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What is a conversion? What is a transaction?

Cost per action (CPA) is a relatively new measurement for ad effectiveness. This method counts conversions and transactions.

Conversion

A conversion occurs when an ad click leads directly to some valuable user action such as a purchase, signup, registration, lead, or view of a key page. Conversion rate measures the effectiveness of unique clicks. The formula is Conversion Rate = Conversions ÷ Unique Clicks

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.

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.

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