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Paid Ads

Conversion

A conversion is an action you care about (purchase, signup, lead, subscription) that you measure and optimize toward.

Updated 2026-01-23

Definition

A conversion is an action you care about (purchase, signup, lead, subscription) that you measure and optimize toward.

Example

If a user completes a checkout after clicking an ad, that purchase is a conversion.

How to use it

  • Define conversions with clear eligibility (new vs returning users) and a time window.
  • Audit conversion tracking after site releases and checkout changes.
  • Keep platform and analytics conversion definitions consistent where possible.
  • Separate primary conversions from secondary micro-conversions.

Common mistakes

  • Changing conversion definitions mid-stream and breaking trend comparisons.
  • Counting duplicate events (inflates performance and misleads bidding).
  • Optimizing for low-value conversions that do not drive revenue.

Why this matters

This term matters because it affects how you interpret performance and make budget decisions. If you use inconsistent definitions or windows, ROAS/CPA can look "better" while profit gets worse.

Practical checklist

  • Write a 1-line definition for "Conversion" that your team will use consistently.
  • Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
  • Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
  • Sanity-check with a related calculator from the same category on MetricKit.
  • Read the related guide (e.g., UTM + GA4 attribution: practical tracking for paid ads (without lying to yourself)) for context and common pitfalls.

Where to use this on MetricKit

Calculators

  • Marginal ROAS Calculator: Estimate diminishing returns and find the profit-maximizing ad spend from a simple response curve.
  • Target CPA from LTV Calculator: Translate LTV and contribution margin into a target CPA (and break-even CPA) for paid acquisition.
  • MER Calculator: Calculate MER (Marketing Efficiency Ratio / blended ROAS) and estimate break-even and target MER from margin assumptions.
  • Max CPC Calculator: Compute break-even and target CPC (and optional CPM) from CVR, AOV, and contribution margin assumptions.
  • Break-even CPM Calculator: Compute break-even and target CPM from CTR, CVR, AOV, and contribution margin assumptions.

Guides