While running an internal campaign for mobile website development, I stumbled upon an issue that I can imagine many people are having besides me.  The issue is conversion tracking when a user is not filling out the form on the page that you are sending them to. 

In this case, we are driving visitors to our mobile landing page development form and requesting them to fill it out.  After a user clicks on the ad and is driven to the landing page and doesn’t fill out the form, but performs another action on the site, would that constitute a conversion?  Any visitor that comes from a cpc ad and completes any action on a website (not necessarily the one you wanted them to do) and has conversion tracking code implemented, will show up as a conversion from the original cpc source. 

So if you’re targeting a user to complete a sale, and they fill out a form for a newsletter, then your Adwords account will still show a conversion.  Adwords conversion tracking won’t follow a user around your website (unlike retargeting that will place a cookie on the browser), so any action that has conversion tracking will capture that as a conversion.  One way you can verify what conversion is being completed is to set up goals within Google Analytics.  By cross referencing your cpc campaign with your analytics account, you can find out who completed what goal and attribute the goal to the conversion.  If you use both of these tools in-conjunction, you will be able to pinpoint with accuracy where your conversions are coming from. 

Do you know the value of a conversion? It may seem like a basic question, but there are many factors to consider.

For example, ecommerce advertisers may determine the actual value of a conversion as the purchase price of an item. If a person buys a $100 widget from your site, then the value is $100. But in the real world we know there are other expenses incurred including overhead, shipping, etc.

If you are participating in online advertising, a way to calculate a value of a conversion is to look at Return on Ad Spend (ROAS). ROAS is simply dollars sold divided by dollars spent.  It means how many dollars you are getting back for every dollar you spend. Going back to our widget example, if an advertiser spent $20 for advertising on that widget, the ROAS would be 5. 100/20 = 5.  For every dollar you spend, you are getting $5.

Return on Investment (ROI) is another way to calculate a conversion’s value. The formula for ROI is (Revenue – Spend) divided by spend. This is a way to determine what percentage of spend you are getting back as profit. If you spent $20 on advertising a widget that sold for $100, to calculate ROI take ($100-$20)/20 * 100 = 400%.  ROI should be as high above 100% as possible. Also, remember to take the lifetime value of a customer into account when examining the value of a conversion.

Regardless of how you measure your success, the important thing is that you are taking steps to track and improve results. Making sound decisions on what efforts are working and not working will surely help to boost your bottom line.

What are your advertising goals? What is your return on investment? How much are you willing to pay per conversion? All of these questions seem pretty straightforward; however you might be surprised how many advertisers can’t answer them.

Defining your goals should be a priority in any form of advertising: online or offline. While traditional advertising has always had more barriers to tracking performance, online advertising offers ways to evaluate performance that some businesses might not be using.
 
Define what your conversion points are. Do you want your site visitors to sign up for a newsletter, become a member, or make a purchase? Next, decide how much you are willing to pay for that conversion.  You may have many conversion points on your site and each one may be worth more or less than others.

What do you want to track? With the transparency of online advertising, you have the ability to track just about any metric you want. You can track how much revenue was brought in by a particular search engine, such as Google or Yahoo. You can even determine which keywords are generating conversions.

Once your goals are clearly defined, you can then begin to determine how effective your advertising is. Are you making a profit? What is your return on investment?

Investopedia defines ROI as “a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments”. You can easily calculate your ROI by using the following formula.

For example, if you earned $18,000 from your Google paid campaigns and you spent $4,000, your return on investment would be 350%.

If you are able to determine if your goals are being met, you can easily begin to optimize the performance of your efforts. If you are not seeing a return, you can also determine what efforts you should not continue or work to improve.