Conversion tracking is when a brand monitors the actions consumers take toward the completion of a business goal. These actions can include signing up for a newsletter, downloading a content offer, or adding an item to a cart. Conversion tracking is a way to determine the effectiveness of an advertising campaign, design change, and other marketing components as consumers move toward conversion.

What Conversion Goals Should Be Tracked?

Conversion tracking tools like Google Analytics require account managers to define measurable goals for conversion. Goals are typically connected to specific pages, events, or other products and services.

Examples of Conversion Goals:  

• Direct people to a physical store location
• Increase site visitors
• Contact a business via call or message
• Add item to cart
• Make a purchase
• Sign-up for a newsletter
• Download content offer
• Play a video

By tracking conversions, businesses determine their most valuable marketing channels via conversion attribution or giving a particular channel credit for a conversion. They have greater insight into how to allocate their marketing budget and resources based on their highest-performing channels for conversions, such as social media networks.

Tracking the Right KPIs

There are a variety of key performance indicators related to conversions themselves and other metrics that suggest the effectiveness of conversion efforts.

Examples of KPIs for conversion:  

• Number of conversions
• Conversion rate
• Cost per conversion/acquisition
• Bounce rate
• Pages per visit
• Hits on destination page
• Events (played videos, download content)
• Session duration

KPIs like conversion rate evaluate conversions themselves while metrics like events take into account actions that will eventually lead to conversions.

How do I calculate Conversion rate?

To calculate Conversion rate, divide the total number of conversions by your desired metric (clicks, ad impressions, sessions on-site, etc).

Your KPIs will indicate how well or how close you are to meet your goal. For example, if your goal is to increase the number of purchases for an e-commerce site, one target KPI is the number of customers who land on a “Thank you page” after buying an item.

You can also track KPIs for consumers who are close to meeting a conversion goal and then take steps to ensure the completion of your goal. If a customer adds an item to a shopping cart but abandons the cart, you can use a re-targeting campaign via Google AdWords to display ads for the abandoned items and increase the chance of a conversion.