Google Ads Conversion Rate: Concept, Formula & Average Rate

Advertising on Google ads can potentially bring in higher leads, more conversions, increased brand awareness, and much more. But to truly measure the success of your ad campaigns, conversion rate is the metric you must look to. 

The conversion rate in Google ads is a metric that accurately measures and defines how well the efforts that you’ve put into advertising bear fruit. 

For advertisers across varied industries, different conversion goals bring in different results and are measured accordingly. We have compiled the average conversion rates of different industries to help you determine how well your campaigns are performing.
This blog focuses on defining what is conversion rate in Google ads, how conversion rates are calculated, the different factors that impact conversion rates, and how you can optimize conversion rates for your business. 

Let’s begin.

Google Ads Conversion Rate Definition

A ‘conversion’ on Google ads is the desired action a user takes on your website after interacting with your ad.

Conversion rate can help you calculate the percentage of visitors on your website who are taking the desired action. It can also help marketers evaluate the performance and effectiveness of campaigns, conversions, and website visitors.  

Google Ads Conversion Rate Formula

A conversion rate is a percentage derived by dividing the total number of conversions by the number of users that engaged with your ads.

Let’s take an example–a business has received 1000 conversions and 20,000 visitors over a period of one month. The conversion rate is: 

1000/20,000 × 100 = 5%

Google ads conversion rate is the number of conversions based on your Google ads but in the form of a percentage. Now, to calculate the conversion rate for Google ads during a particular time period, you must add your values to the given formula. 

Why are conversion rates important?

• Conversion rates can help you determine exactly how successful your Google Ad campaigns are. Your conversion rate on Google is the exact measure of how well your audiences are completing the desired goal after interacting with your ad. 
• They’re incredibly important because they help you determine the areas where your campaigns need improvement, where you can invest more, and where you can bring in higher revenue.
• Conversion rates also help you calculate the ROAS for Google Ads.  

Suppose you’re investing $100 to drive 10,000 visitors to your website, you can essentially take steps to double the conversion rate and lower the ad spend to $50 and drive the same number of visitors to your website. 

This also means that if you continue to spend $100, you have doubled the value of your ad spend by bringing in 20,000 visitors and optimizing the conversion rate. 

Based on every advertiser’s unique requirements, conversion rates can differ vastly. 

Generally, conversion rates for ecommerce websites can be derived from the number of people who make a purchase from their store. 

For advertisers looking for organic growth, the conversion rate can be measured by comparing the clicks received on their links and landing pages to the search traffic. 

Social media conversion rates can be measured effectively using specific links, which measure clicks on the link as compared to the conversion made. 

What is a Good Google Ads Conversion Rate? 

Truly defining what a good conversion rate is quite difficult since it depends on multiple factors. Your conversion rate will constantly change based on the time of the year (festivities might bring in more conversions), what your conversion goal is, specific industry, events surrounding your industry/niche, your target audience’s demographics, etc. 

The goal for most marketers is to achieve high conversion rates with lower cost per conversion. But how exactly do you categorize as a ‘high’ conversion rate? 

To answer this question, we’ve compiled data on average conversion rates for different industries to help you figure out the benchmarks that you should be aiming for. 

Average Google Ads Conversion Rates by Industry

By understanding these benchmarks, businesses can better gauge their campaign performance and make necessary adjustments to improve their conversion rates.

The average conversion rate on Google Ads for search network is 4.40% and on display network is 0.57%

Industry	Average Conversion Rate in % (search ads)	Average Conversion Rate in % (Display ads)
Apparel	2.77	0.58
Arts and Entertainment	4.51	0.75
Business & Industrial	3.71	0.29
Computers & Electronics	3.16	0.50
Dining & Nightlife	4.74	0.56
Finance	4.17	0.80%
Health	4.63	0.75%
Hobbies & Leisure	3.39	1.12
Home & Garden	4.26	0.35
Jobs & Education	4.15	0.38
Law & Government	7.45	0.46
Real Estate	3.40	0.36
Retailers & General Stores	4.23	0.53
Sports & Fitness	3.83	0.80
Travel & Tourism	3.95	0.39
Vehicles	7.98	0.51

You might want to keep in mind that as your online presence grows, your conversion goals are bound to change. These changes can reflect in your conversion rate over time. 

What are the Factors that Impact Conversion Rates for Google Ads?

Several factors can impact conversion rates for Google ads. These include: 

• Value proposition: The ‘CTA’ in your ad that guides a user towards a desired action. This can the first interaction that a customer has with your brand–make it clear, concise and definitive.
• Quality content: The quality of your ad content, including the images, banners, keywords, and user guides, can all be incredibly helpful in increasing the discoverability of your products and the conversion rate. 
• Types of conversions: Depending on what the ultimate goal is, people can react differently to your ad which can impact your conversion rate too. If your conversion goal is to get people to sign up to your newsletter, you might have a higher conversation rate than someone who sells luxury products. 
• Website Speed: The loading speed of your website. Users’ attention spans have decreased significantly, so a website that takes time to load and switch between pages can cause users to lose interest resulting in lower conversion rates.
• Personalization: Personalization involves not only your website but also your service or your product. Highlighting how your product differs from competitors can attract more potential customers and can significantly increase your conversion rate.
• Social proof: Never underestimate the power of social proof. One in two users reads product reviews before buying a product. Proudly display how well users have liked your product using ratings and reviews. Displaying reviews can also lead to increased trust and increased conversions for your site. 
• Trust: Newly acquired customers might be unwilling to trust a new brand or product. To gain their trust, it is important to provide as many details and reviews as possible. To establish and maintain trust among new customers, provide dedicated pages to shipping and return policies. Maintaining clarity can also increase the conversion rate. 
• Payment method/Checkout experience: The payment and checkout experience can be the final deciding factor in a conversion. It is important to keep it secure, smooth, and informative.  

Many other factors can impact the customer’s final decision and, ultimately, the conversion rate. These include the device type your ad appears on, different channels, website design, concise product descriptions, image quality, text on the landing page, etc. 

Best Practices to Improve Your Conversion Rate for Google Ads

Engaging in practices to improve and optimize your conversion rate is known as CRO (conversion rate optimization). This includes calculating your conversion rate, defining your goals and optimizing your site accordingly. 

To increase the conversion rate for Google Ads, here are a few practices you can engage in: 

1. Optimize your website

User experience is the heart of your conversion funnel. From the moment a user is shown your ad to the final transaction, where they make the payment, each aspect of the funnel needs to be thoroughly optimized. 

Marketing can bring new customers to your website, but it is entirely useless if the user experience is terrible. 

Based on how you’re marketing your product, ensure that your data on the landing page matches what you’ve offered to your customers in the first place.
Build trust with them by giving complete product information and offering adequate information on shipping and return policies. 

You must also optimize your website for mobile users.

Additionally, aim for a simple, elegant design for your website to make it easy for customers to navigate different pages.

To verify the loading speed of your website, you can check out this tool.

2. Use keywords, search terms, and negative keywords effectively

Ever heard of the phrase, ‘well begun is half done’? 

I’m sure you have–well that applies to conversion rates too. Let’s start at the beginning, at the point where Google displays your product to a user based on different target audiences. 

At this point, ads for audiences that are not necessarily in the mindset to go down the conversion funnel, you’ve wasted your ad potential. 

To avoid this, you must make the right use of best keywords in Google Ads, search terms and negative keywords(especially in performance max campaigns).
Keywords can be used by advertisers and marketers to get their ads to show up for specific audiences.

Search terms are the literal queries entered by users to look for particular products.

Negative keywords are used by advertisers to stop their ads from showing up for particular keywords.

The key difference between keywords and search terms is that search engines utilize keywords to attribute your products, while search terms are literal words that your target audience puts in their search bars on Google. 

Negative keywords can further remove audiences that are less likely to convert and thus can significantly impact your conversion rate. 

If you sell shirts, your target keywords are “Men’s Shirts” “Cotton Shirts” “Shirts for Children” etc. The search terms your audiences might use are “blue cotton shirts for men buy online”. Consequently, if you do not sell women’s shirts, your negative keyword will be “Women’s Shirt”.

💡Many advertisers use the term ‘free’ as a negative keyword to avoid customers looking for free products. Many also utilize this as their keyword if they offer free trials or subscriptions.

3. Include catchy CTA

A CTA or call-to-action leads your customers to the next stage in the conversion funnel. A simple ‘Add to Cart’ button on your landing page can prompt users to consider purchasing on your website. 

Consider utilizing clear, compelling CTAs in your ad copies. You want to ensure that your customers are informed of the action you want them to take. You can also add ad extensions to your Google ads copy. Extensions provide additional information and can increase engagement for audiences. They function as additional CTAs and can take conversion rates higher too.

Based on their placement in the conversion funnel, you want to provide them with a seamless transition from interest to action without being pushy. Some commonly used CTAs are:
– Subscribe Now!

• Subscribe Now!
• Act Now
• Apply Here
• Call Today
• Download Now
• Get a Quote

Using CTAs that align with the customer’s journey can be the key to unlocking higher conversion rates. 

4. Prioritize a high Quality Score

Google rates the relevance of keywords and PPC ads using an “ad quality score.” Quality Score is the number given to your ad copy. It is dependent on the ad performance (click-through rate), the relevance of the keyword to the ad group, the quality of the landing page, ad text, and the performance of your Google Ads account in the past. 

It determines the CPC (cost-per-click) and your ad rank during the auction. It also helps with keyword bidding.  

A high-quality score implies that your ad, ad text and targeting are relevant and helpful to users. A high score can increase ad ranking and lower the ad cost. 

Here are a few tips to get a high quality score for your ads:

• Use your brand name in your keywords: If your ads show up for highly relevant keywords, Google might increase the quality score for your ads.
• Narrow down the audiences your target: Targeting audiences that are using the exact search terms will make your ads appear in bold-this can increase ad relevancy.
• Focus on the landing page experience: Ensure your include all necessary information on your landing page to improve customer experience and get better quality score.

Here is the benchmark for keyword-based quality score:

For branded keywords: 8 to 10
For high-intent keywords: 7 to 9
For low-intent keywords: anything around 7
For competitor keywords: 3 or above

A high Quality Score can create a domino effect and improve your overall campaign performance, target better audiences and increase the likelihood of a conversion. 

Conclusion

Conversion rate is an incredibly important metric that measures the success of your ad campaigns on Google. Knowing the factors that impact conversion rates, different average conversion rates for different industries and following the best practices are sure to bring in desired results over time.

FAQs

Why Is conversion rate important in Google Ads?

The conversion rate in Google ads can help you determine the success of your ad campaigns. It provides the percentage of conversions done by users as compared to the users who click on your ads. 

It can also help with budget allocation, plan future campaigns and increase the efficiency of campaigns.

What does “converted clicks” measure?

Before conversion rate, ‘converted clicks’ was the metric used to determine the success of a campaign. It is the number of times that an ad was clicked that resulted in one or more conversions. 

Google retired converted clicks and replaced it with conversion rates.

What is conversion rate in Google Ads?

Conversion rate in Google ads can tell you the percentage of users who have performed a desired goal compared to the number of ad interactions.

Conversions can vary vastly depending on the desired goal, such as sign-ups, form submissions, or a purchase. 

You can calculate the conversion rate by dividing the number of conversions by total number of ad interactions and multiplying the number with 100.

How do you calculate the conversion rate in Google Ads?

To calculate the conversion rate in Google Ads, you must divide the number of conversions by the total number of ad interactions and multiply the number by 100. 

Conversion Rate = (Conversions ÷ Total Interactions) × 100

What is considered a good conversion rate in Google Ads?

Conversion rate varies by industry and the conversion goal (the type of action the user takes). A good conversion rate, on average, is 5% on the search network and less than 1-3% on display ads (it often goes under 1% as well).  

This, however, depends heavily on the industry and campaign goals. It can also be influenced by other factors such as the landing page experience, sale periods, target audience, etc. 

What factors influence conversion rates in Google Ads?

Conversion rates across different industries can be influenced by various factors such as ad relevance, landing page experience, call-to-action (CTA) effectiveness, audience targeting, and even external factors like seasonality or economic conditions.

How can I improve my Google Ads conversion rate?

Conversion rates can be improved by optimizing the landing page and overall website experience, utilizing strong and clear CTAs, and targeting audiences using relevant keywords and even negative keywords to filter out irrelevant traffic. 

Consistently monitoring ad performance and other Google Ads reports & metrics can help in planning future campaigns, too. 

How does the conversion rate impact Google Ads performance?

Conversion rate is an incredibly critical metric that determines the efficiency of your ads that turn clicks into valuable actions. High conversion rates can lead to higher ROI (return on investment) too. 

What is the difference between conversion rate and conversion value in Google Ads?

Conversion rates measure the number of conversions in ratio to the ad interactions. On the other hand, conversion value measures the total monetary worth of the conversions made. Marketers aiming to measure revenue should focus on the conversion value.

Check Out These Related Articles:

• View-Through Conversions in Google Ads