How To Set Conversion Values In Digital Ad Campaigns
Why is it important to set conversion values?
Without understanding conversion value, you will not be able to track two of the most important metrics in digital ad campaigns: return on ad spend and advertising margin.
Paid search campaigns are generally used for two purposes:
- Sales, as in eCommerce stores
- Lead generation, as in service businesses
Both benefit from setting up conversion values within the campaign. However, the method for doing 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.
