Definition: Cost per conversion (CPC) is a key performance metric in digital marketing that calculates the total cost of acquiring a customer or achieving a specific conversion action, such as a sale, lead, or sign-up. It is determined by dividing the total marketing spend by the number of conversions generated.
Purpose: The metric helps marketers evaluate the effectiveness and efficiency of their advertising campaigns by providing insights into how much is being spent to achieve a desired outcome. A lower cost per conversion indicates a more cost-effective campaign, while a higher cost may suggest the need for optimization.
Application: Cost per conversion is used to assess the return on investment (ROI) of various digital channels and tactics, enabling marketers to allocate budgets more strategically. It is widely used across platforms such as Google Ads, social media advertising, and email marketing to track and improve campaign performance.
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