Conversion tracking is a process used by online advertisers to measure the effectiveness of their advertising campaigns.
First, let’s make sure to define our terms: What is a conversion? Conversions are actions that generate value for your company. You can track sales, leads, sign-ups, app downloads, or any other desired customer action.
Ideally, you should capture conversion data from every ad, article, website page, landing page, influencer post, or piece of content you create. This is called tracking attribution. If you know how a conversion happened and from what source, you can do more of what works and stop doing what doesn't. Don't worry — the technology exists to track these elements. We’ll get to those details after we talk about how important it is to track conversion actions.
What Are the Benefits of Conversion Tracking?
There are numerous benefits to conversion tracking, but the main one is easy: Conversion tracking helps you get better every time you advertise. This conversion data helps you plan for the future so you can optimize your key performance indicators (KPIs). You can also prove to leadership that your ad spends — the amount of money you're spending on ads — are generating a return on investment (ROI). This helps you justify future ad campaigns to your CFO or CPA.
This conversion data is absolutely vital for eCommerce brands. Since 4 in 5 ecommerce brand use this method for generating online sales, eCommerce marketers need to know the specific page or ad on their website that drives each conversion.
Even better is tracking the full customer journey that gets the buyer to the checkout. This includes a starting point like a Google Ads campaign, a social media post, or your mobile app. That step-by-step shopping process, paired with personal data gathered about the buyer, can help you ensure that future potential buyers find the same path.
The insight from conversion tracking metrics can help you:
- Find out which marketing channels, content of various types, and even the time, day, and season results in the best conversion rate.
- See if your numbers improve when you make changes to optimize your efforts.
- Find new opportunities based on what customers do on your website, how they interact on social media, and how they respond to your ads.
With this wealth of knowledge, you can make better choices for your next campaign. You may even learn new things about your customers that will help you make your products and services more compelling.
How Does Conversion Tracking Work?
The tech behind conversion tracking is simple in that it usually boils down to a snippet of code placed on a website. This code is called a conversion pixel, or a tracking pixel. When a user clicks on an ad and is taken to the advertiser's website, the pixel is triggered and records the conversion. The advertiser can then see which ads or content inspire users to respond to their calls-to-action.
Conversion tracking is also done with a simple URL that is provided for a specific marketing channel. This is handy for attribution as you'll know where any customer who comes to your page originated from, since each source has its own unique URL.
Google Analytics Is Vital
Google Analytics (GA) is the most popular tool for conversion tracking. Using GA, you can get the full story of the customer's journey on your website. While the system works well with your Google ads account, it will track website visits from anywhere.
By adding GA to your site, you can monitor every page a customer visits, the time they spend on each page, and the path they took to get to the checkout or whatever conversion page you have set up to track. You set the goals for GA to highlight based on what you know will help drive sales or conversions. For example, you may set a goal of driving people to a thank you page that means they signed up for your newsletter. GA will track that goal and report on your success right when you add it to your dashboard.
A close look at the data GA provides can offer more insight than just your raw goals. For example, you can track the number of pages viewed by customers who made a conversion versus those who did not. With this insight, you can craft more effective ways to lead your customers to the pages with higher likelihood of driving conversions.
A separate GA dashboard is used to monitor this data. While this tool can seem overwhelming, it's worth investing time to learn about how to configure your dashboard to track the actions that mean website conversions for you.
GA is a deep system. You can track basic site activity or grind down into each interaction customers have with your site. If you're not sure what to do, GA has drop-down options and templates that can guide you to the right choices. Don't forget to review the goals you have set up at least quarterly so you can optimize your efforts as you gain more data.
Alternative Attribution Tools
There are a few different ways to set up conversion tracking. Google Analytics is definitely the most common because it's inexpensive and efficient.
For those worried about Google’s Privacy policies, there are options that track your site without GA, so you do have some alternatives:
- HubSpot: This app is an ideal marketing all-in-one for small businesses. Features include conversion tracking on your site, powerhouse email marketing automation, and a solid CRM. They also offer discounts for startups.
- Segment: This app is focused on tag management and does a great job of capturing data to send to other tools. Used with other tools, you can powerfully slice and dice your data to get the insights you need.
- Mixpanel: Mixpanel is like GA, but the conversion and engagement data is more granular. Setup is tough, but if you need that laser focus, it’s worth it.
- Amplitude: The strength of this app is the reporting. Like Mixpanel, it’s more focused on conversions and engagement than sourcing your traffic like GA.
- MonsterInsights: This app is specific to WordPress, and it is installed as a plugin. It does an excellent job with that particular CMS (content management system).
Set Up Conversion Tracking for Your Business
All the aforementioned tools have their own strengths but since GA is the big player here, let’s go over the basics.
To use GA for conversion tracking, you need to add a code snippet to your website. This code is called the Google Analytics Tracking ID. Once you have added this code to your website, you can create goals in GA to track conversions.
Additionally, advertising platforms (such as Google AdWords) offer conversion tracking tools. Some changes are afoot with Apple's iOS to protect privacy, but GA remains the best game in town to track the activity of your customers.
Another popular method for conversion tracking is Google Tag Manager. This free tool allows you to manage all of your website's tags in one place. Once you have installed Google Tag Manager on your website, you can then add the Google Analytics Tracking code ID to your account. From there, you can create goals and track conversions just like you would with regular use of Google Analytics.
Landing pages are also an easy way to set up a smooth conversion process. Crafting a simple page that does just one thing can improve your conversion rate by making sure that users end up on web pages that get them to the checkout.
How To Use Conversion Tracking Data
Conversion tracking data has many uses. Advertisers use conversion data to see which ads result in high conversion values so they can adjust their campaigns accordingly. Additionally, conversion data can be used to track the ROI of advertising campaigns, and make decisions about where to allocate advertising budgets.
Keep in mind that the value of the conversion depends on how you track your KPIs. If you know the lifetime value (LTV) of a customer is $1,000 and that signing up for a free trial turns into a purchase 30% of the time, you can calculate the expected value of a sign-up conversion at $300.
If your KPI is direct revenue, you now know how much you can spend to get new customers. If your KPI is increasing the effectiveness of moving people from sign-up to customers, you’ll likely act differently from seeing this data.
This should have an impact on your bidding strategies when placing paid ads, troubleshooting a campaign that isn't achieving its conversion goals, and even retargeting customers who visited your site but didn't convert (yet).
Conversion data can also be used to segment audiences for targeted advertising based on personal data. For example, if a specific ad or article drives lots of conversions from a certain demographic, go target them specifically in future campaigns. The reverse is also useful; if a different demographic isn’t converting, stop ad spends on that group.
You can even use the number of conversions you track to estimate the success of offline conversions, like purchases in a physical store or through phone calls to your sales team. This type of conversion event is challenging since you don’t have tracking tags to follow your potential customers around offline. By combining the data you have, you can gain insight into your ads’ offline impact.
A review of sales figures from offline conversions compared to your ad spend during the same time period may show a connection. Do offline conversions go up when you launch a campaign? Are certain campaigns not moving the needle? That’s valuable intelligence to consider when planning future ads campaigns.
Set Up Conversion Tracking Today
Conversion tracking is an essential tool for online businesses. Judging the success of your advertising, calculating ROI, and planning for future campaigns can mean the difference between failure and success in growing a new business.
While tracking conversions can be challenging and time-consuming to set up, the benefits are clear. The know-how you gain for planning your next ad campaign alone would be worth the effort. Yet, when you add in what you learn about consumer behavior and customer needs, it’s clear that conversion tracking has value for decision-makers across your entire business.
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