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Conversion occurs when the visitors conducts a transaction (such as buying a product, registering for a newsletter, and so on). In the context of AdWords, conversion is the final step of a successful clickthrough. The conversion rate is the percentage of visitors that complete such a transaction, and is used to judge the effectiveness (and return on investment) of visitors acquired through campaigns such as pay per click . Effective conversion tracking requires web analytics tools which use of some scripting/cookies to track visitors actions within a website.
A general business and advertising term, return on investment measures the profitability of a campaign. Simplified, ROI calculates a formula by which expenses are subtracted from sales to measure revenue gain. As an advertising measurement, ROI is about conversions into sales exceeding advertising expenses.
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