What is a conversion?
The definition of conversion
In marketing, a conversion occurs when a user does something in response to a call-to-action placed in an ad, offer or notification. What the action is that qualifies as a “conversion” can vary: for mobile, it could be a download, install, sign-up or purchase.
Marketers use conversion rates to measure the success of a campaign. Conversion rates are the percentage of users who have completed a desired conversion. This can be calculated by taking the total number of users who have completed an action and dividing it by the overall size of the audience exposed to that ad. For example, an advertiser runs a campaign with an audience of 20,000 people. Out of that group, 800 people clicked on the ad (ie. converted):
800/20000 = 0.04 or a 4% conversion rate.
Why are conversions important?
KPIs associated with conversion are key to assessing the effectiveness of marketing campaigns. You can only determine your ROAS if you measure how many users convert as a cause of that spend. When establishing your KPIs, it’s important to look at the conversions that align with your company goals. For example, a high conversion rate for installs is a positive outcome, but that won’t necessarily translate into greater revenue from in-app purchases. In this case, the conversion rate for installs and in-app purchases both need to be considered in your analysis to learn how to convert users from install to purchase.
Conversion and AppLovin
AppLovin provides a platform for advertisers to reach new users that are likely to convert. Our algorithms identify pockets of inventory with users who are most likely to download after they have seen an ad.