How is conversion rate best described?

• A. The total conversions divided by total impressions
• B. The ratio of clicks to impressions
• C. The average number of conversions per ad interaction
• D. The cost per conversion

Answer: (C)

Conversion rate measures how often an interaction with your ad leads to a conversion. It is the average number of conversions per ad interaction, typically calculated by dividing conversions by ad interactions (usually clicks). For example, if you have 3 conversions from 20 ad clicks, the conversion rate is 3 divided by 20, or 15%. This focuses on how effective engaged users are at completing the desired action.

Other metrics describe different ideas: conversions per impression would use total impressions as the denominator, which isn’t as indicative of intent since many impressions don’t involve any engagement; the ratio of clicks to impressions is the click-through rate, not the conversion rate; and cost per conversion measures how much money is spent per conversion, which is about efficiency, not the frequency of conversions per interaction.