What is conversion rate in ecommerce?
How is conversion rate calculated?
Take the actions you count and divide them by a base: ad interactions, sessions or users. That base is the denominator, and it is where most confusion starts.
- Per ad interaction. This is the Google Ads definition: conversions divided by ad interactions that can be tracked to a conversion in the same period1. It covers people who clicked or interacted with an ad.
- Per session. This is what shops usually mean: orders divided by sessions. A vendor's glossary gives the same shop-side definition of conversion rate2.
- Per user. Orders divided by people. One person can have several sessions, so the same vendor notes a per-visitor rate usually comes out higher2.
Google Ads notes that its rate can pass 100 per cent if you track more than one conversion action or count every conversion, because one interaction can then produce several1. What counts as a conversion also varies: each platform decides what counts and when.
Why does it matter?
It links traffic to orders. With a low conversion rate, each order needs more paid traffic. With a higher one, the same ad money buys more orders.
But it can mislead. A rate that rises because you switched denominators has not improved anything. Your shop report and your ad report often disagree, because they divide by different things.
For ZFD: Our convention is to write the denominator next to every conversion rate and to flag any change of definition. Context for how this fits media decisions is in our paid media strategy for ecommerce.
Worked example
Easily confused with
Conversion rate vs CRO (conversion rate optimisation)
The practice of getting more existing visitors to act, using analytics, research and controlled tests. Conversion rate is the number. CRO is the work. See ecommerce CRO testing.
Conversion rate vs Conversion
One counted action. Rate is conversions divided by something.
Conversion rate vs A/B test result
A change in rate between two versions. Whether it is real is a question for statistical significance: a check on whether a difference is unlikely to be chance alone. It does not say whether the effect is big enough to matter.
FAQ
What is a good conversion rate?
We do not quote one. It depends on your product, price, traffic mix and what the denominator is. Compare yourself with your own past, same definition.
Can conversion rate be over 100 per cent?
In Google Ads, yes, if you track more than one conversion action or count every conversion1. A per-session shop rate counting orders cannot normally do that.
Is a higher conversion rate always good news?
No. It can come from heavy discounts, which cost margin, or from a smaller denominator rather than more orders. Check orders and margin before you celebrate.
Sources
- Conversion rate: Definition - Google Ads HelpPrimary source
- What is Conversion Rate?Vendor
Let’s find what’s actually working.
Next step. See what your conversion rate does to your ad numbers. Use the Is your ROAS real? calculator.