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, 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
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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