3 sales / 100 clicks)
• 126% (98 page views + 25 leads + 3 sales / 100 clicks)
You can see how this can get confusing. If you refer to a sum of all different types of conversions, you might not be speaking the same language as someone who is mostly concerned with the total number of actual sales.
Most search management technologies consider conversions to be the sum of all the different types of conversion events that you define. So to build a customized plan to optimize your campaign, you’ll need to make sure you know precisely what these terms mean.
So to review:
• Conversion: An action you want someone to take on your website
• Conversion tracking: The practice of tracking and assigning value to the conversion event
• Conversion events: Specific types of events you track and assign values to
In the next post in this series, we’ll discuss some of the common ways people use technology to implement conversion tracking solutions to track specific types of events.