How to Measure Conversion Ratios & Traffic Quality
In this article we're going to look at conversion tracking - the process of tracking the number of website visitors that are being "converted" by performing a certain action, such as buying your product, joining your mailing list or downloading an ebook and so on. There's no point advertising your product if people visiting the sales page aren't being turned (or converted) into buyers. The conversion ratio will tell you all you need to know. For example, if 100 people visit your sales page and one of them buys the product, the conversion ratio is 1%.
We're going to take things a step further though. I'm going to demonstrate how you can advertise a free ebook on your website, and track not only the overall conversion ratio but also the individual conversion ratio for each advertising source. For example, if you advertise your free ebook in several different ezines then you'll be able to see which ones are sending you the most targeted traffic (i.e. generating the highest conversion ratio). Ezines sending you untargeted traffic will generally produce a lower conversion ratio. This makes sense because if you're getting untargeted traffic, the number of people actually downloading your ebook will be lower than that which you'd get from targeted traffic, who are more likely to be interested in your ebook.
Let's look at a quick example. If you advertise in two ezines and the first sends you 1000 visitors and only 10 download your ebook, the conversion ratio is 1%. If the second ezine sends you 100 visitors and 20 people download it, the conversion ratio is 20%. If it costs $100 to advertise in the first ezine then you're paying $10 per download, because ten people downloaded the ebook. If it also costs $100 to advertise in the second ezine then you're paying only $5 per download. These figures are just made up for simplicity and aren't realistic, but the principle is all that matters here. The first ezine may have many more subscribers, and therefore look like a better deal, but only through conversion tracking can you see the real picture. In this example it's clear that the second ezine offers much better value for money, dollar for dollar.
Let's put this all into practice and see how it actually works. You'll need your own hosting account with PHP installed and the ability to upload files to your webspace. The first thing we need to do is create a webpage to advertise the free ebook. Call this page "freebook.html". Here's an example you can copy (in Internet Explorer just click on "View>Source" and save the file, in Firefox click "View>Page source", then click "File>Save page as"):
http://www.phpsuccesstools.com/ex/freebook.html
You'll also need a "Thank You" page that people are sent to after entering their email address. Call this page "thank_you.php". Once again you can copy the following example:
http://www.phpsuccesstools.com/ex/thank_you.php
The reason why the "Thank You" page is a PHP file and not a HTML file is because the form on "freebook.html" can't submit to a normal HTML page. If you don't understand what that means then don't worry, it's not important. You can make your own "Thank You" page if you want - just make a normal HTML page but call it "thank_you.php". Upload both of these files to your document root, which is where your "index.html" file normally goes.
In real-life applications you would probably use a mailing list provider to record the user's email address. In this example the form on "freebook.html" simply submits the visitor's email address to the "thank you" page without recording it anywhere. This is fine for example purposes, but in reality you'll need to replace the form on "freebook.html" with that given to you by your mailing list provider. As long as you can specify a "Return URL" or similar then everything will work ok. Set the "Return URL" to the address of the "thank_you.php" page. This is simply the page the visitor is returned to after they join your mailing list. Not all mailing list providers call it a "Return URL". GetResponse calls it a "Confirmation URL" for example. Whatever it's called, just make sure you set it to your "thank_you.php" page.
The next step is to set up a conversion-tracking script. Go to http://www.phpsuccesstools.com, click "mailing list" in the navigation bar at the top and subscribe, then check your email for the password. Click on "Free Scripts" in the navigation bar and then click on "Conversion Tracker (Click Based)". Now fill out the form as follows:
Password: stats (normally you'd choose a better password, for simplicity we'll stick with "stats")
Destination URL: freebook.html
Name: free
Leave the rest of the form alone (unless you know what you're doing) and press the "Submit" button. Follow the instructions on the next page, where you'll be asked to save several files onto your computer and upload them to your webspace and change the permissions. Upload them to the same place as "freebook.html" and "thank_you.php".
If you've never changed file permissions before then don't worry, here's a great guide that simplifies this already simple task:
http://www.phpsuccesstools.com/do.php?p=permissions
Now add the following code to your "thank_you.php" page (which isn't necessary if you've used the example page above as the code is already present):
img src="free.php?sale=1" border="0" width="1" height="1"
Don't forget to add angle brackets at the start and end of the above tag.
Now let's put the conversion tracker to use. For the purposes of this demonstration, we'll assume you want to advertise your free ebook in two different ezines. In reality you can monitor up to 1000 different advertising sources, and obviously they don't have to be ezines.
Your ad in the first ezine should advertise the following URL:
http://www.yourdomain.com/free.php?ezine1
The second ezine would advertise this:
http://www.yourdomain.com/free.php?ezine2
You can see examples of these URLs here:
http://www.phpsuccesstools.com/ex/free.php?ezine1
http://www.phpsuccesstools.com/ex/free.php?ezine2
All we have to do now is look at the conversion stats:
http://www.yourdomain.com/free.php?stats
You can see some example stats here:
http://www.phpsuccesstools.com/ex/free.php?stats
Look underneath the "Tag" heading and you'll see the two "tags" we've used - "ezine1" and "ezine2". These tags can be anything you want (without spaces or symbols), and should be meaningful. For each of these two tags you'll see the click count and the number of sales. Obviously there are no sales if you're giving away a free ebook. You can think of the sales count as a "conversion count", in other words the number of people that have been converted. In this case, "Sales" refers to the number of people that have entered their email address into the form to get your free ebook.
Finally, the "Conversion Ratio" is the ratio of unique clicks to sales. For example, if 100 people click on your ad in the first ezine (tagged "ezine1") and 40 of them sign-up to receive your ebook, the conversion ratio will be 40%. Note that raw clicks are not included in the calculation, only unique clicks. A unique click is someone who hasn't clicked on the link before. A raw click is counted every time. So if somebody clicks 10 times they'll count as 10 raw clicks and one unique click.
Let's now examine how the whole thing works, so that you understand what's going on. When somebody clicks on your ezine ad, a cookie is placed on their computer containing the "tag". For example, the following URL will place a cookie with the tag "ezine1":
http://www.yourdomain.com/free.php?ezine1
The click count for "ezine1" is then updated and the user is forwarded to your "Free Ebook" page. If that person enters their email address and proceeds to your "Thank You" page, the cookie is picked up and the sales count (or conversion count) for "ezine1" is updated. By the way, you don't have to specify your "Free Ebook" page as the Destination URL when you create the conversion-tracker script. It can be any page on your website.
You may be thinking that I've forgotten something in this example - how do people actually get the free ebook you're advertising? Well that's up to you. You can either put a link to it on the "freebook.html" page, or if you're using a mailing list (as described earlier) you could send the download location in the welcome email.
A conversion tracker like this is extremely useful in monitoring the quality of traffic you're receiving. High quality traffic consists largely of people that are interested in what you've got. Ultimately, a high volume of traffic is useless if it isn't targeted. Conversion tracking is the only way to discover the bottom line. Don't waste money on advertising that isn't pulling in targeted visitors.
Neil Cahill is a PHP programmer and part of the team at http://www.phpsuccesstools.com. You are free to reproduce this article providing no changes are made to the body text.
Article Source: ArticlesBase.com - How to Measure Conversion Ratios & Traffic Quality