What is meant by "conversion rate" in Google Ads?

The term "conversion rate" in Google Ads specifically refers to the percentage of users who complete a desired action after clicking on an ad. This desired action could be anything from making a purchase, filling out a contact form, signing up for a newsletter, or any other goal defined by the advertiser.

Understanding conversion rate is crucial for advertisers because it directly indicates how effective an ad campaign is in driving the intended outcomes. A higher conversion rate suggests that the ad is successfully persuading users to take the desired action, while a lower conversion rate may indicate issues with the ad's effectiveness, the landing page experience, or the relevance of the product or service offered.

Other options reflect different metrics that do not directly measure the effectiveness of ad clicks in achieving business objectives. For example, the number of clicks divided by total impressions measures click-through rate (CTR), which shows how often ads are clicked but does not account for subsequent actions taken by users. The total budget spent on an ad campaign tracks expenditure but does not relate to user behavior. Similarly, the total number of ads served in a specific time period gives volume data without insight into user engagement or conversions.