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Revenue Per Conversion

Revenue Per Conversion

Contents:

 

*A conversion is when a user performs a desired action (being tracked) on your website. This could be buying a product, downloading a file, clicking a link or any other desired action. Typically conversions are linked either directly or indirectly to revenue.

Revenue Per Conversion

Quick Description = Average Revenue of a Conversion

Calculation: Revenue / Conversions | (Total Conv. Value / Conversions)

Referred to as = Value / Conv

This is a simple calculated (or derived) metric based on the total revenue and total conversions; simply dividing revenue by conversions allows us to see what the average revenue per conversion is.

This metric is very useful for understanding where the highest revenue is being acquired from the pool of conversions. When segmenting conversion data by product, campaign, keyword, etc this can provide some valuable insights and allow you to isolate and optimise for conversions / conversion rates in these areas.

Conversely, you can use this metric to identity the poor performing components or areas of an account and subsequently make recommendations to improve the revenue per conversion.

Conversion Value Vs. Revenue Per Conversion

The conversion value, which we discuss in more depth in anther guide on conversion values, is a specified value of any given conversion. This value will be the same as the revenue per conversion if you only have a single conversion in the account. However if you have multiple conversions each with unique values, the Revenue Per Conversion will be very different.

For example, in the table below we show a range of conversions each with different values…

Revenue

If we take the totals and divide Total Revenue by Number of Conversions, we get a Revenue Per Conversion of $21.97.

This metric will provide some top-level insight into an account but is not commonly used due to its composite nature aggregating data across multiple conversions.

Cost Per Conversion Vs. Revenue Per Conversion

Cost Per Conversion otherwise and often referred to as Cost Per Acquisition (CPA) is often used as a target metric to be achieved by the account manager. This target is often derived from the Revenue Per Conversion; if you have revenue of $10 per conversion it would be logical (if you are trying to make a profit) to have a target CPA less than $10.

More Information

If you liked this guide on Revenue Per Conversion, you may also be interested in the following guides related to this subject:

  • ROAS (Return on Ad Spend)
  • ROI (Return on Investment)
  • Converted Clicks
  • All Conversions
  • Converted Click Rate
  • Conversion Tracking
  • Conversion Rate
  • Cross Device Conversions
  • Cost Per Converted Click
  • Avg. CPC (Cost Per Click)
  • Revenue Per Conversion
  • Conversion Optimiser

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