Conversion funnel
Encyclopedia
Conversion funnel is a technical term used in e-commerce operations to describe the track a consumer takes through an Internet advertising or search system, navigating an e-commerce web site and finally converting to a sale.
The metaphor of a funnel is used to describe the decrease in numbers that occurs at each step of the process.
Typically a large number of visitors register as page view
on a referring page which is linked to the e-commerce site by a banner ad, ad network or conventional link
. Only a small proportion of those seeing the advert or link actually click the link. The metric used to describe this ratio is the click-through rate
or CTR
and represents the top level of the funnel. Typical banner and advertising click-through rates are 0.02% in late 2010 and have decreased over the past three years. Click-though rates are highly sensitive to small changes such as link text, link size, link position and many others and these effects interact cumulatively. The process of understanding which creative material brings the highest click-through rate is known as ad optimization.
Once the link is clicked and the visitor to the referring page enters the e-commerce site itself, only a small proportion of visitors typically proceeds to the product pages, creating further constriction of the metaphorical funnel. Each step the visitor takes further reduces the number of visitors - typically by 30%–80% per page.
Adding the product to the shopping cart, registering or filling in contact details and payment all further reduce the numbers step-by-step cumulatively along the funnel. The more steps, the fewer visitors get through to becoming paying customers. For this reason, sites with similar pricing and products can have hugely different conversion rate
s of visitors to customers and therefore greatly differing profits.
The metaphor of a funnel is used to describe the decrease in numbers that occurs at each step of the process.
Typically a large number of visitors register as page view
Page view
A page view or page impression is a request to load a single HTML file of an Internet site. On the World Wide Web a 'page' request would result from a web surfer clicking on a link on another 'page' pointing to the 'page' in question. This should be contrasted with a hit, which refers to a...
on a referring page which is linked to the e-commerce site by a banner ad, ad network or conventional link
Link
Link, links, linking may refer to:- Education :* Hands On Learning Australia, implements the HOL LiNK program -Music:* Link , an American R&B singer...
. Only a small proportion of those seeing the advert or link actually click the link. The metric used to describe this ratio is the click-through rate
Click-through rate
Clickthrough rate is a way of measuring the success of an online advertising campaign. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown , expressed as a percentage. For example, if a banner ad is delivered 100...
or CTR
CTR
CTR may stand for:Institutions* Computing Tabulating Recording Corporation, a company that was renamed IBM in 1924* Center for turbulence research, a research institute at Stanford UniversityIn business...
and represents the top level of the funnel. Typical banner and advertising click-through rates are 0.02% in late 2010 and have decreased over the past three years. Click-though rates are highly sensitive to small changes such as link text, link size, link position and many others and these effects interact cumulatively. The process of understanding which creative material brings the highest click-through rate is known as ad optimization.
Once the link is clicked and the visitor to the referring page enters the e-commerce site itself, only a small proportion of visitors typically proceeds to the product pages, creating further constriction of the metaphorical funnel. Each step the visitor takes further reduces the number of visitors - typically by 30%–80% per page.
Adding the product to the shopping cart, registering or filling in contact details and payment all further reduce the numbers step-by-step cumulatively along the funnel. The more steps, the fewer visitors get through to becoming paying customers. For this reason, sites with similar pricing and products can have hugely different conversion rate
Conversion rate
In internet marketing, conversion rate is the ratio of visitors who convert casual content views or website visits into desired actions based on subtle or direct requests from marketers, advertisers, and content creators...
s of visitors to customers and therefore greatly differing profits.