A conversion rate records the percentage of users who have completed a desired action. Conversion rates are calculated by taking the total number of users who convert and dividing it by the overall size of the audience. Change that figure into a percentage to find your conversion rate.

For example, let’s say an advertiser launched a Google Display campaign that reaches an audience of 1,000 people. Out of those 1,000 impressions, a total of 60 users clicked on the ad (which is our conversion event). The overall conversion rate in this scenario is calculated as follows:

60/1000 = 0.06 (or a 6% conversion rate from ad impressions to clicks)

The advertiser can now use this conversion rate as the metric upon which they can try to optimize for further efficiency (by, say, making the ad more relevant so more users click on it).