What is a conversion rate (CVR)?
The definition of conversion rate: What is a conversion rate?
A conversion rate records the percentage of users who have completed a desired action. Conversion rates are calculated by taking the total number of users who ‘convert’ (for example, by clicking on an advertisement), dividing it by the overall size of the audience, and converting that figure into a percentage.
Conversion rates are a foundational metric for performance marketing because they indicate how effectively your campaigns, creatives, and user flows are turning interest into action.
Whether the goal is to drive app installs, purchases, subscriptions, or in-app events, conversion rate helps quantify how many users are taking the intended next step. This makes it a critical signal not just for campaign efficiency, but also for product-market fit, funnel friction, and user intent. Understanding and optimizing conversion rate is key to lowering acquisition costs and maximizing long-term value.
How to calculate conversion rate
Conversion rate can be calculated by taking the total number of users who have completed an action (or interaction, e.g. click on an ad) and dividing it by the overall size of the audience exposed to the relevant content, then multiplying by 100 to express it as a percentage.
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For example, an advertiser runs a campaign with an audience of 20,000 people. Out of that group, 800 people clicked on the ad (i.e. converted). To calculate the conversion rate, divide 800 by 20,000 to get 0.04, or a 4% conversion rate.
While the formula is straightforward, how you define both “conversion” and “audience” depends on your context:
- For ad campaigns, the audience might be impressions or clicks, and the conversion could be installs or purchases.
- For in-app actions, your audience could be all users who launched the app, and conversions could include registrations, tutorial completions, or transactions.
- For retargeting, the denominator might be re-engaged users, and the conversion might be reactivation or specific event completion.
Attribution windows also matter, especially in mobile marketing and advertising. A user might click on an ad today but install and convert several days later. Defining conversion rate within a clear attribution window (e.g. 1-day or 7-day) ensures your calculations reflect real user behavior and campaign performance.
Why are conversion rates important?
Conversion rates are an effective way of comparing and contrasting the performance of multiple advertising channels. As with the example above, conversion rates are particularly important when running mobile user acquisition because they can measure the success of each campaign. They can also be used to set ROI expectations when scaling a campaign.
A high conversion rate signals that your targeting, creatives, and user experience are aligned and moving users efficiently from impression to action. A low conversion rate, on the other hand, may point to misaligned messaging, UX bottlenecks, irrelevant traffic, or weak value propositions. These insights are crucial for optimizing ad spend and refining growth strategies.
Conversion rates don’t always refer to top-of-funnel actions like clicks. They can also be applied deeper in the funnel. For example, it’s possible to calculate the percentage of users who installed an app after clicking an ad, or who completed a specific in-app event like a purchase or subscription. These mid- and lower-funnel conversions help advertisers identify which users are not only engaging, but becoming valuable long-term.
This makes conversion rate analysis essential for full-funnel optimization. Marketers can feed this data back into audience segmentation, creative iteration, and bidding strategies to drive more meaningful outcomes, not just traffic. A consistently low conversion rate can also be a red flag for product issues, such as a broken onboarding flow or confusing UI, making it a key diagnostic tool across teams.
Conversion rate measurement helps marketers and advertisers to:
- Compare campaign performance across channels and platforms
- Evaluate the effectiveness of creatives, targeting, and UX
- Set realistic ROI and cost-per-acquisition expectations
- Identify high-value user segments based on in-app behavior
- Detect friction points in the user journey or product experience
- Optimize budget allocation and bidding strategies
- Guide creative and messaging iteration based on performance data
Using conversion rate to improve campaign performance
Once you’re confident with your conversion rate data, the next step is putting it into practice to make campaign and budget decisions that improve performance. High-performing teams regularly analyze conversion rates across channels, user segments, and touchpoints to uncover actionable insights.
For example, sudden drops in conversion rate may signal UX friction, misaligned creative messaging, or attribution issues. By monitoring this metric consistently, marketers can make informed decisions. Used in combination with other metrics like lifetime value (LTV) and retention, conversion rate becomes a key lever for both acquisition efficiency and long-term growth.
Conversion rates and Adjust
Adjust gives marketers the tools to measure and optimize conversion rates with accuracy and flexibility. Our attribution models connect each conversion to the right source, while event tracking captures the in-app actions that matter most to your specific app, such as registrations, purchases, subscriptions, and many more.
With these insights, you can compare performance across campaigns and cohorts, detect drop-off points in the funnel, and validate conversions thanks to comprehensive and preventative fraud prevention. The result is clear, reliable data that guides smarter budget allocation and creative decisions.
To see how Adjust can help you measure and improve conversion performance, request a demo to see our attribution and analytics solutions first hand.
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