How Conversion Tracking in Google & Facebook Ads Improves Performance

‍“Work implies not only that somebody is supposed to do the job, but also accountability, a deadline and, finally, the measurement of results —that is, feedback from results on the work and on the planning process itself.”

Peter Drucker, Management: Tasks, Responsibilities, Practices, 1993

That quote might not be quite as pithy as Drucker’s apocryphal “What gets measured gets managed,” but a) he actually said the former, whereas there’s no evidence he said the latter, and b) it better describes exactly why you need measurement: feedback.

It can be great to get a Google or Facebook ad up and running. You’ll see your artwork and copy out in the world (hopefully), appealing to a sweep of prospective customers.

But if you are not tracking whether they are actually working or not, you can’t get the feedback you need to improve your ads and their performance. If no new customers come through the door, you won’t know why, and if new customers do sign up, you won’t know why.

Either way, conversion tracking gives you the feedback you need to improve, and it’s an integral part of running successful ad campaigns on Google and Facebook. Let’s look at what conversion tracking is, how it benefits you, how it works, and how you can implement conversion tracking through Freshpaint today.

What is conversion tracking?

Conversion tracking is how Google and Facebook measure the success of an ad campaign by tracking the actions taken by users after they click on an ad. Without conversion tracking, if someone sees your ad, you’ve no idea what the follow-up action is. With conversion tracking, you can identify behaviors you consider a ‘success’ for that ad. For most scenarios, this is a conversion event–someone signing up for a service or product or buying an item. But it can be something else completely–a newsletter sign-up, an ebook download, or even just hitting a certain page.

Conversion tracking is designed to get more leads and/or higher-quality leads to these conversion events to improve your conversion performance. Google and Facebook now rely heavily on using those conversion signals and machine learning to drive more of your desired conversions. In fact they’re so good at optimizing for more conversions that both companies drive more than $100B in ad business annually.

How do they do that? Primarily by improving targeting. Here are three ways:

1. Use conversion optimized bidding strategies: this is really the secret sauce behind why these ad platforms are so effective. Conversion optimized bidding strategies can optimize your campaigns around your main business goals. For example, if you’re a healthcare provider trying to improve access to patient care you may want visitors who click on a Google or Facebook ad to complete a form that verifies their insurance before helping them navigate to the care they need. The completion of that form would be considered a conversion.
2. Identifying high-performing audience segments: you can find the audience segments that are most likely to convert, and focus your efforts there. e.g., if an e-commerce store finds that customers who add items to their cart are more likely to convert they can adjust their targeting to focus on users who have added items to their cart in the past. You can also filter out audiences that you think are not likely to convert so you don’t waste your budget.
3. Adjusting targeting parameters: targeting parameters are the options such as industry, role, or location you have to focus your ads. Targeting specific parameters is effective at driving conversions by reaching more qualified leads. For example, a SaaS company might find that users in a specific industry are more likely to convert, so can adjust their targeting to focus on that industry.

So this becomes a conversion success feedback loop, where you (and Google and Facebook) adjust the audience for your ads to better match those that have successfully converted thus far.

This isn’t the only way conversion tracking helps improve performance. It can also help with:

• Optimizing Ad Spend. Conversion tracking helps identify high-performing campaigns and ad groups and measures return on ad spend (ROAS). By focusing on the campaigns and ad groups that are driving the most conversions, advertisers can optimize their ad spend by allocating more budget to those campaigns. You can also adjust bidding strategies to find the most effective and adjust budgets to maximize ROI.
• Improving Ad Creatives. Conversion tracking helps improve ad creatives by identifying high-performing ad variations that are most effective at driving conversions. You can then test, iterate, and optimize with this data to create more effective ad copy, images, and calls to action.
• Measurement and Reporting. Conversion tracking allows you to measure the success of your ad campaigns in real-time and report on the actual revenue or leads generated by the campaign. This information can be used to make data-driven decisions on future ad campaigns.

So conversion tracking gives you feedback on the people you’re targeting, the money you’re spending, and the ads you’re creating. And you can use this information in the moment to optimize the current campaign but also for future campaigns.

Setting up a conversion success feedback loop

You want to work conversion tracking into a feedback loop to continuously improve your ad campaigns. So what does that feedback loop look like. Below is a simple diagram to help you follow along.

In the diagram, your original ‘ad click’ is the ad and it’s creative that drove the initial interaction. The ‘conversion’ is the action that’s aligned to your business goal (like helping visitors schedule an appointment through your website), and the ‘success’ is the positive signal that gets fed back to the ad platforms so they can use machine learning to find more people to serve your ad to who are likely to schedule an appointment.

In the context of Google and Facebook ads, a conversion success feedback loop would involve:

1. Set up conversion tracking: You need to set up conversion tracking in your ad accounts to measure the success of your campaigns. You do that through either setting up a Meta tracking pixel or setting up a conversion action with Google ads. Note: If you’re in healthcare, these tracking technologies are what HHS is calling out as putting you at risk of HIPAA violations. We wrote more about that here. In that case you can use a platform like Freshpaint to manage this feedback loop in a HIPAA compliant way.
2. Measure results: Once the conversion tracking is set up, the ad platforms will be able to measure the success of your ad campaigns by tracking the number of conversions generated by each campaign, ad group, and individual ad.
3. Analyze data: You can then analyze the data to identify trends, such as which campaigns or ad groups are generating the most conversions, which ad creatives are performing the best, and which audience segments are most responsive to their ads.
4. Optimize campaigns: Based on the insights gained from the analysis, you then make adjustments to your campaigns to reallocate budgets, test different creatives, and change bidding strategies.
5. Repeat: You continue to monitor the results of the campaigns and make adjustments based on the feedback received from the conversion tracking. This creates a continuous feedback loop where you and the ad platforms are constantly improving the effectiveness of your campaigns based on real-world data.

Improving performance through feedback

Feedback is the most powerful tool for improving performance. It is how everyone gets better. When you are trying to increase revenue or just get people to a certain page, understanding your success or failure at that goal is critical to doing better.

That’s what conversion tracking allows you to do. Creating that conversion feedback loop is what helps ad platforms like Google and Facebook optimize for your desired business goals.