Conversion is basically the holy grail of digital marketing, the utopian goal every marketer on the web is striving for. But, if you have been in this world of digital advertisement for a while, you already know only a few achieve their conversion targets.
Improving your conversion rate is vital for enhancing your ROI and making the most of your online marketing budget. After all, if you aren’t turning your web visitors into buyers (or action takers) at an optimum rate, why have a business website in the first place?
Conversion rate optimization allows you to take advantage of every penny of your PPC spend by identifying that sweet spot that persuades a good number of your visitors to take action. Then again, what’s a conversion rate? What’s the average conversion rate? What conversion rate should you target for your website? Let’s take a look.
What is a conversion rate?
For any business, the conversion rate connotes, turning your potential clients into buying customers. For site owners, a conversion rate refers to the percentage of site visitors who take the desired action. The archetypal example of this is the percentage of site visitors who actually buy, order, or book something through the site.
For instance, if your business website is visited by 200, 000 people during the month of June, and among those visitors, 5000 people bought something from the website, your conversion rate would be 2.5% (5000/200,000). In the world of business, however, conversion rates aren’t about the customers alone. The definition is somewhat extended to include any key performance indicator (KPI) that essential for your enterprise.
This may include frequenting the site for a number of times, spending a certain amount of time on the site, downloading an application, downloading and actually using the app, upgrading from one level to another, subscribing (paid or free), and becoming a registered user, etc. Basically, this entails any other action that you may want users on your site to do, even ‘micro-conversions’ such as simply watching a video or clicking a link.
What’s the average conversion rate?
Recent research by World Stream indicates that the average landing page conversion rate is about 2.35% across industries. Yet, there are high performing businesses at the top 25% that convert more than 5.31% or higher. When it comes to Google Ads, World Stream report that the average conversion rate is 4.40% on search networks, while significantly lower at 0.57% on display networks.
The main difference between display and search Google ads is that the display ads are basically ‘push’ advertising while search ads are ‘pull’ advertising. Display networks work as demand generators whereby your ads create awareness, while search networks work as demand harvesters and your ads here grab intent.
Does this mean that display ads are a complete waste of money? Absolutely not! It is vital to create advertisements that will drive conversions, such as in search networks, but we should never underestimate the power of brand awareness. As mentioned prior, display ads generate demand by creating awareness—no one searches for a brand they don’t know.
According to World Stream, the average industry-wise conversion rate vary significantly in both search and display networks. For instance, for vehicles, the conversion rate is at a high 7.89% (search networks) and 0.51% for display networks.
In tourism and travel, the average is 3.95% (SN) and 0.39% (DN); real estate 3.40% (SN) and 0.36% (DN); law and government 7.45% (SN) and 0.46% (DN); retail and general stores 4.23% (SN) and 0.53% (DN); and finance 4.17% (SN) and 0.80% (DN).
Amongst the most common industries, apparel performs poorly at 2.77% (SN) and 0.58% (DN), compared to the best vehicles. But this figures evidence that average conversion rates across sectors vary considerably, and you shouldn’t try to make the mistake of comparing your business to the average across industries. This may give you the impression you are doing well (or poorly), but in reality, you are not.
What conversion rate should you target for your website?
Again this will vary depending on your business and industry benchmarks. If you’re already hitting 3%, 5%, or even 10%, you may already be doing great. Such conversion rates indicate that you are already in business since you are getting your customers to act and tapping those CTAs.
But what is a good conversion rate? What should you target for your site? As mentioned earlier, the average across industries is 2.35%, yet the top 25% are converting 5.31% or higher. Idyllically, you want to target even higher than the top 25% and go for the top 10%. This are landing pages that are hitting a conversion rate of nearly 12% or higher.
Again, if you are currently at 3%, the conventional wisdom will tell you that you’re already doing great. If you’re sitting here, a jump to 5% will seem like an enormous jump. But, you’ll still be stuck around the industry’s average. The best is to aim for more than 10%, aspiring to beat your industry’s average conversion rate by 2x, 3x, or even 5x!