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.