Your cost per conversion and your conversion rate are strong indicators of whether your Google Ads account is heading in the right direction. A healthy conversion rate often shows that your landing page is doing its job and that your ads are being shown to the right people.
But if you are wondering what conversion rate actually means in Google Ads, here is a quick heads up before we dive in.
In simple terms, conversion rate tells you how good your ads are at turning clicks into actions that matter to your business.
How Conversion Rate Is Calculated in Google Ads
For a Search campaign, conversion rate usually compares conversions with eligible clicks. Across Google Ads, the denominator is eligible ad interactions, which can also include interactions such as video views.
Google Ads calculates conversion rate using the following formula:
Conversion Rate = (Conversions ÷ Eligible Ad Interactions) × 100
For the Search example below, assume all 1,000 clicks are eligible interactions.
If someone clicks on your ad and then completes a conversion action such as a purchase, enquiry form, phone call, or sign up, that counts towards your conversion rate.
Conversion Rate Example
Let’s make this easy with a simple example.
Your ad receives 1,000 clicks
From those clicks, you generate 100 conversions
Using the formula above:
100 ÷ 1,000 = 0.10
Multiply by 100 and your conversion rate is:
10% conversion rate
That gives you ten conversions per 100 eligible clicks. It does not necessarily mean ten different people converted, because the count depends on the conversion actions and counting settings.
Can Conversion Rate Be Higher Than 100%?
Yes. If you track several conversion actions or count every conversion, one ad interaction can produce more than one conversion. That is why you should check the actions behind the number before treating it as the percentage of people who became customers.
Google’s conversion rate definition explains this. My guide to primary and secondary conversions will help you check which actions are being used for reporting and bidding.
Ways to Increase Your Google Ads Conversion Rate
There are many ways to improve conversion rate, but it usually comes down to two main areas: your target audience and your landing page.
Improving Your Target Audience
You want to make sure your ads are being shown to people who are most likely to convert.
Some ways to refine your audience include:
Reviewing age demographics and excluding age groups that are unlikely to make a buying decision
Analysing your search terms report and adding negative keywords for searches that show informational intent rather than commercial intent
Tightening keyword themes so your ads match exactly what users are looking for
This helps ensure that the people clicking your ads already have the right mindset to convert.
Improving Your Landing Page
Once someone clicks your ad, your landing page needs to do the heavy lifting.
Key improvements you can make include:
Adding social proof (Trustpilot reviews, Google reviews, testimonials)
Clearly explaining your product, service, or offer and what the user will get
Showcasing results, wins, or benefits to build trust and confidence
Streamlining the conversion process so there are fewer steps
Your landing page should be simple, focused, and easy to understand. Visitors should be able to make a decision quickly without feeling lost or overwhelmed.
Conclusion
Conversion rate is one of the most important metrics in Google Ads. Understanding what it means and how it is calculated gives you a clearer picture of how well your ads and landing pages are performing.
By improving your targeting and optimising your landing pages, you can increase your conversion rate and get more value from your ad spend.
If you would like external help with your Google Ads, I help businesses manage PPC campaigns around the world. You can book a 30 minute consultation with me where I can support you with future ads and ongoing performance improvements.