How Are Rich Media Ads Different From Other Ad Formats?

How Are Rich Media Ads Different From Other Ad Formats?

Rich media became a staple of digital advertising in the mid-2010s. As of today, it is now one of the most efficient formats, with significantly higher click-through rates than traditional alternatives, such as standard banner ads. The best way to understand what makes rich media ads so efficient is by understanding what makes this format different from other ad formats.

Definition of a Rich Media Ad

A rich media ad is a type of digital advertisement combining interactive features and multimedia elements. Rich media ads are dynamic and typically contain advanced features like audio, video, or animated images. They may also feature more traditional aspects like static images and text.

Modern technologies, such as HTML5, allow rich media ads to include multiple layers of content in one ad. For example, a current-day rich media ad may feature streaming audio or video.

Formats of Rich Media Ads

Most rich media ads today are served in one of three formats: in-page, in-stream, and out-of-page.

  • In-page rich media ads appear on standard web pages. They can display ad creatives between the site content or on the page’s side margins. In-page rich media ads typically do not persist on the screen when scrolling up or down.
  • In-stream rich media ads are typically video ads that play while the user watches video content. In-stream rich media ads are divided into three subcategories, depending on when they begin playing: pre-roll (before the video content starts), mid-roll (interrupts in the middle of the content), and post-roll (plays after the video content ends).
  • Out-of-page rich media ads are not bound to the web page, instead displaying the creatives to users through external methods (e.g., pop-ups, pop-unders). Although out-of-page rich media ads are the most noticeable type, they also disturb the user’s experience the most and should be used sparingly.

Common Types of Rich Media Ads

Rich media ads are available in various types, each suited for different digital properties: standard websites, interactive media, video content, mobile applications, and more. Here are some of the most common types.

  • Banner ads: Rich media banner ads are a more advanced version of the traditional, static banner ad. They are simple to implement and ideal for displaying animated ad creatives on standard web pages.
  • Expanding ads: Expanding ads, also called expandable ads, display a partial message in a smaller window and invite users to click or interact on the ad to learn more or see the rest of the message. Although compatible with both desktop and mobile devices, implementing an expanding ad requires careful optimization when served on mobile due to the limited screen space.
  • Interstitials: An interstitial ad is essentially a full-screen pop-up, using the entire available screen space to display an ad creative. Although rarely seen on desktop devices, interstitials are frequently utilized in mobile applications such as games.
  • Multi-Directional Expanding (MDE) ads: A multi-directional expanding ad is a variant of the standard expanding ad that can expand in more than one direction. How an MDE ad expands depends on its placement on the page; for example, an MDE ad may expand to the left if implemented on the right side of the page. If the same ad is implemented on the right side instead, it will “know” to expand to the left.
  • Lightbox ads: This ad format was introduced by the Google Display Network (GDN) in 2013. It is a more advanced version of the expanding ad, displaying a banner the user can either hover their mouse (desktop only), click, or tap to expand. When expanded, the ad creative pushes the main content into the background, which appears dimmed and grayed out, helping the ad stand out more.

Related content: 10 Best Mobile Ad Sizes

  • Pushdown ads: Pushdown ads can be viewed as an alternative to expanding ads. Unlike a standard expanding creative, a pushdown ad doesn’t overlay the site content but simply pushes it further down the page. For this reason, pushdown ads are typically placed at the top of the page.
  • Slider ads: A slider ad displays an image or video ad creative on the corner of the screen. However, unlike typical banner ads, the slider ad is designed to persist on the corner, following the user as they scroll up and down.
  • Video ads: While most rich media ads can display video creatives, video ads as a dedicated ad type are typically played in an in-stream format over video content. A common example of this type of ad includes creatives playing over a YouTube video.
  • VPAID: Video Played-Ad Interface Definition (VPAID) ads are similar to standard video ads and play in-stream. However, instead of being played on dedicated video-sharing platforms, VPAID ads play on integrated video players embedded on other websites, typically over regular video-based content.

Table of rich media ad formats and compatible types

In-page
Banner ads
Expanding ads
MDE ads
Interstitial ads
Lightbox ads
Pushdown ads
In-stream
Video ads
VPAID
Out-of-page
Expanding ads
Interstitial ads
Slider ads
MDE ads

5 Critical Differences Between Rich Media and Standard Display Ad Formats

Rich media ads are among the most popular types of ads in today’s digital advertising landscape. They offer publishers, digital property owners, and advertisers numerous benefits and possibilities over standard display ads. Here are the top five differences between rich media ads and standard display ads.

1. More Room for Creativity

Per the IAB’s recommendations, standard display ads rarely exceed a total file size of 250 kilobytes. While the lightweight nature of such ads helps keep page load times low, the file size introduces many severe limitations on what standard display ads can do.

In contrast, rich media ads have a much higher file size limit. According to Google, the maximum file size of a rich media ad creative is 2.2 megabytes, corresponding to almost nine times more than a 250 kb display ad.

The higher file size limit compared to display ads gives advertisers and ad creative developers more room to create unique and engaging experiences. The higher limit also allows multiple files and elements to function, making it possible to create more complex ad creatives.

2. Interactivity and Engagement

Rich media ads allow advertisers and publishers to serve ads with a critical element that no other format offers: interactivity.

A typical example of a rich media ad using interactivity is the mobile interstitial, especially on mobile games and other highly interactive mobile apps. Many interactive interstitials offer viewers the possibility to play small snippets or examples of the game or app featured in the advertisement. This factor is crucial for boosting engagement, as it lets users get a “try it before you buy it” experience.

An interactive ad can turn an otherwise low-intent viewer into a high-intent one, significantly increasing the chances of a click-through or a conversion.

3. More Space for Branding

Traditional display ads are well-known for their limitations: not only is the actual ad size limited to relatively small form factors, but they also feature restrictions regarding file formats. For instance, a standard display ad was either static text in .html format or a static image, typically in .gif or .jpg format.

In contrast, rich media ads can function with virtually any multimedia file format, but most ad networks support large maximum display sizes. For example, Google supports rich media creatives up to 4096 x 4096 pixels.

The large display field and compatibility with virtually any multimedia format allow advertisers to create unique and complex branding experiences. A rich media ad can take advantage of dropdown menus, interactive elements such as buttons and clickables, expansion and retraction, audio features, or even host entire miniature games to retain the viewer’s attention and showcase product branding.

4. Higher Ad Visibility and Better Click-Through Rates

Many studies have shown that video content retains viewer attention more efficiently than text or static image-based content. Human brains process video content more quickly, resulting in higher information retention rates.

While these facts can explain the rise of video-sharing and streaming platforms, they also demonstrate why rich media ads taking advantage of audio and video elements have become the norm.

Viewers are more likely to see and engage with rich media ads and benefit from what the industry calls higher recall values: viewers remember rich media ads for longer periods. In turn, viewers interact more with these ads, resulting in significantly higher click-through rates (CTR). An Adform study has determined that rich media formats deliver 267% more CTR than standard banner ads.

5. Provides More Data and Insights

Building rich media ad creatives also gives advertisers and creative developers access to numerous additional data tracking and analysis avenues.

For example, rich media ads featuring video content can track the number of views, the percentage of viewers that saw the ad to the end, and the number of users that closed the ad manually, complete with an average time stamp.

The additional data can provide invaluable insights regarding the performance of your ad campaigns. It also provides more information than display ads can track regarding audience behavior, making it a more valuable tool for ad optimization.

Comparison Table

Key Feature
Image file types supported
Supported animated images
Supports video content
Supports audio content
Supports interactive content
Maximum file size
Creative formats
Analytics and data tracking
Rich media ads
Any
Yes
Yes
Yes
Yes
200 to 250 kb
Dynamic
Click-through rates + additional channels based on media type
Standard display ads
.jpg, .gif, .png
Yes
No
No
No
2.2 Mb
Static only
Click-through rates only

What Makes Rich Media Ads Better than Other Ad Formats?

Rich media ads have the potential to offer a more complex, more engaging advertising experience to viewers. A well-developed rich media ad can take full advantage of dynamic multimedia content and interactivity to attract the viewer’s attention, boost engagement, and improve conversion rates.

The primary reason to use rich media ads over other formats is the possibility to perform far more functions than a standard display ad, which typically only redirects to the advertiser’s site. With the right developers, nearly any type of dynamic experience is possible in a rich media ad.

Related article: What is an Ad Unit

For example, video-based rich media ads are compatible with a complete analytics suite. Interactive ads can provide information to attract the viewer’s interest, such as an ad with individually clickable product descriptions. Some examples, such as mobile game ads, can even be playable and provide entertainment on their own.

Benefits and Advantages of Using Rich Media Ads and Formats for Advertisers

From the advertiser’s point of view, rich media ads present many benefits and advantages. If you are an advertiser considering rich media ads for your next campaign, here are the top benefits they offer over more traditional ad formats.

  • Viewers pay more attention. Most rich media ad formats are designed to attract the viewer’s eyes and ensure they see and experience the ad creative. Expanding, video, and pushdown ads are among the most effective formats for capturing viewer attention.
  • More interactions and better brand awareness. Well-designed rich media ads, especially those that employ interactive content, are more likely to receive viewer interactions. They are also more easily remembered and last longer in viewers’ minds, contributing to improved brand awareness.
  • Improved click-through and conversion rates. The primary objective of an ad is to entice the viewer to buy or convert. Rich media ads are more effective at getting viewers to click through and visit the advertiser’s site, resulting in more conversions.
  • Better analytics. Rich media ads can track far more analytics data points than standard display ads, providing advertisers with more information to adjust and optimize their campaigns.
  • Better user experience if well-designed. A typical rich media ad offers many benefits to the advertiser: they are more memorable, more efficient, and provide more data and insights. The best-performing are well-designed and respect the user’s experience, ensuring it doesn’t disturb or stop them from viewing the site or app’s main content. Better user experience increases the likelihood that viewers will retain a positive opinion of the ad, boosting the ad campaign’s effectiveness.

Disadvantages of Rich Media Ads

While rich media ads have become the norm today, they have not entirely replaced other ad formats. Advertisers must be fully aware of the potential drawbacks of using rich media ads to maximize their effectiveness.

  • Rich media ads are more complex. By their nature, rich media ads comprise far more parts and elements than static ads, all of which must work as intended to serve the ad creative. Developing a high-performance rich media ad requires extra quality assurance to ensure it functions correctly.
  • Rich media ads take more time to make. Dynamic and interactive content requires longer development times and a broader range of specialized skills than traditional static display ads. Most such ads also require more testing and optimization to get right. For instance, video ads require personnel specialized in video editing, whereas interactive ads require more complex programming.
  • Rich media ads cost more. The added complexity and development times translate into a significantly higher investment cost. While there are many advantages to using rich media ads, and the potential return on investment is significant, advertisers must manage their ad spending carefully.

Monetize Any App, Site, or Digital Property More Efficiently with CodeFuel

As an advertiser, managing ad campaigns and creating engaging ad creatives are top priorities. Rich media ads are ideal for enhancing the effectiveness of your campaigns and keeping user engagement rates as high as possible.

However, creating and optimizing rich media ads requires the right resources and talent. That’s where CodeFuel comes in. Our team of digital advertising experts can help you create, manage, and optimize rich media ad campaigns and make the most out of your digital property. Get started with CodeFuel today.

TikTok Ad Formats

TikTok Ad Formats

TikTok, the popular social media platform known for its short-form video content, has become a go-to destination for brands looking to reach younger audiences. With over a billion active users worldwide, TikTok provides advertisers with a unique opportunity to connect with a highly engaged and rapidly growing community. But with so many ad formats available, it can be challenging to determine which ones best fit your brand’s goals.

What is TikTok?

TikTok is a social media platform where users can create, share, and discover short-form videos. The app allows users to record and edit videos using a large selection of filters, effects, and music. TikTok has become especially popular among younger generations, with a user base that skews towards teens and young adults.

The app has been downloaded over two billion times worldwide and has become a cultural phenomenon, with TikTok challenges, memes, and trends spreading across the internet. In addition to user-generated content, TikTok offers various TikTok ads via it’s own TikTok Ads Manager. You will also have to learn more about the types of TikTok ad formats and their use.

Types of TikTok Ads and TikTok Ad Formats

This social media offers a selection of the best TikTok ads and ad formats, which are unique to the social media platform.

1. In-Feed Ads

In-feed ads on TikTok are a type of native ad that appears in users’ “For You” feed, which is the app’s main page that showcases a personalized selection of videos. These types of tiktok ads are skippable; users can interact with them just like any other TikTok video:

  1. by liking,
  2. sharing, and
  3. commenting.

In-feed video ads are videos ranging from 5 to 60 seconds long paired with an ad display image. However, TikTok recommends keeping these ads on the short side of the scale to retain viewer attention more effectively. For this reason, most in-feed ads are between 9 and 15 seconds long. 

The video ads creatives on an in-feed video ad must not exceed 500 megabytes.

Pros of In-Feed Ads
1. High visibility
2. Targeting options
3. Creative flexibility
Cons of In-Feed Ads
1. Skippable
2. Competition
3. Limited branding opportunities

These in feed video ads can also include a call-to-action (CTA) button that takes users to a landing page, an ad description, app download page, or a hashtag challenge page. Advertisers can also target their in-feed ads based on audience demographics, interests, and behaviors.

In-feed ads are an excellent way for brands to increase brand awareness, drive app downloads and installs or website visits, and promote products or services. Since they appear in the main feed, in-feed ads have the potential to reach a wide and highly engaged audience.

2. Brand Takeover Ads

Brand Takeover ads on TikTok are ads designed to appear in full-screen mode when users open the app for the first time, ensuring high visibility with the app’s user base.

Brand Takeover ads display static image ads or video creatives for a short period (3 to 5 seconds), along with a clickable link redirecting users to a landing page or a hashtag challenge. Brand takeover ads can also include a call-to-action (CTA) button, such as “Shop Now” or “Learn More.”

Pros of Brand Takeover Ads
1. Highly visible and exclusive
2. Can quickly grab users' attention
3. Clickable link and call-to-action button can drive traffic and conversions
Cons of Brand Takeover Ads
1. Intrusive
2. Limited to one brand per day
3. Short ad length

TikTok enforces a 100% share of voice rule on Brand Takeover ads, meaning that only one brand can run a Brand Takeover ad per day. This rule was implemented to ensure maximum visibility and exclusivity. Brands can target their Brand Takeover ads based on audience demographics, interests, and behaviors.

Brand Takeover ads are an excellent way for advertisers and brands to grab users’ attention and increase brand awareness quickly. However, since they are highly intrusive, it is crucial to use them sparingly and ensure the brand takeover ad creative is as visually appealing and engaging as possible.

3. TopView Ads

Like Brand Takeover ads, TopView ads on TikTok appear when users first open the application. The primary difference between TopView ads and Brand Takeover ads is their placement within the app and length.

TopView ads appear at the top of the “For You” page and feature longer creatives:

  • Up to 60 seconds long, with autoplay and sound enabled.

Available aspect ratios are 16:9, 9:16, or 1:1, with a maximum file size of 500 MB.

The longer format of TopView ads makes them the ideal choice for brands looking to tell a story, showcase a product or service in long form, or generally capture audiences with an engaging or creative experience.

Each TopView ad can be displayed to each user once per day, and users may skip them by swiping up or tapping the Skip button after three seconds have passed. Brands can also include a clickable link or a call-to-action (CTA) button that takes users to a landing page or a hashtag challenge.

Pros of TopView Ads
1. Longer video length allows for more creative flexibility and storytelling
2. Autoplay with sound on can increase engagement
3. Highly visible and exclusive
Cons of TopView Ads
Can be considered intrusive
Longer video length may be better for users quickly scrolling through content.
Expensive and difficult to book

How can you view TopView ads?

TopView ads offer higher visibility than standard in-feed ads, making them an excellent choice for increasing brand awareness or reaching a wide audience as quickly as possible. The longer video length also allows for more creative flexibility and the ability to tell a more engaging story.

However, since they are highly intrusive, advertisers must ensure their TopView ad creatives are of the highest quality possible and feature highly appealing visuals to avoid annoying users. These requirements also mean TopView ads are among the most expensive, with each ad campaign alone typically costing brands $50,000 to $150,000 a day.

4. Branded Effects

Branded Effects aren’t traditional ads but a range of branded custom filters, stickers, and augmented reality (AR) effects users can share and use in their own video content. They allow content creators and viewers to interact with brands in fun and novel ways, creating a unique opportunity for user engagement.

Three groups of Branded Effects are available: standard 2D, 2D Pro, and 3D.

  • Standard 2D Branded Effects primarily use two-dimensional images or animations. They are the simplest and easiest to use of the three, making them an ideal choice for advertisers and content creators who are beginners at Branded Effects.
  • 2D Pro Branded Effects have all the features of their regular 2D counterparts, plus additional beauty filters. They’re ideally suited for showcasing cosmetics, wearables, or gaming products with facial elements because they allow content creators to virtually wear the product, demonstrating how it looks or functions.
  • 3D Branded Effects uses 3D models and animations instead of flat 2D elements. They are typically used to represent characters or wearables, such as hats, headphones, or glasses. 3D Branded Effects are compatible with special effects such as greenscreen or cloning. They can also be gamified to create a TikTok challenge or a more interactive experience.

Branded Effects allow brands and advertisers to let users express themselves and engage with brands through playful and creative means. It allows viewers and content creators to create a unique, deeper connection with the brand and the audience.

Pros of Branded Effects
1. Increases engagement and user-generated content
2. Allows brands to establish a strong visual identity on the platform
3. Can be used in combination with other ad formats for a more cohesive brand experience
Cons of Branded Effects
1. Limited to larger brands with a budget for custom AR and 3D designs
2. Users may not use the branded effects in a way that benefits the brand
3. Branded effects may not be enough to drive conversions or sales on their own.

Additionally, advertisers can integrate branded Effects into TikTok’s standard ad formats, such as in-feed ads or a hashtag challenge. Integrating Branded Effects into other ad formats helps boost their creative potential and creates a more cohesive and immersive brand experience.

5. Branded Hashtag Challenge

Branded Hashtag Challenges are another form of advertising unique to TikTok. They are designed to encourage audiences and content creators to become active participants in a brand’s marketing strategy.

The basic concept of a Branded Hashtag Challenge is simple: a brand or advertiser creates a hashtag and encourages users to create and share content using that hashtag. The content is typically related to the hashtag’s subject, such as dances, athletic feats, or other specific actions.

A well-known example is K18’s #K18HairFlip challenge, launched in December 2021, which encouraged users to perform a hair flip on video for a chance to win rewards.

Brands can also create their own content to kick off the hashtag challenge and inspire users to follow along. Branded hashtag challenges can be promoted through in-feed ads or other ad formats, increasing visibility and participation.

Pros of Branded Hashtag Challenges
1. Increases engagement and user-generated content
2. Can increase brand awareness and loyalty
3. Can be used in combination with other ad formats for a more cohesive brand experience
Cons of Branded Hashtag Challenges
1. Success of the challenge depends on user participation and creativity
2. Branded hashtag challenges can be time-consuming and expensive to produce
3. May not directly lead to sales or conversions

Branded Hashtag Challenges are a unique way for brands to advertise their products while encouraging content creation and increasing user engagement on the platform.

By creating a fun and creative challenge, brands can build a deeper connection with their audience and increase brand loyalty.

Like Branded Effects, brands can integrate a Branded Hashtag Challenge into other ad formats, such as in-feed ads. They are excellent ways to create an immersive branding experience that keeps audiences engaged and connected.

6. Spark Ads

Spark Ads are native ads on TikTok that let brands create ad campaigns around organic TikTok posts. Spark Ads can leverage the brand’s own TikTok account posts or, with their permission, those of other content creators.

The primary draw of Spark Ads is their use of user-generated content to deliver the ad messaging. As a type of native ad, Spark Ads tend to create ads that resemble organic posts and are designed not to look like advertisements at first glance. In essence, Spark Ads turn regular, organically created content into advertisements.

Pros of Spark Ads
1. Tells audiences an authentic and engaging story
2. Leverages user-created content to build a cohesive ad campaign
3. Engagement received through Spark Ads posts are fully attributed to the posters, even if the brand used another content creator’s posts
Cons of Spark Ads
1. May not be suited to brands without a partnership with influencers
2. Running a Spark Ads campaign can be expensive
3. While Spark Ads can generate many views and interactions, they may not always lead to conversions or sales
4. Collection ads are being phased out by TikTok and will no longer be available worldwide starting in April 3, 2023

A significant benefit of using Spark Ads is the attribution of user engagement and interactions. The ad can link to a TikTok account instead of a landing page, and all views, comments, likes, follows, and shares gained from a Spark Ad are attributed to the account that posted it.

A Spark Ads campaign gives brands a unique way to reach audiences and tell an authentic story, significantly increasing click-through rates and user engagement. Launching a Spark Ads campaign is also considered a cost-effective investment. According to TikTok’s own statistics, Spark Ads have a 134% higher completion rate, a 69% higher conversion rate, and a 37% lower cost per action (CPA) than their own standard In-feed ads.

Who Should Use TikTok Ads and Advertise?

TikTok’s unique audience and ad formats make it an ideal platform for businesses and advertisers in specific categories or industries. Brands that are innovative, visually appealing, and looking to reach younger and highly engaged audiences should consider advertising via TikTok Ads.

The platform’s video-centric and unique ad formats, such as Branded Effects and Hashtag Challenges, make it a great place for brands to showcase their products and create engaging content. Additionally, with TikTok’s significant international reach, it’s a great platform for brands looking to expand their global reach.

Reaching Young and Engaged Audiences

TikTok’s user base skews towards younger generations, with over 70% of users aged 18 to 34. These demographics make it an ideal platform for brands looking to reach teens and young adults. Additionally, TikTok Ads users are highly engaged, with an average of 52 minutes daily on the app. 

TikTok Ads offers brands a unique opportunity to connect with a highly engaged and rapidly growing community. By creating engaging native content and utilizing the platform’s special tik tok ad formats, brands can reach a younger demographic and build brand awareness and loyalty.

Ideal for Video Advertising

TikTok’s video-centric ad format makes it an ideal platform for brands looking to advertise through video content. With the ability to record and edit videos, brands can create visually appealing and engaging content that resonates with their audience.

In addition, TikTok’s ad formats, such as in-feed ads and TopView ads, are designed to display video content as seamlessly and naturally as possible, making it an effective way for brands to reach their audience.

Additionally, TikTok Ads allow brands to showcase their products or services engagingly and creatively and can help drive brand awareness, engagement, and conversions.

International Reach

With over one billion active users worldwide, TikTok is an excellent platform for advertisers looking to reach global audiences. The app is available in over 150 markets and 75 languages, making it an excellent platform for brands looking to expand their global reach. Additionally, TikTok’s growth is not constrained to any particular country or region. All international markets have experienced steady user growth since 2018.

This international reach allows brands to tap into new and diverse audiences and to create localized content that resonates with users in different regions. By using TikTok’s targeting options, brands can ensure their ads reach the right audience in each market. The platform’s international reach and highly engaged user base make it ideal for brands looking to expand their global footprint and build brand awareness and loyalty with worldwide audiences.

Unique Ad Formats Boost Engagement

TikTok’s unique ad formats, such as Branded Effects, TopView ads, and Branded Hashtag Challenges, are designed to boost engagement and drive results. These ad formats allow brands to create more immersive and interactive experiences for their audience, increasing brand awareness and engagement.

TikTok’s unique ad formats are designed to help brands stand out on the platform and create more engaging experiences for their audience than on any other social media platform. By using these ad formats, brands can increase brand awareness and drive results in a fun and creative way.

Make the Most Out of your Digital Property with CodeFuel

Businesses must make the most of their online presence to grow in today’s digital world. From social media to e-commerce websites, companies have a variety of digital properties that they can leverage to reach their target audience and drive results.

At CodeFuel, we understand the importance of digital marketing and the value of creating engaging and personalized user experiences. Our suite of solutions, including search monetization, content recommendation, and programmatic advertising, is designed to help businesses make the most out of their digital properties and maximize their revenue potential.

Whether you want to increase engagement, drive conversions, or monetize your online presence via TikTok Ads or any other social network, CodeFuel can help. Our team of experts is dedicated to providing businesses with the tools and insights they need to succeed in the digital landscape. So why wait? Contact us today and discover how CodeFuel can help you make the most out of your digital property.

10 Ways to Increase Conversion Rate

10 Ways to Increase Conversion Rate

For digital publishers and marketers, the conversion rate is one of the most critical indicators of the health and performance of their website, application, or digital property. Using every method available to boost your website’s conversion rate and decreases your cost per acquisition, improving the website conversion rate effectiveness of your ads, meaning you get more marketing efficiency for the same spending and increase the conversion rate.

What is Conversion Rate Optimization?

When you use tools, techniques, and other methods designed to help you improve your digital property’s conversion rates, you are using what the industry calls Conversion Rate Optimization (CRO).

Conversion Rate Optimization is a critical process in any marketing campaign because it allows you to get more value out of your visitors and customers, resulting in decreased acquisition costs, more sales, increased average conversion rates, and faster business growth.

Although the two metrics are related, boosting your conversion rate is not strictly the same as boosting your click-through rates (CTR) and impressions.

While they are part of your conversion funnel, impressions only measure the number of people that viewed your ads, and click-throughs measure the number of viewers that clicked on the ad and were redirected to your digital property. In other words, click-throughs and impressions are at the beginning of your conversion funnel; other aspects of your digital property must entice potential customers to convert.

Conversion Rate Optimization methods aim to further improve conversion rates in all aspects of the conversion sales funnel, such as the visual identity of your digital property, features improving user experience, and customer behavioral analysis.

Before You Start: Define Your Business Goals

Before discovering the top Conversion Rate Optimization methods, it is critical first to understand why conversions matter and how to define your business’s specific goals and objectives. 

A conversion occurs when a visitor of your site, app, or digital property completes a specifically defined action. For example, an eCommerce website typically defines a conversion as a visitor completing a purchase and becoming a customer. 

One of the primary business objectives for this site is to increase sales, and one of the most efficient methods is through Conversion Rate Optimization: increasing the percentage of visitors that complete purchases. CRO would help improve the sales copy of the value proposition and the average conversion rate value of each visitor, helping it grow.

Defining what your business considers a conversion goal is critical because it helps you determine which performance metrics to see a boost in conversions and which parts of your conversion funnel need improvements.

Common examples of conversions include the following:

  • Visitors purchasing a product for the first time (new customer acquisition)
  • Completing a contact form
  • Downloading an application
  • Signing up for a newsletter
  • Starting a free trial
  • Starting or renewing a subscription
  • Visiting specific landing pages or elements of a digital property

Top 10 Methods How to Increase Conversion Rate

Although the rate optimization process isn’t an exact science, requiring you to experiment and find what works best for your business, the most successful marketers have employed these top-performing methods for their CRO marketing campaigns.

1. Conversion Rate Optimization (CRO) Planners

While your conversion rate optimization strategy can begin with simple steps, mapping out a complete conversion rate optimization plan for critical landing pages of your digital property can be challenging without the proper tools and guidance.

A Conversion Rate Optimization planner, or CRO planner, is a dedicated tool to help you create a CRO plan and map out your website, app, or digital property’s optimization strategy. A CRO planner acts as a dashboard from which you can create optimization strategy elements, organize them over a timeline, and oversee the plan’s progress.

CRO planners are considered essential tools by marketers and developers in the industry. A commonly used example is HubSpot CRO Planner, which lets you visualize your conversion funnel, conduct audits to analyze your site, use various tools to analyze user behavior, and identify all possible optimization avenues. Most planners also come with their ancillary tools, such as A/B testing tools and page performance analyzers.

CRO planners also come with resources to facilitate research and analysis of benchmarks for your site’s sector, such as average conversion rates by device or platform, average conversion rates for competing sites, and other relevant data.

One of the best ways to maximize the effectiveness of your optimization plan is to adopt a CRO planner as early as possible. Besides serving as your central dashboard, choosing the right CRO planner will help you adapt your workflows and use its functions as efficiently as possible.

2. Visitor Behavioral Analysis

While knowing your business objectives is important, it is crucial not to rely on assumptions before testing or making changes to your digital property. Conversion Rate Optimization is almost entirely data-driven, meaning you must have a clear and unambiguous idea of your site, app, or digital property’s performance and fully understand how your visitors behave.

Although your conversion rate is among your most important metrics, there are many other crucial Key Performance Indicators (KPIs) you can track to understand your visitors better.

They include the following:

  • Number of monthly visitors
  • Ad campaign click-through rates and impressions
  • Bounce rates
  • Average number of pageviews per session
  • Average time spent on each webpage
  • Average time spent per session
  • Traffic sources
  • Social media referrals
  • Device type and operating system

3. A/B Testing

One of the core elements of a Conversion Rate Optimization campaign is experimentation. Differences in web page layout, style, design, functionality, button placement, and other elements affecting the User Experience (UX) affect the likelihood of a visitor converting.

Consequently, one of the most powerful tools a publisher or marketer can use for their CRO and marketing campaign is a resource that makes testing and experimenting easier and more convenient, such as an A/B testing tool.

A/B testing, also known as split testing, lets you compare the performance of two different web page layouts and determine which is more likely to result in conversions.

Some of the most widely used A/B testing tools include Google Optimize, HubSpot A/B Testing Kit, VWO, Optimizely, AB Tasty, and Omniconvert.

How A/B Testing Works

Before using an A/B testing tool, you must have access to two different versions of your property’s web page or element, such as a landing page. One is the current version, sometimes called the control or the champion, and the other is the challenger, featuring the changes you want to test.

Typically, the exact extent of the changes between the control and the challenger are minimal; they may even test a single element, such as a specific button’s size or placement. Although the overall objective is to increase the conversion rate, each A/B test may have a different goal, such as testing the usability of a new menu layout or the success of a new color or design on a specific site element. It is also a suitable tool for testing the addition of new site elements, such as video players, or the removal of superfluous ones.

When an A/B test is ongoing, about half of your customers will see the challenger version of the web page being tested, while the other half will see the control version. The A/B testing tool will display each version’s performance at the end of the testing period. If the challenger offers a significant increase in conversions, the changes tested may be worth implementing permanently.

4. User Interaction Tracking

Optimization is about improving your digital property and increasing its usability to entice more customers and sales. However, you can only implement meaningful changes or improvements by first understanding how users and visitors interact with it in the first place. Then, you can provide the data to the sales team.

User interaction tracking is a general term for behavioral analysis tools that lets you see how users navigate your website. Essential functions include recording and replaying mouse movements and displaying the page elements and buttons most likely to receive clicks and interactions. The results Google Analytics data, for example, are displayed using user interaction heatmaps, which show the most common mouse positions and the most commonly clicked areas.

More advanced features included in these tools can also retrace the average user’s journey through your site or app and tell you whether they skip specific elements or if they stop to interact with them, such as deals, offers, polls, or video players.

Examples of commonly utilized user interaction tracking tools include Crazy Egg, Smartlook, UXCam, and FullStory.

How User Interaction Tracking Helps Boost Conversion Rates

A user interaction tracking tool is primarily a form of analytics. While they don’t provide direct solutions to improve your conversion rates, they provide invaluable data and insights to help you make the right decisions.

Heatmaps and user journey recordings help you visualize your visitors’ typical experience while using your website, identify potential pain points and inefficient design elements, and enhance the features that work and receive the most interactions.

You can also use them to find “dead elements, which are parts of your website that users ignore or overlook. They can also help you find “false clickables, which are parts of your website that appear to be clickable elements but aren’t.

The ideal time to use a user interaction tracking tool is typically at the beginning of your Conversion Rate Optimization strategy before implementing any changes. You can also combine the insights received with A/B testing to guide you toward the parts of your site, app, or digital property that may require the most changes or modifications.

5. Live Chat

Visitors and users often fail to convert because they can’t find the information they need. In the past, this situation often resulted in losing many potential customers. Despite potential customers having a high intent to buy, the inability to find what they need causes frustration and turns them away from your site.

Today’s technological advances have made it possible to assist users who experience difficulties finding the information they need to convert. One of the most versatile tools a marketer or publisher can use is the live chat system.

How Live Chat Works

A live chat tool or service is like an instant messaging window integrated into your website. It makes itself available to users by hanging on the screen’s bottom-left or bottom-right corner. When a user clicks on the live chat window, it opens with a message asking the user whether they can provide help or assistance.

Publishers and developers can implement one of two types of live chat systems: Chatbots and live chat with human operators.

  • A chatbot is best suited for answering frequently-asked questions and guiding users to where they want to be, such as the correct product page. While chatbots are fully automated, function 24/7, and do not require human intervention to function correctly, the scope of their interactions with users is more limited. Recent advances have shown some chatbots may use artificial intelligence, machine learning, and natural language processing to provide more personalized responses and bridge the gap with human operators.
  • A live chat system with human operators functions similarly to an instant messaging system. Users can ask questions to a human operator and receive direct help or assistance regarding a particular subject. This live chat system is best suited for basic technical support, legal websites, and other platforms and applications that require live, personalized responses.

How Live Chat Improves Your Conversion Rates

A live chat system provides direct, instant help to visitors and customers, making it a source of customer engagement. Studies have shown that although a small fraction of users (15%) will use the live chat system, an adequately configured live chat system is a source of satisfaction: 81% of interactions with the live chat system are rated as positive by visitors.

Users who have completed a conversation on a live chat system are 513% more likely to buy a product or convert.

Live chat helps customers find their way, eliminates potential sources of frustration, and increases the chances of being able to increase conversion rates. Live chat can also serve as an additional line of communication between the customer and the company, allowing customers to reach out and feel heard.

Live chat is also gaining popularity with younger customers: a 2018 eMarketer survey shows live chat is the preferred method of communication with a brand or website for customers aged 18 to 49 and the second-preferred for customers aged 50 and over, behind the phone.

6. Abandoned Cart Emails

Although primarily employed by eCommerce platforms, one of the staples of a CRO strategy for this website category is the abandoned cart email system.

Publishers and website developers use numerous technologies and solutions to drive traffic and lead visitors to complete the desired action, such as a purchase on a product page.

From search engine optimization (SEO) to a robust ad campaign, you may already use these technologies to bring traffic to your site. Your analytics solution may tell you that these users regularly pick out items and select products to add to their cart.

However, if your statistics show your conversion rates remain low despite your efforts, check the Shopping Cart Abandonment Rate statistics. A high value may indicate the need for remedial action, such as abandoned cart emails.

How Abandoned Cart Emails Work

One of the most common causes of a high cart abandonment rate is simply a lack of readiness on the customer’s part, such as when a customer is “just browsing” or simply not ready to buy yet.

According to a study by the Baymard Institute, 58.6% of online shoppers in the United States abandon their carts from lack of readiness, making it a more common cause of abandonment than high costs, inconvenient or lengthy checkout processes, or technical issues.

This phenomenon indicates that most abandoned carts correspond to users who aren’t necessarily lost customers and who may still be reacquired and enticed to complete a conversion. The primary objective of an abandoned cart email is simple: If the user has a registered account or has submitted their email address to your company, the system will send the customer an email with a reminder of the cart’s contents and an invitation to resume shopping.

One of the best practices to ensure users see the email and resume their shopping experience is to keep these emails short and snappy, with a short copy and an easy-to-find button or link to return to the cart.

Abandoned cart emails may also feature product recommendations from the same or similar categories as the items in the cart. These recommendations can be a form of up-selling or cross-selling, incentivizing shoppers to buy a different or a higher-quality product and increasing the likelihood of a conversion.

7. Optimize Page Loading Speeds

Sometimes, users must complete the desired action because they find the website or application slow or unresponsive. Although website performance may not seem directly related to sales or conversions, it has one of the most significant effects.

Slow load speeds can frustrate users and make them feel like they are wasting their time, whereas fast-loading websites are more pleasant to navigate and benefit from higher conversion rates.

A 2019 Portent study revealed that the first 5 seconds of load times are the most critical for conversion rates, and publishers can achieve the highest rates by keeping the load times under 4 seconds.

The differences are crucial; websites with a 1-second load time receive 5% more conversions than websites with a 2-second load time and 10% more than a 3-second load time. At the extreme end of the scale, websites achieving a 6-second load time or worse lose half the conversion rate of a 1-second load time.

Load Speed Optimization Techniques

Although many load and page speed optimization methods are technical, publishers and media owners can access various options that don’t require extensive technical or development knowledge. Here are some of the best and most cost-effective ways to optimize your load and page speed.

  • Use free website audit tools like PageSpeed Insights to analyze your digital property’s performance. Such devices generally offer precise numbers and a color-coded scoring system to determine whether your current load speeds and site performance are acceptable.
  • Consider re-evaluating your hosting options. Many factors can affect your site’s load speeds, such as their servers’ geographical location, the company’s network bandwidth, or the details of your current web hosting plan. For example, whether you are on a shared hosting plan, a VPS, or a dedicated server can significantly affect your load speeds and overall performance.
  • A Content Delivery Network (CDN) might help you. CDNs use arrays of servers in various worldwide physical data centers to facilitate serving bandwidth-heavy content, such as images. For example, if your product page pictures are hosted on a CDN, users from a given geographic region will load images from the CDN server closest to their area. CDNs can be crucial for reducing load times and improving performance.
  • Use image compression and optimization techniques. Converting your product and site images to lightweight, web-friendly formats can help reduce the load on each web page and increase load speeds. For example, .webp images have a 26% smaller file size than .png equivalents and up to 34% smaller than .jpg / .jpeg versions.

8. Mobile Versions of your Website

According to the latest known statistics, as of March 2023, 60.67% of all website traffic worldwide comes from users on mobile devices, such as smartphones and tablets. Regardless of whether your website or digital property is in the eCommerce category, it’s highly likely that a significant percentage of your users, if not the majority, will access it on a mobile device.

Ensuring your website has a mobile-friendly version is vital to provide visitors on smartphones and tablets with the best possible user experience. Non-mobile-optimized websites may load more slowly and have issues rendering correctly on smaller mobile device screens, which can severely reduce the quality of a mobile visitor’s browsing and navigating experience.

Besides the risk of harming load speeds and user experience on a mobile site, a lack of mobile optimization can cost you conversions and traffic. One study suggests it takes the average user no more than 50 milliseconds to decide whether to stay on a website or close the tab. A high bounce rate (visitors quitting the website after viewing one page) from mobile viewers is one of the most common signs your website may not be mobile-friendly.

A properly designed and mobile-optimized version of your website loads more quickly, is better adapted to smartphone and tablet screens, is easier to navigate with tap and touch controls, and provides an overall higher-quality and more seamless user experience. Better UX on mobile results in fewer visitors bouncing, naturally increasing traffic and conversion rates for new visitors.

9. Simple Checkout Process

If your website is in the eCommerce category or has a product store with a checkout system, you likely define conversions as users completing a purchase. While a lack of readiness is the leading cause of cart abandonment, two other common reasons for abandonment during checkout include account creation and complicated checkout processes.

Most visitors looking to purchase products online will only retain their shopping experience on a given site if the checkout process is simple, time-consuming, or otherwise inconvenient. If you find yourself in this situation, analyze your current situation and verify that you aren’t losing sales to a convoluted process.

Below is a list of quick tips and changes to consider implementing to your website to increase conversions, simplify the checkout process for website conversions, and boost your website conversion rates further.

  • Don’t make account creation a requirement. Online shoppers frequently see the need to create an account as an additional, unnecessary barrier. Some don’t feel comfortable sharing personal data; others view it as time-consuming. Regardless, eliminating the need to open an account to buy a product may provide potential customers the convenience of completing a purchase.
  • Keep the checkout process contained to a single page. Spreading the approach to multiple tabs or windows only lengthens the time it takes to complete a purchase, making potential customers feel like they are wasting time. The best way to do so is to ensure your checkout form only requires the customer to enter essential information, with as little extra as possible.
  • Customers always like free shipping. Although it may only sometimes make sense for some products or geographic regions, offering free shipping can significantly motivate potential customers to complete a purchase. Free shipping decreases the risk from the customer’s point of view and helps them feel more confident in their shopping experience. An efficient compromise between customer convenience and revenue is to offer free shipping when the customer’s purchases reach a set minimum value (e.g., free shipping on orders of $50 or more.)
  • Consider offering free returns. Like free shipping, free returns are guarantees for the customer that help decrease risk and entice them to complete the purchase more confidently. A free returns policy helps them ensure that, if anything goes wrong with the product or their shopping experience, you will handle it at no extra cost to them.

10. Customer Reviews and Testimonials

Building trust with your customers is critical to increasing the likelihood of a conversion. One of the most efficient ways of increasing customer trust is to display positive reviews and testimonials written by fellow customers on a product page.

The most effective positive reviews and customer testimonials are those that answer potential customers’ questions about the product they are interested in purchasing. This type of review or testimonial is referred to as high-trust (e.g., high-trust review).

High-trust reviews and testimonials are statistically proven to work. According to a Vendasta study, 92% of consumers read reviews and testimonials before making a purchasing decision, 44% say recent reviews (written within the last month) are the most relevant to them, and 62% say they’ve seen at least one fake review on a local business.

These statistics indicate that customers care about reviews and testimonials. They are not only more likely to convert if they see quality, trustworthy customer impressions, but they also pay attention to reviews and testimonials that seem fake or untrustworthy, which can potentially drive conversions down.

Optimize Your Digital Properties’ Revenue with CodeFuel

Regardless of your sector or industry, creating a robust Conversion Rate Optimization plan and taking the proper steps to boost your website, app, or digital property’s conversion rates is critical for your business’s success. CodeFuel’s team understands this better than anyone else and has the resources and expertise to help you draw more traffic and convert more visitors. Contact us today to learn more.

FAQs

How do you fix a low conversion rate?

Low conversion rates are typically caused by issues and pain points experienced by potential customers as they go through your conversion funnel. Generally, a poor user experience degrades the customer’s journey and harms your conversion rate.

What causes a high conversion rate?

Digital properties with high conversion rates typically have pleasant web design, good user experience, a short and easy checkout process, and optimizations to let potential customers find what they want as easily as possible. 

Remember that no single factor guarantees high conversion rates. Conducting tests and making changes incrementally is the safest way to boost your conversion rate.

What influences my conversion rate?

Six factors are commonly recognized as the most influential to your conversion rate:

  1. Value proposition: What you offer your visitors and the benefit they gain from it is called a value proposition.
  2. Relevance: How easily visitors can find what they want.
  3. Clarity: How easy to understand your offer is.
  4. Anxiety: How credible and trustworthy you appear.
  5. Distraction: How much attention your visitors have toward your offer.
  6. Urgency: How likely visitors are to convert as soon as they visit.

How can sales conversion rates be improved?

If you run an eCommerce platform and your primary objective is to boost sales, the best way to increase your conversion rate is to continuously improve your digital property with Conversion Rate Optimization (CRO) techniques.

What does it mean to increase your conversion rate?

Increasing your conversion rate means increasing the number of visitors that complete a desired action, resulting in a conversion.

Which three actions can best improve my conversion rate?

Three techniques can help you improve your conversion rate at a relatively low cost, making them highly cost-efficient:

  • Choose the most specific keywords you can
  • Refine your audience traffic with negative keywords
  • Include pricing in your ads to attract high-intent buyers

What is considered a good conversion rate?

Many factors can influence conversion rates, and some specific rates are considered good, increase the conversion rates. The most significant factor is the sector of your digital property. A good conversion rate in one sector may not be good in another. Research average conversion rates for your own site, blog, or app’s category to determine the best percentages.

What is K-Factor and How to Calculate it?

What is K-Factor and How to Calculate it?

What is the K-Factor: Optimal Definition

The K-Factor is a metric inspired by the medical field and, more specifically, the concept of the basic reproduction number in epidemiology. The mobile marketing industry created the K-Factor to measure the virality of a digital property, such as an application, a website, or an eCommerce platform’s customer base.

In marketing, “virality” refers to the word-of-mouth potential, or in other words, the number of new users gained through a single existing user at no additional costs to the publisher.

Example

Suppose that 100 existing users of an application talk about it to their friends. If each user can convince 3 of their friends to install the app and become new users themselves, the virality effect has caused the userbase to grow by 300, with an average of 3 new users per existing user.

The higher the K-Factor, the higher the virality, meaning more people talk about your digital property and become new users.

Why is the K-Factor Important for Your Online Business?

The K-Factor is a key performance indicator (KPI) measuring the effectiveness of your ad campaigns’ user acquisition rates.

The best way to understand the importance of the K-Factor is to view it as the equivalent of an interest rate. It helps you assess how your non-organic user growth (users acquired through paid advertising) affects the organic user growth (users acquired without paying fees).

If you need to optimize user acquisition and increase your digital property’s reach, it is crucial to understand how the K-Factor functions and the best ways to boost it.

Calculating the K-Factor

The K-Factor is calculated by taking the number of invites sent by each existing user and multiplying it by the percentage of successful conversions. An invite typically takes the form of a referral URL redirecting the potential new user to a website’s sign-up form or an application’s corresponding app store page.

A conversion occurs when someone completes the sign-up process, installs the new app, or finishes the process to become a new user after clicking on the referral URL.

A high number of sent invites per user indicates that existing users actively recommend the site, app, or digital property to others. A high conversion rate means that the people seeing referral links are highly likely to complete the process and become new users.

K-Factor Formula 

The K-Factor formula is as follows:

I × C = K

Where:

  • The I-Factor is the average number of invites sent per user.
  • The C-Factor equals the conversion rate of these invites.
  • The K-Factor equals I times C.

Example

Suppose you are the publisher of a specific mobile game and know that your user base comprises 2,000 active users. You are starting an invitation cycle to encourage existing active users to invite their friends to install the game by offering in-game rewards for each successful installation.

  • If each user invites an average of 5 friends, your app’s I-Factor is 5.
  • If each invite successfully converts 1 out of 8 people on average, the conversion rate is 12.5%. Therefore, your app’s C-Factor equals 0.125.
  • The K-Factor formula is equal to I × C. In this instance, it is 5 × 0.125 = 0.625. Therefore, the app’s K-Factor is 0.625, or 62.5%.

In the above example, a complete invitation cycle will result in your active user count growing by 62.5%: from 2,000 to 3,250 users. If the second invitation cycle yields the same results, your active user count will increase from 3,250 to approximately 5,281 users. Assuming a steady K-Factor, the game’s active user count will exceed 1 million after 13 cycles.

How is an App’s K-Factor Determined?

Although the K-Factor formula is essential to understand how it works in theory, additional factors make determining a real-world application’s K-Factor more complex. In practice, tracking every single invite is impractical, especially those intended to be shared externally (e.g., referral URLs, codes, etc.).

While technically possible, your application would need numerous permissions (access to the user’s identity, phone call history, text messages, contacts, calendars, etc.) to track the information accurately. Upon installing the app and seeing the extensive list of permission requests, users may feel the app is invading their privacy.

Instead of tracking complete data regarding invites, most app developers use another more practical and more privacy-friendly method to determine an application’s K-factor.

According to the standard formula, K equals the number of invites sent multiplied by the invite conversion rate. However, instead of tracking the number of invites sent, a more straightforward solution is to use an alternative formula based on the number of users gained from accepted invites.

Although encouraging users to send invites is essential, the number of invites sent isn’t needed; only the number of invites accepted is crucial. To illustrate why, consider the following: if a single user sends 30 invites and converts 3, they have effectively achieved the same results as a user that sends three invites and converts three new users.

As a result, the K-Factor can be determined simply by measuring the number of users gained from invites.

In this case, the practical K-Factor formula is:

K = Number of users converted by invites

Example

The publisher of a fitness application with an active user base of 3,000 decides to launch an invitation cycle. At the end of that cycle, the app’s number of active users grows to 3,600, representing a 20% increase. As the number of active users started at 3,000, we can determine invites brought in 600 new users. Therefore, the app’s practical K-Factor is 600.

What is the Churn Rate?

The churn rate, also known as the abandonment rate or attrition rate, is the percentage of users that become inactive after a set period has passed.

An inactive user is a user that stops engaging with the app, website, or digital property. The most typical forms of abandonment include failing to log in and uninstalling the application.

The churn rate period is typically equal in length to that of an invitation cycle, as it helps an app publisher compare how many users they’re gaining from word-of-mouth with the number of users they’re losing to abandonment.

Example 

During the last 30-day invitation cycle, the fitness application’s analytics dashboard recorded that 145 users stopped using the app regularly, meaning they are no longer considered active users. In this instance, the app’s churn rate is 145.

How to tell a good K-Factor value from a bad one?

On its own, the K-Factor tells you the number of users you’ve gained through virality instead of ad campaigns. While user growth is a generally positive effect, you ideally want to ensure that you gain more users than you lose for each invitation cycle or set period.

The best way to use the K-Factor is to compare it to your churn rate and calculate whether your user base is naturally growing or declining. To do so, divide your practical K-Factor by your churn rate.

  • If the ratio is superior to 1, your user base has naturally gained more users from invites than it has lost to abandonment, resulting in overall growth. The higher the number, the faster and more exponential the growth.
  • If the ratio is equal to 1, it means you are gaining as many users from invites as you are losing to churn. Your app’s virality compensates for its churn.
  • If the ratio is inferior to 1, you are losing more users to churn than you gain from invites, which may indicate an overall user base decline.

In other words, a good K-Factor is superior to the churn rate, whereas a bad one is inferior. If both values are equal, your K-Factor is neutral.

K-Factor Chart Example

Below is a chart illustrating 3 example applications, one with a good K-Factor, one with a neutral K-Factor, and one with a bad K-Factor.

App 1 (Good)

App 2 (Neutral)
App 3 (Bad)
K-Factor
450
380
610
Churn Rate
200
380
960
Growth ratio
2.15
1.00
0.625

How to Boost your App’s K-Factor

If you’re looking to boost your app’s virality, it is critical to identify and understand which elements affect your K-Factor. Here are the 5 best practices and recommendations to optimize your digital property’s K-Factor and boost your app’s user growth.

1. Build a High-Quality App

Although it may seem like general advice, a high-quality application that is well-designed, attracts its intended audience, and is as easy to use as possible generally tends to be shared and talked about by its users.

Consequently, the first and most critical step to increase your application’s virality and K-Factor is to ensure it is the best possible product. Users who enjoy using your application and recognize it as a quality product are naturally more likely to recommend it to friends, family, and others.

2. Optimize your App’s Shareability

The shareability of an application is the combination of features and elements that make it easy for users to share content or talk about the application. These features can take on many forms, depending on the type and purpose of your application.

For example, if your app is a mobile game featuring an in-game achievement system, social media integration is a typical example of a shareability feature. Users can, for instance, connect the game to their social media accounts and automatically send a post to the platform of their choice when they obtain a specific achievement.

It is also crucial to consider whether your app has elements that decrease shareability. A critical part of making an app more shareable is to make it as easy and convenient to use, with as few hurdles between the user and the content and features they enjoy. This principle is especially true for new users; enhancing the first-time user experience is crucial to ensure new users continue using the app and become active, regular users.

For example, users usually dislike apps that repeatedly ask to leave comments or reviews, as it interrupts their experience. They may also view your app negatively if it requests too many privacy permissions or overly complex login systems.

3. Encourage Users to Invite Newcomers

A highly effective method of ensuring your active user base sends more invites is to offer in-app incentives for inviting newcomers onto the application. Typically, the condition for a successful conversion is when the newcomer has installed and opened the app for the first time, creating a new user.

For example, a mobile game may incentivize sending referral codes by offering users free quantities of in-game currency in exchange for each new user they invite. Developers can modify this method according to the specifics of the game; the rewards offered can be sent to both inviter and invitee, premium currency instead of standard, etc.

Although this method is most well-known for its use in mobile games, developers of non-game apps can also take advantage of this method, provided there is a reward or a bonus of some sort for users that do so.

4. Understand Your Audience

The K-Factor is a key performance indicator providing you with crucial information regarding user acquisition. As your user base grows, analyzing the data and profiles of the new users acquired through virality can help you obtain valuable insight into who your audience is and what types of users drive your K-Factor. 

The information obtained is critical to understanding your user base’s demographics, allowing you to adapt, modify, and improve your application and user acquisition campaigns accordingly.

5. Never Stop Experimenting

It is a good practice to regularly experiment, optimize, or modify your application or digital property to try and find novel methods of bringing in users. Don’t hesitate to use all the tools at your disposal: analyze your UA campaigns, ad creatives, and other analytics resources to find actionable data and information, then implement changes according to your findings. Afterward, monitor your user base statistics to see what helps the K-Factor grow more efficiently.

Increase Your Mobile App’s Revenue with CodeFuel

Whether you are the developer or publisher of a mobile application, a website, or another type of digital property, CodeFuel’s team is here for you. We can help you optimize your revenue streams, increase the effectiveness of your monetization strategies, and help you grow your app’s user base and profitability. Contact us today to get started.

What is Programmatic Media Buying and What is Programmatic Advertising Explained

What is Programmatic Media Buying and What is Programmatic Advertising Explained

Programmatic media buying, also called programmatic advertising, is an automated method and process of purchasing digital advertising space in real-time auctions. This technology of media buying uses data and algorithms to deliver targeted ads to the right audience at the right time and on the right device. In this post, we’ll explore what programmatic media buying is, how it works, and its benefits.

What is Programmatic Media Buying?

Programmatic media buying is the process of using technology to automate the buying, placement, and optimization of digital ads. Programmatic media buying is differentiated from traditional media buying, which involves less automation and slower manual processes.

Programmatic media buying eliminates the need for manual processes such as negotiation, phone calls, and paperwork. Instead, the technology uses algorithms and data to place ads in front of the right audience at the right time. This saves advertisers time and resources, allowing them to focus on strategy and creativity.

Programmatic media buying processes are divided into four groups: real-time bidding (RTB), private marketplaces (PMP), preferred deals, and programmatic direct.

  • Real-time bidding (RTB) is open to any advertiser and publisher, allowing them to buy and sell ads through instant, automated auctions. This type of programmatic media buying process is also known as open auctions.
  • A private marketplace (PMP) functions on the same technical principles as an RTB open auction but imposes limitations on who is allowed to join. Typically, a PMP is reserved for selected advertisers on an invite-only basis, although some platforms may allow advertisers to apply to join.
  • Preferred deals, also known as spot buying, are a compromise between RTB and private marketplaces. Under the preferred deal model, publishers and selling entities may offer inventory for a preferred, fixed price. In turn, buyers have “first-look” privileges, allowing them to see the ad spaces before negotiating a deal. Unsold preferred-deal inventory generally goes to an open auction.
  • Programmatic direct refers to the direct sale of media inventory from a publisher to an advertiser without using an auction system or competing with other publishers. Although it allows publishers and advertisers to enter into agreements directly, programmatic direct platforms automate the placement of the ads and allow both parties to negotiate the costs.

How Influential is Programmatic Media Buying?

Although programmatic media buying technologies have existed in some capacity since the early 2000s, an eMarketer study revealed they became the dominant form of digital display advertising in the United States in 2015.

Programmatic media and programmatic ad buying technologies have entirely changed how businesses operate and use online advertising. Compared to more traditional methods in the past, programmatic ads and technologies have expanded the reach of digital advertising, optimized the use of ad space, and enhanced ad-serving effectiveness.

Programmatic media buying is faster and more cost effective than traditional equivalents, resulting in reduced operating costs and higher returns on investment.

What is Programmatic Advertising, Then?

Programmatic advertising is a synonymous term for programmatic media buying. Both terms refer to the same concepts that let advertisers and publishers buy and sell:

  1. online display spaces (e.g., ad spaces) using automated processes,
  2. traffic data,
  3. and online display targeting.

Their main aim is to generate impressions.

How Does Programmatic Media Buying Work?

Programmatic media buying platforms form a unique environment called the programmatic advertising environment or programmatic ecosystem. This environment comprises multiple technologies and entities crucial to the programmatic ad serving process. Each plays a unique and critical role in managing programmatic ads, programmatic advertising costs, automated ad-serving, and display selling processes.

Although numerous technologies power the underlying processes, the programmatic media buying process is relatively simple. Here are the essential steps explaining how programmatic media buying works::

  1. Advertisers start new ad campaigns, design ad creatives, and use a demand-side platform (DSP) to purchase suitable ad space automatically.
  2. DSPs connect to ad exchanges and check for available ad spaces listed on supply-side platforms (SSPs).
  3. Users visit websites with suitable ad spaces. When a new visitor is detected, DSPs and data management platforms determine whether the visitor matches the targeting criteria of available advertisements.
  4. If a visitor matches audience targeting criteria, a DSP issues an ad request to an SSP through an ad exchange, launching an auction to obtain the visitor’s impression. Ads requested can be of any type as long as it matches the ad space. Typical examples include display ads and native programmatic advertising.
  5. The DSP processes the ad creative’s data and audience targeting parameters, then instantaneously places a bid for the impression via real-time bidding (RTB).
  6. The SSP compares bids placed by all participating DSPs and selects an auction winner. Typically, the impression goes to the highest bidder, although SSPs may sometimes impose a price floor to ensure the winning ad is of higher quality.

This entire process occurs every time a user visits a website with functional, suitable ad spaces. It generally takes no more than a few milliseconds, well within the average web page load times.

What are the Main Components of Programmatic Advertising?

The main components of the programmatic advertising environment are 3. They include sell-side platforms (SSP), demand side platforms, and ad exchanges.

1. Sell-Side Platforms (SSPs)

A sell-side platform, also known as a supply-side platform (SSP), is an adtech software platform and a component of the programmatic ecosystem designed to assist publishers, digital media owners, and others in display selling. The primary purpose of an SSP is to automate the management, optimization, and sale of ad space from an ad exchange.

SSPs are also designed to connect to demand-side platforms (DSPs) and ad exchanges, ensuring that the available ad space for sale will be given to the highest possible number of potential buyers and maximizing the potential revenue.

2. Demand-Side Platforms (DSPs)

A demand-side platform (DSP) is the buyer’s equivalent of an SSP. This adtech software platform is designed to assist advertisers, media buying agencies, and other buying entities. The primary purpose of a DSP is to automate bidding on ads and associated decision-making processes, such as bid amounts or target audiences..

DSPs allow advertisers to upload their ad creatives and connect to multiple ad exchanges and sell-side platforms (SSPs) to look for suitable ad spaces to display them. Automation then handles the bidding and ad-buying processes according to the advertiser’s parameters (e.g., target audiences, budget limits, integrations, etc.), automatically assigning ads to the best and most suited spaces.

3. Ad Exchanges

An ad exchange is an online digital marketplace accessible to advertisers, publishers, SSPs, and DSPs. The ad exchange is at the center of the programmatic advertising ecosystem, functioning as an intermediary.

The primary purpose of the ad exchange is to serve as the platform through which buying and selling entities can trade ad inventory and purchase ad inventory together. Ad exchanges host the real-time bidding (RTB) processes allowing for the buying and selling of ad inventory. They can accept nearly any type of ad creative, from native ads to display ads, mobile interstitials, and video ads.

Although many automated processes exist to ensure a sale takes place within a few milliseconds, the operating principle of an ad exchange is that of simple supply and demand. 

Publishers supply ad spaces and look for the highest bidder to buy ad space (ad inventory), whereas advertisers look for ad spaces with the best features and visibility to obtain a good return on investment.

Why is it Worth Choosing Programmatic Advertising?

Programmatic advertising offers numerous advantages to buyers and sellers, the most significant of which is the automation and streamlining of many manual, time-consuming tasks.

In the traditional media buying methods of the past, securing a deal to sell ad space involved many elements, such as negotiations, requests for proposals (RFPs), audience targeting, manual implementation of ads, and more.

Programmatic advertising lets machines handle all these aspects, saving publishers and advertisers considerable time, increasing the publishers’ reach, boosting the effectiveness and ROI for advertisers through better audience targeting, and decreasing advertising costs.

Programmatic advertising optimizes the processes to ensure that the right audiences see the best ads at the right time for the right price.

Good Programmatic Advertising Ad Campaign Examples

Numerous advertisers and companies have used programmatic advertising to their advantage, creating compelling ad campaigns. Below are three prominent examples of good programmatic ad campaigns.

1. Google Search App

In 2014, the search engine giant adopted programmatic advertising for the first time to improve the performance of their digital advertising campaigns. In doing so, Google became one of the earliest adopters of the technology. At the time, Google’s programmatic ad tech and marketing strategy focused on promoting the Google Search App, using first-party and third-party data to create a custom audience targeting solution.

Google’s adoption of programmatic advertising has resulted in a 50% increase in brand awareness, 30% lower cost per mille (CPM), and increased reach equivalent to 30% more users reached three times more frequently.

The search engine giant had set a target for 2014: to buy 60% of the company’s brand display marketing using programmatic media buying. The program was so successful that Google not only met but exceeded that goal, reaching 73% at the end of that year.

Google Media Lab representative Brendan Starr cited real-time ad campaign optimization as one of the most powerful advantages of this technology. This advantage allowed Google staff to refine their ability to target and reach audiences much more effectively than then-standard post-campaign reports.

2. Kellogg’s

Kellogg’s is another early adopter of programmatic advertising technology, first using it to boost sales in 2014, the same year as Google.

As a multinational food manufacturing company, Kellogg’s business depends on offline sales. This particularity meant the company had to overcome the challenge of using a technology primarily designed to drive views and sell products online. They determined the most critical key performance indicators (KPI) of a digital ad campaign for offline products were viewability (how likely a user is to see an ad) and frequency (how often a user views the same ad).

The cereal company used programmatic advertising technologies to maximize their ads’ viewability and frequency as much as possible, even partnering with ad management company DoubleClick to improve their audience targeting performance.

Programmatic advertising helped Kellogg’s achieve 70% to 80% more viewability and 2x to 3x more accurate targeting.

3. The Economist

The Economist, a well-known U.S.-based print and digital news publication, adopted programmatic advertising in 2016 to increase readership. To do so, the company analyzed its extensive audience data to gain more insights into how its existing subscribers interact with the site and its content.

After determining reader categories among The Economist subscribers (e.g., Politics, finance, economics, etc.), the publication treated each category as a separate target audience and designed ad creatives tailored to each. For instance, a reader in the Finance category would primarily see ads promoting its latest or most viewed finance stories. They then used programmatic advertising to distribute the ads, creating 60 different creatives.

At the end of their first programmatic ad campaign, the results came in, and The Economist benefitted in numerous ways: 1 million unique viewers, 650,000 new prospects, $650,000 earnings in ad revenue, 9,500 new subscribers with a lifetime value of over $15 million, and a 64% increase in the publication’s awareness.

The ad campaign resulted in a 10-to-1 return on investment, meaning The Economist earned about ten times the amount they spent on the campaign. The Economist’s efforts resulted in a nomination at the 8th Shorty Awards in the Multi-Platform Campaign category, citing how the ad campaign had changed viewers’ perception of the publication.

Why is Programmatic Advertising a Success?

According to eMarketer, the total spending on programmatic advertising in the United States alone was $75.09 billion in 2020 and is projected to rise to $141.96 billion by the end of 2023. There is no denying it: programmatic advertising is a success, making up an overwhelming majority of total digital ad spend. Understanding the top reasons why programmatic advertising is successful will help you see why it has become dominant in the ad tech sector.

More Accurate Targeting with AI software

Programmatic advertising platforms employ the latest advances in automation and algorithmic technology, such as artificial intelligence (AI), to facilitate most of the processes in media buying.

For example, programmatic advertising platforms can use AI to power their audience targeting tools. They can track down the most relevant and highest-intent viewers, resulting in high-quality ads displayed to audiences most likely to show interest in the product.

Better Reach

Programmatic advertising technologies are ideally suited for leveraging all possible advertising avenues and maximizing your reach.

They can serve ads of all ad types and ad formats, including native ads, video ads, interstitials, display ads, connected TV (CTV), and more, on desktop and mobile platforms.

Improved Ad Campaign Cost-Effectiveness

The most significant factor behind the success of programmatic advertising is the time and money saved by leveraging automation technologies. Programmatic platforms can secure deals and help place ads on available spaces to the right audiences within milliseconds.

Technologies such as real-time bidding also ensure that the ad inventory is bought and sold at the best possible prices, helping reduce the costs of an ad campaign.

Benefits of Programmatic Advertising to Advertisers

From the advertiser’s point of view, programmatic advertising has made it easier to reach their intended audiences, boosting sales and impressions more efficiently than any other digital advertising method. The top three benefits of programmatic advertising for advertisers are scalability, a real-time, data-driven approach, and high transparency.

1. Scalability and Flexibility

Regardless of the size of their business, advertisers of all kinds can take full advantage of programmatic advertising. Whether the advertiser belongs to a small or medium business or a major multinational company, programmatic advertising is designed to scale to the advertiser’s needs.

There are various tools and options if you have a limited marketing budget, such as daily budget ceilings and overall spending control systems. They all allow advertisers to precisely control how much they want to invest in their ad spend. Advertisers may simply scale their spending up or down as needed as their business grows or declines, making it flexible and adaptable.

2. Access to Real-Time Data

Programmatic advertising comprises data analysis and application technologies. Programmatic would not function if it didn’t have access to large amounts of data in real time. Consequently, advertisers and marketers can see and use the information to their advantage to make any changes or modifications they need to their ad campaigns.

For instance, if the data reveals a particular trend in the middle of a campaign, an advertiser can adjust their programmatic advertising campaign’s settings on the fly to try and capitalize on this new trend.

3. Transparency

Programmatic media buying provides advertisers with real-time data and insights, allowing them to optimize their campaigns.

Advertisers concerned about associating their products and services with suitable ad spaces can access numerous tools and options to ensure their brand’s safety. 

For example, a programmatic advertising platform can display information regarding where their (banner) ads are being displayed, what types of audiences they attract, and how efficient the campaign is. These metrics are critical for advertisers looking to fine-tune the effectiveness of their ad campaigns while ensuring they communicate the right messages to the right audiences.

4. Efficiency and Cost-effectiveness

Programmatic media buying eliminates the need for manual processes, saving advertisers time and resources.

It allows advertisers to bid on ad inventory in real-time, resulting in more efficient use of advertising budgets. The use of an AI software that regulates bidding caps allows advertisers to also be more cost-efficient.

Benefits of Programmatic Advertising to Publishers

Publishers have also significantly benefited from the introduction of programmatic advertising technologies. Like advertisers, publishers of all sizes can use programmatic advertisers to grow their business more efficiently than previous-generation digital advertising methods.

The top three benefits of programmatic advertising to publishers are:

  • advanced technology support, 
  • efficient inventory and data management platform, and 
  • detailed reporting.

1. Support from Advanced Technologies

Modern programmatic advertising platforms are powered by artificial intelligence (AI) and machine learning (ML) algorithms. These can analyze and predict trends regarding ad viewership and assist publishers by automating many tedious tasks, such as audience targeting, efficient ad placement, or bidding strategies.

2. Efficient Inventory Management

Programmatic advertising services are ideally suited to manage a publisher’s ad space inventory. Most platforms today can help publishers manage ad types, locations, and segmentation, ensuring that a publisher’s available supply of ad spaces is filled and efficiently utilized.  

3. Detailed Reporting

Just as they can provide numerous data types in real time to advertisers, programmatic advertising platforms today can create highly detailed and personalized data reports for publishers. They contain crucial information and insights to understand a publisher’s ad operation performance, allowing them to find the best opportunities to grow and improve their ad yield.

Programmatic Advertising Platforms & Tools to Use

Learn about the top five programmatic advertising platforms and why their features and options are among the best in the ad tech marketing industry.

  • Google Ad Manager (GAM): Ad Manager is the search engine giant’s programmatic advertising platform. This platform is an SSP, meaning it is aimed primarily at publishers. Over 75% of ad impressions in the United States are served through GAM.
  • PubMatic: PubMatic is a full-stack programmatic advertising platform suitable for advertisers and publishers. The platform’s top features include comprehensive real-time analytics, a powerful anti-fraud system, a sizable private marketplace (PMP), and a massive selection of ad types and formats.
  • Adobe Advertising Cloud: Publishers and advertisers looking to advertise through all media types often choose Adobe Advertising Cloud. This platform is compatible with a huge range of ad creatives: standard options like native, display, and video ads, and more specialized formats, such as connected TV (CTV), audio-only ads, and even search engine ads.
  • AdRoll: This programmatic advertising platform is owned by one of the oldest players in digital advertising, with over 15 years of experience working with over 120,000 of the world’s top brands. Top features include an easy-to-use interface, quick-start templates, world-class analytics systems, and high returns on investment.
  • SmartyAds: As another full-stack programmatic ad platform, SmartyAds offers a full suite of services for publishers and advertisers. One of the best uses for this platform is campaigns aiming to boost click-through rates, conversion rates, and overall engagement.

Common Misconceptions About Programmatic Media Buying

There are several common misconceptions that bring misunderstanding about programmatic media buying, including:

1. It’s too complex 

While programmatic media buying involves a complex ecosystem of players, it is still accessible to advertisers of all sizes and budgets.

2. It’s only for large advertisers

Programmatic media buying is accessible to advertisers of all sizes and budgets, allowing smaller businesses to compete with larger ones.

3. It’s only for digital advertising

While programmatic media buying is primarily used for digital advertising, it can also be used for traditional media such as TV and radio.

Boost your Digital Properties’ Profitability with CodeFuel

Programmatic advertising is one of the most efficient ways to advertise and serve ads in today’s world. If you need help getting started with your programmatic media buying journey, CodeFuel’s team of digital marketing experts can help you. Whether you are a publisher or an advertiser, we can help you leverage your digital marketing properties and extend their profitability. Contact us today to start.

FAQs

How much does programmatic advertising cost?

An average programmatic ad campaign costs between $0.50 and $2 CPM (Cost Per Mille), meaning advertisers pay publishers between $0.50 and $2 for every 1,000 ad impressions generated.

Is programmatic media buying more expensive than traditional media buying?

Programmatic media buying can be more cost-effective than traditional media buying because it allows advertisers to bid on ad inventory in real time, resulting in more efficient use of advertising budgets.

Can programmatic media buying target specific audiences?

Yes, programmatic media buying uses data to target specific audience segments, increasing the relevance and effectiveness of ads.

How to integrate programmatic advertising into your marketing mix?

If you aren’t using programmatic advertising, the best way to integrate it into your marketing strategy and marketing mix is to join a programmatic advertising platform, such as a DSP or an SSP, and start using their tools and offerings today.

Is programmatic advertising “the future of ad buying”?

According to the latest recorded statistics on digital advertising, programmatic ads made up 84% of all digital ad spending worldwide in 2022 and are projected to rise to 87% by 2026. Ads purchased programmatically are not only the future of ad buying but have already become the norm.

Are programmatic buying and real-time bidding the same?

No. Real-time bidding (RTB) is a technology used in programmatic buying and is the most common way to buy and sell ad inventory; the two terms are not always interchangeable. 

Programmatic direct is one of the four programmatic media buying processes and does not always use any auction or bidding system and would not be the same as with real-time bidding.

How to Calculate Conversion Rate

How to Calculate Conversion Rate

When creating and managing an advertising campaign for your digital property, one of the most critical metrics publishers must understand is the conversion rate. 

The conversion rate is a percentage value corresponding to the number of users that completed a desired action (conversions) divided by the total number of users.

If the success of your business operations primarily depends on sales and revenue, then calculating and monitoring your conversion rate helps you:

  • Determine how many new customers you’re gaining over a set period
  • Scale your ad spend rates
  • Accurately estimate your business profitability
  • Allocate your advertising resources more efficiently

A good conversion rate means your ad campaign is successful, reflecting a robust marketing strategy. It serves as a crucial data point to avoid overspending on your marketing efforts, which can endanger your revenue and even put your entire business at risk.

Understanding the definition of a conversion rate, how to calculate your own conversion rate, and what is considered a good rate for your sector are essential marketing skills. The information provided by your conversion rates will help you improve sales and ensure your business’s growth and long-term sustainability. 

Definition of What Conversion Rate Is

In simple terms, your conversion rate is the percentage of users or visitors that completed a desired action, referred to as a conversion. Conversion occurs when a website, app, landing page, or digital property has successfully achieved a specifically defined objective with a visitor or typical user. The most common definition of a conversion is when a visitor completes a purchase. However, this is only one example of a conversion. The exact definition of conversion for your business depends on your business objectives. 

To understand what conversion rates do for your business, it is crucial to understand the different meanings of “conversion” in the marketing world and the few ways to use them. It is also necessary to know the important marketing metrics for conversions. Check them below.

Common Types of Conversions

Other examples of conversions include:

  • Creating a new account on your website;
  • Signing up for a newsletter by submitting an email address or email conversion rate;
  • Completing a download;
  • Installing an application and completing specific in-app tasks;
  • Engaging with a visitor on live chat;
  • Visiting a set number of webpages;
  • Submitting a form or survey answers;
  • Upgrading from a free service to a paid one;
  • A click on a call button;

A conversion occurs when a visitor or an otherwise anonymous user performs a measurable action that transforms them into a paying or potential customer.

How to Calculate Your Overall Conversion Rate in 3 Steps

To calculate your conversion rate, you must first determine three data points: a defined period (e.g., one week, one month, one year, etc.), the total number of conversions completed during this period, and the total number of non-converting interactions recorded during this period.

1. Total Conversions

After determining what constitutes a conversion according to your business objectives, setting up the conversion tracking events, and choosing a specific period to calculate the conversion tracking data, count the number of successful conversions over the defined period.

For example, an eCommerce business typically defines a conversion as a website user or app visitor finalizing a purchase and spending money on its digital storefront. Count these actions over a defined period (e.g., monthly purchases) to obtain the total conversions.

2. Total Interactions

An interaction refers to any action a user can make that isn’t a conversion but can be compared to one. Like conversions, the exact definition of a non-converting interaction also depends on your business objectives. Examples of interactions include the number of clicks on one of your ads, the number of unique visitors on your website, the number of sessions opened in an application, and more.

For example, an eCommerce business may consider simply using the application or visiting the digital storefront as an interaction; in which case, the number of website visits is counted over a defined period (e.g., monthly visits) to obtain the total number of interactions.

3. Divide Conversions by Interactions

Once you have the total conversions and total interactions for the defined time period, divide the former by the latter, and multiply the result by 100 to obtain a percentage.

More Specific Conversion Rates

The basic conversion rate formula can be applied to calculate simple conversion rates for your business. However, depending on your sector and specific objectives of the online business, you may need to know how to calculate more specific types of conversion rates.

1. Lifetime Conversion Rate

Also known as the overall conversion rate, the lifetime conversion rate may appear similar to a standard conversion rate at first glance. However, instead of calculating it over a set period, it is calculated over the entire lifespan of your business. Consequently, the lifetime conversion rate compares your total traffic with the total number of conversions ever achieved. Thus, you gain predictability of the total conversions and potential profit your business can generate from this customer.

2. Channel-Specific Conversion Rate

A channel-specific conversion rate is a conversion rate calculated using traffic or total users coming from a single advertising or marketing channel. Knowing channel-specific conversion rates helps you determine how efficient your marketing strategy is in this channel. It is also crucial to compare the performance of different channels and identify which work best.

For instance, if you use both Google Ads and Facebook Ads to advertise your digital property, you may want to know both your Google Ads and Facebook Ads conversion rates, helping you determine how much traffic you draw from these advertising channels and what percentage of that traffic converts.

3. Keyword Conversion Rate

If you are familiar with SEO optimization, you may already know that not all keywords are created equal, and some may draw more traffic than others. A similar concept exists in Conversion Rate Optimization (CRO): some keywords may draw a higher conversion rate than others.

The keyword conversion rate helps you identify which keywords result in the highest rate of conversions and how to re-allocate your resources (e.g., making changes to web page body content or product descriptions) accordingly.

4. Landing Page Conversion Rate

The landing page conversion rate helps you calculate the number of users that convert after navigating to a designated landing page.

This specific type of conversion rate is primarily useful for campaigns intended to draw traffic to your website (e.g., email advertising) and incite visitors to complete a particular task with a call-to-action (CTA), such as subscribing or making a purchase.

5. Ad Campaign Conversion Rate

If your business relies on paid advertising campaigns to draw traffic and incite them to convert directly after viewing the ad (e.g., advertising campaigns for a mobile app), you’ll want to know the conversion rate for each ad campaign.

Knowing your ad campaign conversion rates will help you measure the effectiveness of the ad creative and determine whether to allocate more resources to a particular campaign.

Conversion Rate Formulas

The basic conversion rate formula is:

Conversion rate = (Conversions ÷ Interactions) ✕ 100 

    For example, if an eCommerce business has recorded 45,385 visits (interactions) and 7,823 purchases (conversions) in one month, the conversion rate calculation is:

    (7,823 ÷ 45,385) ✕ 100 = approximately 17.23697%  

    This business’s monthly conversion rate is 17.24%.

    Website visits and purchases aren’t the only ways to define interactions and measure conversion rates. There are multiple ways to define a conversion rate and equally as many conversion rate formulas.

    Examples include:

    • Conversion rate = (App downloads ÷ Number of app store page views) ✕ 100
    • Conversion rate = (Unique newsletter subscriptions ÷ Blog visitors) ✕ 100
    • Conversion rate = (In-app purchases ÷ Application sessions opened) ✕ 100
    • Conversion rate = (Purchases completed ÷ Leads generated) ✕ 100

      What is Click-Through Rate?

      The click-through rate (CTR), also known as the click conversion rate, is a variant of the original conversion rate but designed to measure a specific metric: the number of conversions generated divided by the total number of clicks.

      Click-through rates are primarily used to measure the performance of click ads but can be used to determine the performance of any ad or mechanism where a click sends the user to a landing page or a similar environment where they gain an opportunity to convert.

      Conversion Rate Difference Vs. Click-Through Rate [+Formula Examples]

      The primary difference between the conversion rate and the click-through rate is what it measures. The conversion rate compares the number of conversions to the total number of users or visitors, whereas the click-through rate divides the number of conversions by the number of clicks on an ad or element.

      When expressed as a formula, the conversion rate is written as follows:

      Conversion rate = (Conversions ÷ Visitors) ✕ 100 

      In contrast, the formula for click-through rates is:

      Click-through rate = (Conversions ÷ Clicks) ✕ 100

      Profitability Based on Conversion Rates

      To understand the profitability of an ad from your conversion rates, it is critical first to understand where your traffic comes from and how much you spend to acquire a customer compared to how much you earn.

      While increasing conversion rates is generally beneficial for profitability and long-term business sustainability, you may want to have more precise numbers to better measure your current performance.

      For example, if your website gets most of its traffic from a Cost-per-Click (CPC) ad campaign, you pay a given amount of money each time a user clicks on one of your ads. Each click is an opportunity for a user to convert. A CPC ad campaign is profitable and successful if the conversions bring in more revenue than you spent on the ads.

      To determine profitability, you’ll need to know the following data points:

      • Number of clicks (visitors)
      • Number of orders placed (conversions)
      • Cost per click
      • Revenue from orders placed
      • Average revenue per order
      • Total ad spend costs

      Suppose you spend $20,000 to acquire 80,000 clicks. Your cost per click would be $0.25. If these clicks result in 800 orders placed worth $40 each, your conversion rate would be 1%, and your revenue from orders placed would be $32,000. These values correspond to a net profit of $12,000 and a return on investment (ROI) of 60%: you’ve earned 60% more sales from customers than you spent attracting them with ads.

      If no other factors change, increasing the conversion rate significantly increases profitability because you obtain more conversions from the same ad spend.

      Main Metric
      Clicks
      Orders placed
      Conversion rate
      Total ad spend costs
      Cost per click
      Revenue per order
      Total revenue
      Profit
      ROI
      Scenario with a 1% conversion rate
      80,000
      800
      1%
      $20,000
      $0.25
      $40
      $32,000
      $12,000
      60%
      Scenario with a 3% conversion rate
      80,000
      2,400
      3%
      $20,000
      $0.25
      $40
      $96,000
      $76,000
      380%
      Scenario with a 7% conversion rate
      80,000
      5,600
      7%
      $20,000
      $0.25
      $40
      $224,000
      $204,000
      1,020%

      Additional Metrics and Data Points for CRO

      While knowing your conversion rate is crucial, you should also keep an eye on additional metrics and Key Performance Indicators (KPIs) to help ensure the profitability and efficiency of your marketing campaign and know more about the process called CRO. The five most important metrics to remember are:

      • ROI, 
      • CAC,
      • AOV, 
      • LTV, and
      • CRO

      ROI (Return On Investment)

      ROI stands for Return On Investment. It is a way to measure the cost-effectiveness of your marketing campaign, particularly when conversions result in revenue.

      The ROI formula is:

      (Investment gains – Investment costs) ÷ Investment costs

      In this context, the investment costs refer to the amount spent on a marketing campaign, whereas the investment gains refer to the campaign’s revenues. Generally, the higher the conversion rate, the higher the ROI of the marketing campaigns. The higher number of conversions brings the average cost of acquiring a new customer down.

      CAC (Customer Acquisition Cost)

      CAC stands for Customer Acquisition Cost. It measures the average money you spend to acquire a new customer or ensure a new conversion. The lower the CAC, the better, as it indicates your marketing strategy is cost-effective.

      The CAC formula is calculated this way:

      Total costs of sales and marketing ÷ Number of customers acquired

      A higher conversion rate brings the CAC down and increases the ROI due to getting more customers for the same ad or marketing spend.

      AOV (Average Order Value) and RPV (Revenue Per Visitor)

      The Average Order Value (AOV) is the average amount of money a single customer spends on your app or digital storefront during a particular period.

      The AOV formula is simple:

      Total revenue ÷ Number of paying customers

      For example, if your app has generated $62,500 in revenue and 2,000 customers for March, your AOV for the month is $31.25.

      The AOV helps you evaluate the efficiency of your marketing strategy by determining how much money a given customer is likely to spend. The AOV also allows you to calculate your average Revenue Per Visitor (RPV).

      Multiply your conversion rate by your AOV to obtain the RPV. The higher the RPV, the more profitable your digital property is, as this key metric helps you track the average amount of money earned per visitor, regardless of whether they convert.

      Example:


      Total visitors
      Conversions
      Conversion rate
      Total revenue
      AOV
      RPV
      Month 1
      20,000
      400
      2%
      $62,500
      $156.25
      $3.13
      Month 2
      30,000
      600
      2%
      $90,000
      $150.00
      $3.00
      Month 3
      35,000
      1,050
      3%
      $189,000
      $180.00
      $5.40

      LTV (Lifetime Value)

      A customer’s Lifetime Value (LTV) refers to the total amount of money a given customer spends on your storefront during their lifetime. A customer’s lifetime is the amount of time they spend forming a relationship with your brand, app, or company. For example, the lifetime of a mobile app user can be calculated from the amount of time they spent actively using it.

      LTV can be calculated using different methods and formulas, depending on your business type and objectives. Regardless of the method used, a high LTV across all your customers indicates a high degree of loyalty to your brand, app, or storefront. Knowing your customers’ LTV also helps you measure the efficiency of your marketing strategy and determine how steadily your business is growing.

      An example formula to calculate LTV in eCommerce apps is:

      • Average order value ✕ Number of purchases per year ✕ Customer lifetime in years

      Tracking Conversion Rates for Your Business

      Whether you operate a website, an app, or another type of digital property, using tools to track your conversion rates is essential. Google Analytics is one of the most commonly used tools for conversion rate tracking and optimization due to its powerful array of settings and options for web analytics.

      1. Testing and tracking software, such as Google Optimize, offer website personalization and A/B testing tools to help you compare the performance and conversion rates of your digital properties by modifying its text and visual elements.
      1. Behavioral analytics software such as Heatmaps can help you track how conversions happen by recreating a user’s path and click history. They can also help you identify the usability of your app or website with a direct demonstration of what users do when browsing.

      For instance, Heatmaps can reveal whether users show interest in written copy and body content and how often they click on buttons, links, and other clickable elements. It can also show you meaningful data on whether users attempt clicking on non-clickable objects and how often they click on competing CTAs and ads.

      Conversion Rate Optimization Tools

      Digital property owners looking to optimize their conversion rates, do A/B tests, and utilize a wide range of CRO tools. These tools can perform various tasks: testing, analytics, CRO testing tools, analytics tools, survey designers, journey mappers, and opt-in form designers.

      Examples of commonly utilized CRO tools include the following:

      • Google Optimize: Google is a multifunction CRO tool that can help digital property owners conduct multiple forms of web page testing, including A/B testing, split testing, and multi-variate testing (MVT). It is an ideal tool to experiment, compare performance, and find the highest-converting configurations.
      • Heatmaps: The purpose of this tool is to analyze user behavior and create visual “maps” showing which parts of your website they are most likely to click or tap onto. It can help you reveal whether your site design is easy to navigate and encouraging visitors to convert.
      • ConvertBox: If you rely on opt-in forms and personalized offers to convert customers, ConvertBox allows you to design high-performance forms and call-to-action pop-ups. This tool also includes built-in split testing and segment funneling functionality.
      • SurveyMonkey: Taking advantage of customer surveys can be challenging without the right tools. SurveyMonkey was designed to help digital property owners build fully customizable, high-converting surveys with ease.
      • Optimizely: Managing your content and running large-scale tests can be challenging if your site or blog has a large number of pages. Optimizely is designed to help you experiment, test, and refine conversion-oriented modifications from a single, easy-to-use platform, regardless of your site’s size.

      Conversion Rate Examples

      Suppose two commercial mobile applications in the same segment are competing on a given app store. The owners of both applications view in-app purchases as one of their most important KPIs, defining it as their conversion. They want to compare the number of in-app purchases (conversions) with the number of times users opened the app (interactions) during a one-month period.

      Both applications offer a single in-app purchase valued at $7.50, meaning the Average Order Value (AOV) for all conversions is $7.50.

      During the one-month period, both apps recorded 200 in-app purchases. However, while App A recorded 10,000 sessions opened, App B recorded 200,000.

      While both apps recorded the same revenue of $1,500 (200 ✕ 7.50), their conversion rates are very different.

       

      Conversion rate of App A: (200 conversions ÷ 10,000 interactions) ✕ 100 = 2%

      Conversion rate of App B: (200 conversions ÷ 200,000 interactions) ✕ 100 = 0.1%

        In this example, despite bringing in equal revenue, App A has a conversion rate 20 times higher than App B.

        So, How to Calculate Website Conversion Rate?

        If you operate a website and wish to calculate your conversion rate, you’ll first need to set a specific period. Most CRO tools track conversion rates by week or by month.

        After choosing the period to calculate, use your analytics software to determine the total number of visitors, your website has received during this period. Then, count the number of successful conversions during this same period, and divide that number by the total number of visitors. Multiply the result by 100 to obtain a percentage value.

        For example, if your website has received 28,000 visitors and recorded 980 conversions in February, your conversion rate is (980 ÷ 28,000) ✕ 100 = 3.5%.

        How To Track Conversions Month Over Month By Day

        Most analytics software and CRO tools can help you track your conversion rates over the periods of your choice. Tracking conversions and comparing your rates month-over-month can provide you with critical information regarding your business’s long-term performance.

        What is a Good Conversion Rate?

        On average, across all sectors, the top 25% of businesses achieve conversion rates of 5.31% or higher, and the top 10% of most companies get 11.45% or more. Although you generally want to optimize and improve your conversion rate as much as possible, what constitutes a good conversion rate depends on your business type, industry, advertising channels, and products or services sold.

        For instance, eCommerce businesses have conversion rates ranging between 2% and 5%. If your app, website, or digital property is in the eCommerce sector, your conversion rate is considered good if it achieves at least 2%. Average US-based eCommerce businesses have an average conversion rate of 2.63%, whereas the global average is 2.86%.

        Median conversion rates for websites vary significantly depending on the industry. For instance, websites in the real estate, family support, software-as-a-service, and business industries typically have median conversion rates of 2.5% to 3.5%. Legal, fitness, and finance websites have conversion rates ranging from 5.6% to 6.2%, and the highest-performing sectors, media, and restaurants, tend to exceed 8%.

        To determine whether you have a good conversion rate, research which sectors and industries your business belongs to and how well your competitors are doing. A given percentage may be considered high in one sector but low in another.

        Below is a table of average conversion rates by eCommerce sector:

        Sector
        Arts and crafts
        Automotive and motorcycling
        Baby and child products
        Clothing, accessories, and fashion
        Electrical and commercial equipment
        Food and drink
        Healthcare, fitness, and well-being
        Home accessories
        Home and kitchen appliances
        Pet care products
        Sports and recreation
        Average conversion rate
        3.79%
        1.55%
        0.99%
        2.44%
        2.23%
        2.37%
        3.62%
        2.16%
        2.48%
        3.28%
        1.75%

        Tips on How to Improve & Boost Your Conversion Rate

        Improving your conversion rate through specialized methods and strategies is known as Conversion Rate Optimization (CRO). Making modifications to your site, app, blog, or digital property for the exclusive purpose of improving your conversion rates counts as CRO.

        Implementing the right CRO strategies is among the best ways to optimize your website, application, blog, or digital property and improve your chances of converting users and visitors.

        The primary benefit of Conversion Rate Optimization is increased revenue with little to no increase in expenses. CRO is all about extracting more revenue from the traffic you already pull in. In other words, optimizing your conversion rates decreases the cost of acquiring a conversion.

        The best way to optimize your landing pages and improve your conversion rates is to create a dedicated landing page, research your audience, and build the content on the landing page to maintain the interest of potential customers and incite them to convert.

        The optimization process affects all aspects of your digital property, from aesthetically pleasing design elements and visual identity to high-quality, informative website copy. Following the best practices of CRO is essential to improve your conversion rates, boost conversions, and increase sales.

        • Define clear, precise goals for your optimization process. The best way to do so is to analyze your business’s current performance, then use the data and insights to set a target conversion rate and time frame.
        • Use your analytics suites to study your users or website visitors. Behavioral analytics provide invaluable information regarding user habits, preferences, and pain points. Identifying and addressing usability issues and user experience (UX) problems can significantly impact your conversion rate.
        • Pay attention to your bounce rate; it provides crucial information on how often your users leave your site or close your app and why. You’ll want to ensure your bounce rate doesn’t exceed 50-55%. If your bounce rate is too high, use your analytics tools to try and determine whether a particular element of your digital property is causing visitors to leave.
        • Consider implementing enter and exit surveys on your website’s landing pages. A powerful way to understand how your users think and behave is to ask them directly. Keep the surveys brief and easy to understand to ensure visitors are more likely to fill them out.
        • While aesthetics and brand identity are important, ensure your digital property is usable and functional first. Users are more likely to spend more time on websites, blogs, and apps that are easy to use and informative, increasing the chances of a sale.
        • If you are experimenting with a new layout, design element, or other changes to improve your conversion rates, avoid continuously tweaking and modifying it until you’ve gathered enough data to measure the impact of the changes. Constant modifications can make it challenging to determine what worked and what didn’t.
        • Prioritize dynamic language in your calls-to-action. Short, concise words with active verbs (e.g., “Buy now” or “Join today”) are direct and more likely to incite a visitor to convert. You can also use first-person language (e.g., “Yes, I’d like to sign up today”) to reframe the CTA from the visitor’s point of view and create a connection with them.
        • Directly address the user’s pain points with concise solutions. Your products should be presented as a solution to the visitor’s problems. Highlight the reasons why a visitor will benefit from purchasing it, or reframe the description to suggest why the visitor can’t afford not to try it.
        • Take advantage of customer reviews and testimonials. Visitors trust the opinions displayed in product reviews at least as often as personal recommendations. Consider prominently displaying positive customer reviews on your product pages to incite further sales.
        • Respect the visitor’s time. Avoid making them fill out long forms or submit excessive quantities of information before they can purchase the product or finalize a conversion. The faster visitors can convert, the more they will.
        • Limit distractions. While design elements and brand identity remain important, it is crucial to avoid implementing CTAs, links, and other page elements that could confuse or distract a visitor from finalizing a conversion.
        • Consider implementing incentives. Whether in the form of free downloads, bonus material, coupons, free webinars, or any other incentive you can think of, offering potential customers additional freebies can help you boost conversion rates. Remember that each type of incentive may have varying effectiveness on different visitor demographics. Don’t hesitate to use testing and comparison methods to see what works best for you.

        A/B Testing Method

        It is critical to test any planned changes before implementing them into your site, app, or digital property. One of the best testing methods in the industry is A/B testing because it lets you directly compare the performance of your current arrangement with those your changes would bring.

        A/B testing involves two versions of your own digital asset or digital property: version A, which is the current version as it currently stands, and version B, which is the version after implementing the desired changes.

        For example, suppose you intend to increase conversion rates with a more efficient landing page and more attention-grabbing site copy. In that case, you can use A/B testing to measure the performance difference before and after implementation.

        A/B testing is easy to scale and applicable to virtually any aspect that might affect conversion rate, from product page copy and advertisements to email text, newsletters, and even web page components. Even simple elements, such as button colors, font choice, or navigation layout, can have measurable impacts on your website’s conversion rate.

        Headline Optimization

        Although it may not fit as much copy as the body of a product page or the content of a blog post, the headline is critical to your conversion rates because it is the first thing a visitor will see.

        Headline optimization methods are among the simplest and most effective ways to boost your conversion rates. While optimizing a headline doesn’t require you to implement extensive changes, it can significantly increase the likelihood of a conversion if done correctly.

        Follow these guidelines and best practices to optimize your headlines efficiently and bring in more converts:

        • Include relevant keywords into the headline. Visitors and readers want to ensure they’re finding what they’re looking for, and proper keyword usage helps make your web pages and blog posts rank higher in search results. Ensure the keywords flow naturally with the rest of the headline, as it helps prevent visitors from thinking your content is spam.
        • Keep it short. Whether your headline is an email subject line, a title tag, or a social media post, you have a limited number of characters to get the point across. Use short but descriptive headlines, and take advantage of numbers to shorten the headline’s length whenever possible.
        • Turn it into a question. Asking a question in the headline may align it with your audience’s own questions, increasing the likelihood they will read on to find the answers they’re looking for.
        • Use headline testing software. Test each headline before posting or implementing them with testing tools, plugins, and other software to see which ones are the most likely to perform better.
        • Double-check for grammar and spelling. While mistakes happen, finding a spelling error or bad grammar in the headline can deter visitors and decrease your conversion rates. Always ensure your headlines are easy to read, concise, and free of spelling and grammatical issues whenever possible.

        Refined Audience Targeting

        Understanding your audience and who you are marketing your product, service, or brand to is critical to increasing your conversion rates. While having a high amount of website traffic is never a negative sign, having many visitors matters little if very few of them are interested in converting. For these reasons, it is critical to understand who your audience is to attract more people with similar profiles more efficiently.

        Use analytics tools to learn about your converts’ profiles. They can provide you with a wealth of information that you can use to refine your audience targeting methods, including:

        • Demographic information, such as age, gender, country of origin, education level, income, etc. It also includes more subjective data points like lifestyle, personality, interests, and behavior.
        • How they find you. Knowing where your traffic comes from (e.g., ads, Google search results, links on other websites, etc.) is essential to determine which advertising channels work best.
        • What they want and don’t want. Optimizing and refining your audience targeting may involve catering to their demands by adding more of what they are looking for and removing what they don’t want to see.

        Additional avenues to learn more about your target audience include customer surveys, direct interviews, and live chat discussions. These environments can complete the information provided by your analytics software and help you build more comprehensive visitor profiles.

        You can use the information to implement the following changes:

        • Adjust your offerings according to the wants and needs of your visitors.
        • Improve keywords and content descriptions to ensure your audience finds what they need more efficiently.
        • Understand how users describe the products and services they want, allowing you to change or adapt your content accordingly.
        • Prioritize the content the users want the most so they find what they’re looking for more quickly.

        Keyword Optimization

        Optimizing the keywords in your content is another efficient way of increasing your conversion rates. Keyword optimization is not only about choosing the right keywords for each page or product but also building a robust keyword strategy that can help attract visitors into your funnel and increase the likelihood of a conversion.

        Keyword optimization intended to improve conversion rates is part of a Conversion Rate Optimization (CRO) strategy. In the context of CRO, keyword relevance is not evaluated based on search intent like with Search Engine Optimization (SEO), but based on conversion intent instead, also known as purchase intent. In other words, if your digital platform is optimized for SEO but not for CRO, you will increase the number of visitors but not the number of converts.

        CRO strategies aim to find and implement high-converting keywords throughout your digital property to ensure visitors with high intent find your pages. Keyword research tools such as Google Keyword Planner or the keywords tool in Google Ads Reports are designed to help you find the most relevant high-converting keywords for your industry and sector.

        After determining these keywords, implement them into your digital property content and use A/B testing and other tools to measure the performance difference.

        Improve Your Conversion Rates with CodeFuel

        Boosting your conversion rates and improving your sales can be arduous, especially without assistance. At CodeFuel, our digital marketing experts can help you analyze your site or app’s performance and implement an efficient conversion rate and conversion optimization strategy to meet your business objectives. Contact us today to get started.