Why is it important to set conversion values? Without it, you won’t know 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.