Digital marketing has evolved tremendously over the last decade. However, one fundamental truth has remained the same. An essential key to online advertising is applying conversion tracking practices to help grow your business. Today, almost every online endeavor uses techniques that are based on conversion tracking.
If you haven’t fully utilized the data gained from your conversions, you may be missing out on valuable information that could grow your brand, teach you essential facts about your target market, and steer you in the right marketing direction. With conversion tracking, it’s easier for your organization to measure sales and determine where your revenue comes from.
What is Conversion Tracking?
Conversion tracking is the process used by digital marketers to track conversions, including filling out a form, visiting a page, signing up for a newsletter, or making a purchase. These conversions can be the direct result of specific campaigns initiated to facilitate those actions. Conversion tracking provides businesses with the ability to determine which marketing activities are working and which ones are not. Using this practice also allows companies to gather valuable data about their customers to build reliable profiles and refine target markets.
Every digital ad campaign initiated, and the tracking data analyzed from Google Analytics provides valuable information. This information helps marketers develop, implement, and refine marketing activities across multiple channels to increase the likelihood of success. By conversion tracking, you’ll know quickly if your choice to start an Instagram campaign was a good idea based on how many people were labeled as “leads” when they viewed the ad and became customers. There’s more to conversion tracking than simply counting the numbers.
The Benefits of Conversion Tracking
Conversion tracking allows businesses to understand the value of their content and brand. You can’t know how your website is doing if you’re not tracking website conversions. Of the many conversion tracking benefits, you can better understand and possibly predict how customers will engage with your content and site. Through conversion tracking, your brand can:
- Gain knowledge regarding how visitors engage with your website
- Measure SEO results and determine which changes need to be made to your site or word selection to bring more leads
- Learn which channels are most effective and ultimately develop strategies designed to engage those audiences
- Drive customer acquisition costs down
- Become more efficient around ad spend by tracking ROI
- Develop and incorporate key performance indicators (KPIs) to keep the organization focused on the most important objectives.
Types of KPIs
KPIs are useful indicators that show how well your business is doing at a particular activity. Say, for example, you’re trying to attract an audience to a video on your website. Established KPIs can help you focus on where your brand needs extra attention and track the results per your specified goals.
Here are suggested KPIs any organization can benefit from:
- LTV (customer lifetime value) refers to the monetary value a customer has to an organization over a specified period of time. This timeframe could be for two years, the lifespan of the engagement, or whatever period the organization chooses to include.
- A Churn Rate is the annual percentage rate that customers cease doing business with your company.
- CPA, or cost-per-action, measures the fee associated with engaging in a particular action concerning digital advertising.
- Lead-to-Close rate is the percentage of leads that become conversions. To determine the lead-to-close rate, divide the number of successful sales by the number of leads, and multiply the result by 100.
- Return on Ad Spend is how much revenue your company makes as a result of every dollar you’ve spent on advertising. For example, if your company makes $4 for every dollar spent on advertising, the ROAS would be benchmarked at 4:1.
Setting Up a Conversion Tag Strategy
By adding a conversion tracking tag or code to your website, you can accurately track a particular action’s conversions, depending on where the tag is placed. You can set up a conversion tracking tag on your website using Google Ads or a tracking code manager plugin.
How to Manually Install Conversion Tags
You can find the ‘tools’ icon in the upper right-hand corner of your Google Ads account and start a conversion tag from there. Once you’ve clicked your website, you can choose which action you’d like to track, such as sales or leads. You can find an outline of these steps on the Google Support website.
By using conversion tags, you can better understand the origination and behavior of website traffic. From there, you can then optimize your website to deliver performance based on the analysis derived from your conversion tags. It’s great until you want to track multiple conversions using Google Ads and have to go through the lengthy process of creating a unique code for each one.
Conversion tags will help you understand your visitors’ behavior and estimate the likelihood that those visitors will ultimately buy from you.