It is essential to understand how to interpret and analyze conversion data in order to leverage your ad channel performance and achieve your account goals.
Conversion data is the indicator of understanding whether your campaigns are succeeding or struggling. Determining what you deem as a conversion is the first step, and the next step is collecting data on those conversions. Once data has accumulated, it’s then time to analyze and interpret that data to drive actionable insights. Mastering the means of interpreting your conversion data is critical in growing the success of your business.
What Is Conversion Data?
A conversion measures how users interact with your website and tracks actions such as making a purchase, placing a phone call, engaging in a chat, or completing a form. The first step is to decide what conversions you want to track and what they mean to your business. Once you have those in place, you can set up conversion tracking to track those conversions. Google Tag Manager is a great tool to do that. You can work with your site developer or paid search team to set those up, as each platform works a little differently.
Once conversions are set up, it’s time to dive into the metrics.
Examples of Conversion Metrics:
- Conversion Rate: The percentage of ad click visitors who complete a desired action.
- Cost per Conversion: The cost to acquire each conversion. It’s the cost of the clicks divided by the number of conversions. If you have $100 in cost and received five conversions, your cost per conversion would be $20.Â
- Conversion Value: Revenue generated from a conversion. This only works if you are tracking revenue from your ecommerce site or you have assigned a value to phone calls, chat engagement, or form completion.
These three metrics are crucial for measuring the success of your paid Search campaigns, but their true value comes from analyzing them to reveal deeper insights.
Determine & Interpreting Your Conversion Data
Effective analysis begins with setting well-defined goals, understanding key performance indicators to measure those goals, and understanding the value of your conversion sources. Ask the following four questions:
- What do I want to track as a conversion?
- Purchase, lead form, phone call, etc.
- What is the desired outcome/goal?
- Increase revenue
- Drive more leadsÂ
- What metric will be used to measure my goal?
- More revenue at or above a certain ROAS target
- More conversions at or below the CPA target
- Do I value my conversion sources differently?
- i.e.: Is a phone call more profitable than a form fill?
Having clear goals ensures that the analysis of your conversion data remains focused and relevant. Without defined goals, you risk chasing data without direction and spending unprofitably.
Analyzing Your Conversion Data
Use the following four tips to analyze your conversion data:
- Identify what channels/campaigns are driving the best results
- Which traffic sources are driving the most conversions and/or revenue?Â
- Which campaigns drive a more efficient ROAS and/or lower CPA?
- Drive into your desired goals
- Allocate budget to channels that are most effective
- Adjust targets (ie: ROAS, CPA)
- Adjust daily budgets accordinglyÂ
- What messaging resonates best with your key demographic?
- What is enticing users to click through on your ad and get to your website?Â
- What web pages are driving higher conversions?
Pulling It All Together
Interpreting conversion data begins with defining what a conversion means for your business. Next, determine how to measure the success of those conversions and analyze/optimize the data to align with your conversion goals. By understanding your conversion data, you can allocate your budget to the most effective sources. The ability to effectively analyze conversion data on a regular basis allows you to make informed decisions to support your business goals.
