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PPC Conversion Rates: What Are They and Why do They Matter?


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There’s a ton of metrics to keep up with in your advertising campaigns; you have to worry about things like return on ad spend (ROAS), what percentage of the impression share you’re getting for the keywords you’re targeting, what your PPC conversion rates, and what your click-through rates are.

Conversion rates are one of the most common metrics that PPC campaign runners focus on, and for good reason.

Even though it’s definitely not the only metric you need to know, it’s a strong indicator of the ad’s performance.

So what exactly is a conversion rate and how is it calculated?

What qualifies as a “good” conversion rate, what other metrics should you be looking at, and how can you optimize for better rates?

We’re going to answer all of these questions in this post and more!

What Is a Conversion Rate?

Your conversion rate is exactly what it sounds like: it tells you how many people are converting on your ads.

In most cases, this is calculated by dividing the number of conversions you get by the number of people who visit your site or landing page.

When it comes to PPC campaign, the conversion rate is typically calculated by the number of conversions you get divided by the number of users who click on the ad (and thus visit your site or landing page).

Conversions, in this context, are when users take the specific actions that you’re optimizing for. This can mean sales, but purchases aren’t the only type of conversions that advertisers are prioritizing.

Other options include (but are not limited to):

  • submitting lead generation forms
  • subscribing to a blog or video channel
  • registering for an event, signing up for a free trial
  • calling your business (this is particularly common for Google Ads which optimize for this action)
  • sending a message to learn more about a company

What Can PPC Conversion Rates Tell Me (Aside From the Obvious)?

Your conversion rate can tell you how successful an overall ad campaign is at driving action. This, in turn, can tell you plenty about how effective your ads are when paired with your landing page or product of choice.

If your ads have high click-through rates but low conversion rates, there’s a good chance that the problem isn’t with your ad itself, but a disconnect between the ad and the landing page.

If you notice that your campaigns are experiencing this obstacle, you should look for the following problems:

  • A landing page that doesn’t perfectly align with the ad you’ve created.

Are you running a Facebook Ad showcasing a specific product but then sending users to your site’s home or about us page? That can cause a big drop off in potential sales.

  • Offers that aren’t immediately visible on the landing page.

If your ad promises 20% off but the landing page doesn’t reflect that, users might feel like they’ve been tricked and click away.

  • A weak landing page.

If your landing page isn’t well designed, doesn’t have clear CTA buttons (if applicable), or is too complicated for users to navigate, they’ll lose interest quickly. You should make sure that visitors have all the information they need to move to the next step, whether that’s signing up for an event registration or purchasing a product.

  • A slow-loading landing page. 

A one-second delay in page loading times can actually decrease conversion rates by 7%, along with increasing bounce rates rapidly.

What Counts as “Good” PPC Conversion Rates?

When working on ad campaigns, I typically work with small businesses who have never run their own ad campaigns before, and they often ask me what’s a “good” conversion rate that they could hope to expect.

The real answer is that it varies, but that a strong conversion rate likely won’t be as high as you’re hoping for, and that’s completely normal.

If you had to guess, what do you think it would be? How many people who click on your ad and view your landing page will actually convert? 75%? 50%?

Most businesses are shocked to find out that, according to Steelhouse (and a lot of other similar studies), most conversion rates range from around 1-3%.

This can be a little higher for PPC campaigns, with Facebook Ads clocking it at around 9.21%, and the average Google search ads conversion rate is 3.48% while the display network is only at .72%.

Retargeting campaigns— or those where you’re targeting specific users based on their relationship and interaction with your brand–  typically have higher conversion rates, while those appealing to cold audiences or users lower in the sales funnel will naturally have lower conversion rates.

Are My PPC Conversion Rates Accurate?

Google Ads tells you that your conversion rate is at a perfect 3%– but they may not always be 100% accurate, and it has nothing to do with tracking. The same goes for Facebook Ads.

That’s because consumer shopping behavior is messy and a little complicated.

Consider your path to purchasing.

Let’s say you need to find a contractor to give you a new roof. Are you likely to search for “roofers,” click on the first search result, and purchase immediately?

No!

You’re going to most likely look for several options, check out their sites, look for pictures, and review customer testimonials along with things like permits or business licenses.

It may take you several weeks of research, and only once you see an offer on Facebook will you decide to purchase.

In this case, even though it was the ad that put that company on your radar, it may not get the conversion, because it was technically the Facebook post that sent you to the site.

Attribution models and windows have a lot to do with how your conversion rates are reported.

Attribution models determine what touchpoints are given credit for a conversion, and the default is the “last click” model, which we’ve looked at above.

Opting for linear or time decay attribution models on Google Ads will give you a bigger picture and, in many cases, a more accurate conversion rate.

To do this on Google Ads, click “Tools” and then find “Search Attribution.”

Then choose the attribution model you want to go with.

Linear, Position-Based, and Time Decay models all take multiple touchpoints into the equation.

You can learn more about which is right for you here.

It can also be helpful to extend your attribution window on Google Ads and Facebook Ads, counting conversions that happen two weeks later instead of just a few days.

On Facebook Ads, you have the option to change the “view” and “click” windows, personalizing each.

4 Tips for PPC Conversion Rates Optimization

Wondering how you can optimize your conversion rates?

Here are a few tried-and-true tricks that are sure to help you optimize for conversions and drive results on any of your PPC campaigns:

  • Provide relevant information in your ads.

The more information that users have, the more likely they are to determine if what you’re offering aligns with what they’re looking for, and there’s no reason to drag down a conversion rate or pay for irrelevant clicks. On Facebook, consider using videos or bullet lists in the ad copy to serve this purpose. On Google, consider adding ad extensions.

  • Check your site loading speed. 

We mentioned above that slow speeds can sink conversion rates, and that’s true for all PPC platforms. Use tools like Google’s Lighthouse audit tool to check out your site’s loading speeds and look for anything that could be slowing it down.

  • Create relevant, targeted ads.

The more niched-down your ad campaigns are, the more they’ll resonate with your exact target audience, which increases the success of your ad campaign. Dive deep into your audience segments, and don’t be afraid to use retargeting to re-engage customers and boost overall conversion rates.

  • Don’t neglect other metrics. 

A strong conversion rate is outstanding, but it’s not the only metric you need to be watching. This tip isn’t so much about optimizing your ad campaign for conversions, but success overall. Remember that you should also be carefully watching metrics like your cost per conversion or cost per click; if those costs are too high, your campaigns are still in a world of hurt even if they’re getting conversions. Keep an eye on your campaigns to make sure what you’re spending on clicks lines up well with the profit you’re making from the actual conversions.

Conclusion

Maintaining strong conversion rates will often yield incredibly profitability and indicate campaign success, as long as the other metrics are in line and your costs are where you want them.

Taping conversion rates can also be useful, however, helping you to troubleshoot issues in your funnel and determine what can be improved to get results from those PPC campaigns that you’re slaving over.

Remember that conversion rates do fluctuate based on factors like location and industry, and that the larger the purchase value or the ask you’re making of customers, the longer the funnel and lower the initial PPC conversion rate will be.

Retargeting can help boost overall conversion rates, making up for the different and increasing your overall ROAS, so make sure it’s featured within your PPC mix.

What do you think?  What do you consider to be a strong conversion rate for your business? What attribution models and windows are you using, and how do they impact your data? Share your thoughts and questions in the comments below! 

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