Conversion rate (CVR), or conversion ratio, is a marketing metric that measures the percentage of users who complete conversions by engaging with a call-to-action (CTA).
Detailed explanation
CVR tells brands how effectively their ads convert potential customers into buyers. Conversions occur when a user completes a task, buys a product, signs up for a service or takes any action the selling company considers a conversion.
In CVR marketing, advertisers use digital marketing techniques to influence behaviors encouraging potential customers toward specific actions. These generally come in the form of a CTA, a prompt the marketer wants users to take to fulfill the conversion funnel’s next steps.
CVR marketing is essential as higher conversion rates increase the number of customers and boost revenue. They also show marketers if their efforts generate desired results.
To calculate CVR, divide the number of conversions by the number of impressions and multiply the result by 100. For example, if an ad receives 1,000 impressions and 80 conversions, the CVR will be:
Conversion rate = 80/1,000 x 100 = 8%
So the company converted 8% of users who viewed the ad.