How much is a good conversion rate and how to achieve it?

Achieving good conversions in online campaigns, such as Meta Ads or Google Ads, is one of the key challenges for marketers around the world. In a quick nutshell, a conversion rate is, of course, nothing more than the ratio of the number of people who made a specific conversion (e.g., purchase, newsletter signup) to the number of total users who clicked on an ad. In this article, we’ll walk you through what a good conversion rate is and what strategies you can use to get one.

What is conversion and conversion-factor?

Let’s start at the beginning, though, because understanding what conversion and conversion rate is crucial to effective planning and optimization of online campaigns. These concepts are the basis for analyzing the effectiveness of marketing efforts and allow us to measure the effectiveness of digital advertising investments.

Conversion in the context of online marketing refers to the moment when a user takes a specific desired action after encountering an ad or website. This action can take a variety of forms, depending on the goals of the campaign and the nature of the business, for example:

The action can take different forms, depending on the goals of the campaign and the nature of the business.

• making a purchase of a product or service,
• subscribing to a newsletter,
• downloading a file, such as an e-book or app,
• filling out a contact form,
• registering for an event or webinar,

Each of these actions translates into the achievement of a specific business goal, which is what makes conversion a key performance indicator of marketing efforts.

Conversion rate is a percentage measure that shows the ratio of the number of conversions to the total number of visits or interactions with an ad, landing page, or other campaign element. It is calculated according to the formula:

For example, if your landing page has been visited 1000 times and generates 50 conversions, the conversion rate is 5%.

Why conversion rate is important?

Conversion rate is a fundamental indicator that helps us understand how effectively our advertising efforts translate into achieving our business goals. Analysis of this indicator enables:

• assess the effectiveness of advertising campaigns and landing pages,
• identification of campaign elements that need to be optimized,
• comparing the effectiveness of different advertising channels and marketing strategies,
• effective management of the advertising budget by allocating funds to the most profitable activities,
• improve the overall ROI (return on investment) from marketing activities.

How much is a good conversion rate?

Fromthe latest research shows that in 2023 the average global website conversion rate was 3.68%. In contrast, the average conversion rate in the e-commerce market fell by 0.91% from 1.65% to 1.64% in February 2023 compared to February 2022.

The first thing you should understand is that conversion rate is a fairly conventional value. A store selling high-quality wooden furniture will not have the same conversion rate as a store selling T-shirts for £30. Similarly, a store with an email list of 100,000 loyal customers will get much better conversions than a store targeting cold traffic on Facebook.

We can include the variables that affect the conversion rate:

• product type,
• product cost or average order value,
• source of traffic,
• device (phone, tablet, computer),
• software (Windows, Mac, iOS, Android, etc.),
• location,

Furthermore, the term “conversion rate” is generally used to denote the percentage of visitors who become customers. However, you may have different goals that you are trying to optimize (e.g., the percentage of visitors who add a product to a shopping cart, download an e-book or fill out a contact form, etc.). The term “average conversion rate” can therefore be somewhat misleading.

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Benchmarks of conversion rate in different industries

Understanding what constitutes “a good” conversion rate is the first step to optimizing online advertising campaigns. Average values can vary by industry, product type, or advertising platform, but there are some universal benchmarks:

• E-commerce: The average conversion rate for e-commerce on Google Ads is around 2-3%, while for Meta Ads it can be slightly higher, settling at 3-4%. These values may vary depending on product categories and market competitiveness.
• B2B (Business to Business): In the B2B sector, where decision-making processes are longer and often more complicated, a good conversion rate can be around 2-5% for Google Ads. For campaigns on LinkedIn (although not Meta Ads or Google Ads, but often used in B2B), conversion rates can be even higher, due to more specialized targeting.
• Professional services (e.g., legal, accounting): For this industry, the conversion rate in Google Ads can be around 5-10%, reflecting more targeted queries by potential customers. Meta Ads may have a lower rate, due to less intentional user behavior on social media platforms.
• Tourism and hospitality: In this industry, conversion rates may be lower, around 2% for Google Ads, due to the high competitiveness and comparison of offers by users. Meta Ads can achieve similar results, depending on the effectiveness of user engagement campaigns.
• Software (SaaS):For SaaS companies, the conversion rate for Google Ads is often in the 3-5% range, while Meta Ads may offer lower rates, as the decision to purchase software often requires more time and consideration.

It is important to remember that these numbers are only approximate and can vary depending on a number of factors, including the quality of the campaign, the degree of optimization of the landing page, the competitiveness of the keywords and the goal of the campaign. It’s important for each company to analyze its own data and compare it to its industry benchmarks, and constantly work on optimizing its campaigns to increase conversion rates.

Remember that even a small improvement in conversion rate can make a big difference to campaign profitability and overall business performance. That’s why it’s crucial to continually test, optimize and adjust your marketing strategies to maximize the effectiveness of your advertising efforts.

Take note.

How to reach and exceed these benchmarks?

Conversion rate improvement is an ongoing process that requires data analysis, testing and optimization. This includes activities such as:

1. Understanding and segmenting traffic sourcesAnalyzing traffic sources:Understanding where your site visitors come from (e.g., search engine, social media, newsletter) allows you to tailor your communications and offerings to their specific needs and behaviors.
   Segmenting traffic: Tailor your communications and offerings for different traffic segments. For example, people from your newsletter may be more familiar with your brand than users who came to your site through social media advertising.
2. Optimizing landing pages
   A/B testing: Regularly conduct A/B tests on target pages to see which elements (e.g., headlines, images, CTAs) yield better conversion results.
   Personalization: Tailoring landing page content to the needs and interests of specific visitor segments can significantly increase conversions.
   Load speed: Optimizing page load times is key, especially for mobile users. Slow pages often lead to high rejection rates.
3. Precise targeting in ads
   Using demographics and interests:Targeting ads to specific demographic groups, interests and behaviors can significantly improve campaign relevance and effectiveness.
   Retargeting: Retargeting campaigns retargeting allow you to re-engage people who have already visited your site but did not convert, increasing the chance of a conversion.
4. Personalize and test ads
   Personalize content: Tailor messages in your ads, including headlines, descriptions and CTAs, to directly address the interests and needs of your target audience.
   A/B testing: Regularly conduct A/B testing of different ad elements to identify which versions yield the best results. Test one variable at a time to clearly understand what affects improved conversions
5. Strong calls to action (CTAs)
   Brightness and visibility: CTAs should be easy to see and understand. Use contrasting colors and unambiguous messages that encourage action.
   Test different calls-to-action:Experiment with different CTA formulas to find the ones that generate the most conversions.
6. Use customer feedback and reviewsTrust and credibility: Reviews and testimonials from satisfied customers can significantly increase trust in your brand and products, resulting in higher conversion rates.
   Integrate Reviews: Place customer reviews on landing pages, in ads and on product pages so potential customers can easily find them.
7. Data-driven analysis and optimizationMonitoring and analysis: Regularly track key conversion metrics and analyze data to identify areas for optimization.
   Adjust strategies: Based on the data collected, adjust your campaigns, landing pages and communication strategies to continuously improve conversion rates.

To achieve a high conversion rate, you need to continuously monitor, test and adjust your marketing strategy. Effective conversion optimization is a process that never ends, but consistent application of the above practices can significantly improve the results of your advertising campaigns.

Summary

A good conversion rate is relative and depends on many factors, including industry, product, and business goals. Achieving and maintaining a high conversion rate requires understanding your target audience’s needs and preferences, as well as continually optimizing your ad campaigns and landing pages. Remember that success in online marketing does not come immediately, but is the result of thoughtful strategies and determination to implement them.