What is a conversion? A conversion funnel? And a transaction? And why you need to know!

What is the "conversion" on YOUR blog? Have you ever heard of a "conversion funnel"? Do you know what a "transaction" is? Well, if not, this post will answer all you need to know!

"Convert your visitors into prospects, then customers!”


Obviously, there is no reason for companies to spend money buying online advertising, unless they make money when people click on those ads. Therefore, it is important that all affiliate websites have a valuable and well designed "conversion funnel".

It doesn't matter if your "conversion" is a purchase or a sign-up, but your website or blog must have at least ONE "conversion". A conversion can be measured, and being able to measure the success of your blog is important. You could even argue that by having people simply sign up to your RSS is a form of "conversion" (although there is no financial gain).

Cost per action (CPA) is a relatively new measurement for online advert effectiveness. The CPA method records conversions and transactions.

What is a conversion?

A conversion takes place when an ad click leads directly to some valuable user action such as a purchase, sign-up, registration, lead, or view of a key page.

Conversion rate measures the effectiveness of unique clicks. The formula is:

Conversion Rate = Conversions ÷ Unique Clicks

What is a Transaction?

A transaction is recorded on every invocation to the conversion tracking code. Essentially, a visitor can make multiple transactions but only a single conversion.

For example...

A visitor clicks on ad A on May 1st, purchases $10 worth of goods on May 10th, and makes another transaction on May 11th for $20. Conversion stats will report one conversion and two transactions for May 1st for a total value of $30.

So take some time to setup a basic conversion on your blog, and start recording how well you are able to convert people. Change the content and layout of your blog, and see if you can increase the number of conversions. Take a look at the diagram above, and perhaps make your own diagram to remind you of the conversion levels of your website.

Good luck, and keep blogging.