Conversion (Conversion Rate) — is the completion of a target action by a user on a website, in an application or on another advertising resource. A conversion can be a purchase, registration, application, subscription, app installation, first deposit or another predefined action.
In traffic arbitrage, a conversion usually refers to the target action specified in the offer terms. For example, registration, application, purchase or first deposit.
How Conversion Is Calculated
The conversion rate — CR (Conversion Rate) is used to evaluate traffic effectiveness. It shows what percentage of users completed the required action.
Formula:
CR = number of conversions / number of clicks × 100%
For example, 1 000 users clicked on an ad, and 50 of them submitted an application:
CR = 50 / 1 000 × 100% = 5%
This means that 5% of the acquired users converted.
What Conversion Depends On
CR is affected by the entire campaign setup, not just the offer itself:
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Creative: how well it addresses the audience’s pain points and expectations.
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Traffic quality: how well the acquired users match the offer’s target audience.
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Landing page: loading speed, product presentation, application form and page usability.
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Offer: price, terms, product recognition and attractiveness of the offer.
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GEO: the same offer can produce a completely different CR in different countries.
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Traffic source: audiences from search, social networks, push advertising or organic traffic behave differently.
Conversion and Approval — What Is the Difference
A high CR does not necessarily mean high earnings. Conversion shows how many users completed the target action, while approval — shows what portion of the received leads was approved by the advertiser.
For example, an affiliate received 100 leads, but after review, the advertiser approved only 60. The statistics will show 100 conversions, but only 60 approved leads will be paid.
Important: CR cannot be evaluated separately from traffic quality. A campaign setup may generate many conversions, but if most leads are declined or do not meet the offer’s KPI, a high CR alone does not mean that the traffic campaign is profitable.
