Business Advertising

Conversion rate calculator

Ad spend

Impressions

Clicks

Conversions

Revenue

Conversion rate 5 %

100 ÷ 2000 × 100

The rest of the funnel

CPM 10

CPC 0.5

CPA 10

Click-through rate 2 %

ROAS 5×

Profit 4,000

Revenue per click 2.5

The highest-leverage number in the funnel

Conversion rate is conversions divided by clicks or sessions, as a percentage. One hundred conversions from 2,000 clicks is 5%. It is the single most leveraged number in a funnel, because it multiplies every cost above it.

How to calculate conversion rate

1 Decide the denominator — clicks, sessions or users — and keep it consistent.

2 Enter conversions over the same period.

3 Read the percentage, and the CPA it implies.

4 Test changes one at a time, and give each enough traffic to be conclusive.

Improving conversion rate is worth more than the same proportional improvement anywhere else, because it divides into every upstream cost at once. Doubling conversion rate halves CPA and doubles ROAS without touching a bid. It is also the hardest to move, and the easiest to fool yourself about: a 20% improvement measured on 200 visits is well within noise, and the sample size calculator will tell you how much traffic you actually need before a result means anything.

Questions

What is a good conversion rate? −

E-commerce typically runs 1–3%, lead generation 5–15%, and a well-qualified checkout far higher. Compare against your own history first.

Clicks or sessions as the denominator? +

How much traffic do I need to test a change? +

Why is conversion rate so important? +

Should I count micro-conversions? +

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