PPC glossary

Conversion rate

Conversion rate is the percentage of ad clicks, visits or other interactions that end in a conversion, such as a sale, enquiry or sign-up. Google Ads calculates it by dividing conversions by ad interactions, so 50 conversions from 1,000 interactions is a conversion rate of 5%.

Reviewed by Gareth Hoyle, Managing Director
Last reviewed 31 October 2026

How is conversion rate calculated?

In Google Ads it is conversions divided by the ad interactions that can be tracked to a conversion in the same period. If an account tracks several conversion actions, or counts every conversion rather than one per click, the rate can go above 100%.

Analytics tools often use sessions or users as the base instead of ad clicks, so the same campaign can show different conversion rates in Google Ads and GA4. Neither is wrong; they answer different questions.

Why it matters so much in PPC

Cost per acquisition is cost per click divided by conversion rate. A £2 click converting at 4% costs £50 per conversion; lift the conversion rate to 8% and the same click costs £25. Smart Bidding works from the same maths, predicting the chance of a conversion in each auction.

What moves it

Most gains come after the click, so we look at the landing page before the bids.

How closely the landing page matches the search and the ad that brought the visitor
The offer itself: price, delivery cost, stock and returns
Page speed and how easy the page is to use on a phone
Form length and the number of steps to buy or enquire
What is counted: newsletter sign-ups mixed with sales inflate the rate, and missing consent or broken tags deflate it

Example

A B2B software company sends paid clicks to a long feature page with a demo form at the bottom and converts 1.5% of them. A shorter page that repeats the searcher's problem in the headline, shows pricing and puts a four-field form above the fold converts 3.5%, which more than halves the cost per demo request at the same CPC.