How To Set Conversion Value In Digital Ad Campaigns

Why is it important to set conversion values? Without understanding the conversion value, you won’t be able to track the two most important metrics in digital ad campaigns.

Paid search campaigns are used for two purposes: (1) sales, as in eCommerce stores, and (2) lead generation, as in service businesses. Both benefit from setting up conversion values right within a campaign.  However the method to do so is different.

When determining lead value, some of the things to take into consideration include:

  • Close rate of turning leads from paid search into transactions.
  • “Planning window” to use for estimating conversion value (typically 6 to 18 months).
  • Gross margin of the product or service.
  • Aggregate repeat or follow-through purchase behavior.

Steve describes a simple framework for how to estimate conversion values in this short video.

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