Conversions - every marketer wants them, but not every marketer gets them 🤷♂️. As a marketer, you’re probably all too familiar with the need to measure the impact of your marketing efforts as the holy grail for success.
Yet, one of the biggest challenges businesses face today is measuring their ROI. HubSpot ran a survey to marketers, and over 40% said proving ROI was their top priority.
Tracking conversions lets you directly see results from your marketing campaigns, so you can make smarter investments across your channels and get the most from your ad dollars 💰.
In our Part 1 on UTMs, we covered the first of 3 keys 🔑 for marketing success by tagging your links with UTM parameters. The next part is conversion tracking, which I’ll dive into below (plus some new conversion tracking tools we’re building to help you measure results from any channel!), and tying it altogether with some icing on top is Part 3 on Marketing Attribution.
Let’s say you owned an ecommerce site that sold bacon-scented items 🥓.
Conversions are actions that get completed by a visitor, such as signing up to your newsletter or buying a bacon-scented mustache.
In terms of conversion tracking pixels (aka tags), many of you may already have these on your site, such as the Facebook Pixel or Google Ads conversion tracking tag. These are small snippets of code you add to your site to track actions visitors take from your ads.
The largest ads platforms (Facebook, Google) use both pixels and cookies, so I’ll briefly cover what they are to help you better understand what you can implement, or may already have, on your site.
Cookies and pixels are sometimes used interchangeably, but actually mean different things.
Everything starts with a pixel, which can also contain a cookie. Pixels are pieces of code placed on a site to send info about its visitors to a server. Cookies are pieces of code that store info about its visitors in browsers (e.g. Chrome, Safari) so it can be used by a server again later. And pixels and cookies are often used together to improve your product and marketing experiences.
🍪 Cookie tracking: A cookie is a small text file that any website can store in their browser. Each file has a unique and anonymous Cookie ID per website visitor, used to remember all their interactions with the site. For advertising, these browser interactions get sent to an ad platform’s server, and can be used to optimize ads. For example:
Cookies can also use info they know about you to personalize your website experience, such as storing login credentials or items you added to a cart.
Since cookies track browsers and not people, there’s limitations as it’s not possible to track activity on mobile apps, hard to track activity between devices, and at any point, someone can delete their cookie history from their browser settings. So, this is why using multiple methods (hello pixels!) helps you accurately track and optimize your ads.
💻 Pixel tracking: A pixel is a small piece of HTML code that gets added to your website. In ads, when an action takes place (e.g. sign up), the pixel fires and relays info about that visitor to your ad platform’s server. The pixel also gets added to your ads. So if someone saw a Facebook Ad from you about bacon floss, then later visits your site to buy it, the pixel will fire and link the conversion to that ad.
This lets you measure the effectiveness of your marketing campaigns, which is exactly what you care about! 🔥
To give you some ideas, for Facebook Ads, here’s a list of standard events you can track with a simple toggle from their Event Manager dashboard (you can also create custom events - more in their Help article here):
Similarly, you can setup conversion actions in your Google Ads account, assign values to each conversion, add conversion windows (e.g. how long to count conversions after someone clicks on your ad, between 1-90 days), and more.
Putting this all together, advertising pixels and cookies are often used together to improve your marketing measurement and optimization. Here’s an example for Google Ads:
Using PixelMe’s UTM builder to tag your links lets you see where your traffic comes from (campaign, channel etc.).
It’s commonly assumed that UTM tracking is for Google Ads only, or that you should do either UTM tracking OR conversion tracking. So which is it? 🤔
Using either UTM tracking or conversion tracking alone only gives you one part of your marketing performance story. But used together, they connect all the dots of how people discover and engage with your business, and convert across all your marketing efforts.
And when it comes down to measuring which channels are most successful, conversion tracking will give you data you need to pull together some key marketing health metrics:
Because at the end of the day, you’ll want to know how much revenue you gained compared to how much you spent on all your marketing efforts 💪.
Now, the most important step once you have conversion tracking set up, is to compare your results and ROI across all channels and campaigns in one place.
To measure success from the start, you’ll also want to define your marketing goals and metrics you use to track progress along your marketing activities.
The basic formula to calculate ROI is:
Here are some metrics to use for calculating ROI from your advertising efforts:
Note: to more accurately calculate ROI, many businesses include all their ads costs (creative outsourcing, tools & software used to generate content etc.). So for example, you could use this new formula (or other variations):
ROI = (Returns - Marketing Investment - Incremental expenses) / Marketing Investment
Using the basic ROI formula, let’s say you ran Facebook Ads for 2 weeks, got $1000 of sales from customer purchases, and spent $400 on those ads.
( ($1000 - $400) / $400) = 150%
The ROI would be 150%, so for every $1 you spend, you would get $2.50 in return.
As a rule of thumb, you should always have higher Revenue than CAC. More simply put, ensure dollars coming in are greater than dollars going out!
If you’re like most marketers, you’re likely running paid acquisition campaigns in many channels (Facebook, Google, LinkedIn, Twitter). And you may also be manually (and painfully!) tracking results from each channel individually, then combining them to see how well you’re hitting your KPIs.
Adding to that, most people interact with a business on multiple channels before they convert into a paying customer.
So to calculate your true ROI, you’ll need your marketing costs and revenue metrics from every acquisition channel in the same place. Having these metrics in one place will help you answer important marketing questions like:
Once you have conversion tacking setup, you’ll be ready to understand which channels and paths are most cost effective.
And this is where attribution comes into the story. Attribution is the method you use to assign different weights and credits to each touch point along a visitor’s journey.
For example, do you assign the same value for each touch point if someone first came to your site from a Google Search Ad, then visited your blog, then got retargeted with a Facebook Ad and converted? Or do you only assign a value to the Facebook Ad since it was the last touch point that resulted in the conversion? We'll cover much more on how to measure attribution in Part 3!
To close off, here's a refresher (if you still need one 😅) on how conversion pixels can help you and tools for success.
And if you're setting up ad pixels for the first time (which we heard can sometimes be a pain 😬), you can use free Chrome extension tools such as the Facebook Pixel Helper or Google Tag Assistant to verify they’re working along with debugging guidance.
So there you have it on conversion tracking. Hopefully you're now on your way to adding conversion pixels to your site if you haven't already!
Want to measure your ROI with Conversion Tracking? Sign up for a free 7-day PixelMe trial. If you have any questions, just message us from the chat icon 💬 in the bottom right-hand corner or email us at email@example.com 💌