e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain manageme ...

, the conversion funnel is the journey a consumer takes through an Internet advertising or search system, navigating an e-commerce website, and finally making a purchase. The consumer is seen as being "converted" from a visitor to the site to a buyer. A

funnel A funnel is a tube or pipe that is wide at the top and narrow at the bottom, used for guiding liquid or powder into a small opening. Funnels are usually made of stainless steel, aluminium, glass, or plastic. The material used in its construct ...

describes the progressive reduction in the number of users at each stage of the process. Advertising efforts can be aimed at "upper funnel", "middle funnel", or "lower funnel" potential customers. Typically a large number of customers search for a product/service or register as

page view In web analytics and website management, a pageview or page view, abbreviated in business to PV and occasionally called page impression, is a request to load a single HTML file ( web page) of an Internet site. On the World Wide Web, a page request ...

on a

referring page In HTTP, "" (a misspelling of Referrer) is an optional HTTP header field that identifies the address of the web page (i.e., the URI or IRI), from which the resource has been requested. By checking the referrer, the server providing the new web ...

which is linked to the e-commerce site by a

banner ad A web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking ...

ad network An online advertising network or ad network is a company that connects advertisers to websites that want to host advertisements. The key function of an ad network is an aggregation of ad supply from publishers and matching it with advertiser's d ...

or conventional link. Only a small proportion of those seeing the advertisement or link actually click the link. The metric used to describe this ratio is the

click-through rate Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is commonly used to measure the success of an online advertising campaign for a particular we ...

(CTR) and represents the top level of the funnel. Typical banner and advertising click-through rates are 0.02% in late 2010 and have decreased over the past three years. Click-through rates are highly sensitive to small changes such as link text, link size, link position and many others and these effects interact cumulatively. The process of understanding which creative material brings the highest click-through rate is known as ad optimization. Once the link is clicked and the visitor to the referring page enters the e-commerce site itself, only a small proportion of visitors typically proceed to the product pages, creating further constriction of the metaphorical funnel. Each step the visitor takes further reduces the number of visitors, typically by 30%–80% per page. Adding the product to the shopping cart, registering or filling in contact details and payment all further reduce the numbers step-by-step cumulatively along the funnel. The more steps, the fewer visitors get through to becoming paying customers. For this reason, sites with similar pricing and products can have hugely different

conversion rate In electronic commerce, conversion marketing is marketing with the intention of increasing ''conversions—''that is, site visitors who are paying customers. Measures Conversion marketing attempts to solve low online conversions through opti ...

s of visitors to customers and therefore greatly differing profits.

References

{{reflist Web analytics

See also

References