What is conversion rate?

The denominator decides the number

Conversion rate is conversions divided by something, and the something is rarely stated. Divided by impressions, clicks, sessions, visitors or users, the same conversions produce wildly different rates.

This makes conversion rates almost useless as external comparisons and entirely useful as internal ones — provided the denominator is held constant. A reported rate without a stated base is not a number anyone can act on.

Why a higher rate is not always better

Conversion rate rises when you reach fewer, better-qualified people. Narrow the targeting enough and the rate improves while total conversions fall.

That is the trade-off that matters, and optimising the rate in isolation reliably produces it. A campaign at 8% converting 200 people is worse than one at 3% converting 900, and only the second number is connected to the business.

Read conversion rate as a diagnostic of qualification and experience, and read total conversions and cost per outcome as the results.

Where rates mislead most

• Retargeting. Very high rates, because it reaches people already about to convert — see incrementality.
• Brand search. Similarly high, and largely harvesting existing demand.
• Small samples. A rate computed on a few dozen sessions is noise presented as a percentage.
• AI channels. Rates read low because much of the influence produces no click, so the conversions land elsewhere in the report.