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Cost Per Conversion
George Jameson avatar
Written by George Jameson
Updated over a year ago

What Is Cost Per Conversion?

Cost Per Conversion is a digital marketing metric that calculates how much money you spend on advertising or marketing to acquire one customer or achieve a specific goal, such as making a sale or generating a lead.

Example of Cost Per Conversion:

Let’s say you run an online advertising campaign on social media and spend £500 on ads. During that campaign, you acquire 20 new customers. Your Cost Per Conversion is £25 because £500 spent divided by 20 conversions equals £25.

Why Tracking Cost Per Conversion Is Important:

Tracking Cost Per Conversion is important for several reasons:

  • Cost Efficiency: It helps you understand how efficiently you’re spending your marketing budget to achieve your goals. Lowering the cost per conversion can lead to higher profitability.

  • Campaign Optimisation: By monitoring this metric, you can make data-driven decisions to improve campaign efficiency, adjust ad spend, or target more effectively.

  • ROI Assessment: It’s a crucial factor in assessing the return on investment (ROI) for your marketing efforts.

Using Cost Per Conversion for Data-Driven Decisions:

For brands looking to stay competitive and adapt to market trends, here’s how to use Cost Per Conversion effectively:

  • Ad Budget Allocation: Allocate your advertising budget to campaigns or channels that have a lower Cost Per Conversion, as they are more cost-effective.

  • Ad Optimisation: Continuously optimise your ads to improve their relevance and click-through rates, which can lead to lower costs per conversion.

  • Audience Targeting: Analyse which audience segments have a lower cost per conversion and adjust your targeting to focus more on those segments.

  • Keyword Analysis: For pay-per-click advertising, review the performance of keywords to identify which ones lead to lower costs per conversion and adjust your bidding strategies.

  • Conversion Rate Optimisation: Work on improving your website or landing page’s conversion rate to achieve more conversions with the same ad spend.

  • Competitor Benchmarking: Compare your Cost Per Conversion to industry benchmarks and competitors to understand your competitiveness.


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