Aug 28 2023
Hope Lowdermilk

Programmatic Advertising 101: Conversion Tracking


In the fast-paced realm of digital advertising, staying ahead of the competition requires more than crafting compelling creative and targeting the right audience: It demands a deep understanding of campaign performance and the ability to derive strategic insights from consumer actions.

But tracking and understanding consumer actions today is far different than it was a few decades ago, as advertisers are dealing with a complex landscape where emerging channels, platforms, and screens muddle traditional conversion paths. Whereas a typical consumer journey used to follow a fairly predictable and linear progression from awareness to consideration to (ideally!) a conversion, that's not always the case in today’s world. Instead of clear stages, consumers are following a cyclical approach where they can jump in and out of stages or skip stages entirely.

At the same time, the rising complexity of digital advertising with shrinking media budgets, and it has become even more important for advertisers to understand what messaging, optimizations, and targeting are driving a desired action, or conversion.

Today, we’re exploring what conversions are, how advertisers can track them utilizing a demand-side platform (DSP), best practices for optimizing a campaign with a conversion-based KPI, and what impact the loss of third-party cookies in Chrome will have on tracking and measuring conversions moving forward. Read on for everything you need to know.

What Is a Conversion?

Imagine this: You’re scrolling through TikTok after a long day at work. Between silly duck videos and mesmerizing cook-along clips, you see one of your favorite creators promoting a skincare product. It’s one you’re familiar with—you remember seeing a different ad for it on YouTube. You click the link in the video, fill out your credit card and shipping information, and voilà! The product will be on your doorstep in a few days.

Sound familiar? This purchase is an example of a conversion.

At its simplest, a conversion is a specific action a user completes on your site. Beyond making a purchase, examples of conversions can include:

  • Creating an account
  • Signing up for a newsletter
  • Navigating to a specific page
  • Adding an item to a shopping cart
  • Taking any other action on a website

Why are Conversions Important?

By tracking conversions, advertisers can evaluate campaign performance and make optimizations based on what is working and what isn’t. And because advertising budgets tend to be finite, advertisers will often measure the success of a conversion campaign by controlling for cost.

Sample KPIs for conversion tracking include:

  • Cost per acquisition (CPA): This KPI tells advertisers how much it cost to acquire a paying customer
  • Return on ad spend (ROAS): This KPI tells advertisers the amount of revenue earned for every dollar spent
  • Cost per landing page view (CPLPV): This KPI tells advertisers how much it cost to drive a user to a specific page

By tracking conversions and evaluating the results against these KPIs, advertisers can gain a deeper understanding of which ads, placements, and targeting tactics are resonating with consumers and driving them to take action.

How Are Conversions Tracked?

To track an action or conversion, an advertiser must employ a conversion pixel. A conversion pixel is a piece of code specific to a platform (i.e., Meta, Pinterest, or Basis) that tracks a specific action based on how it was created or where it was placed. This pixel can then track activity, such as whether a user clicks on or sees an ad.

How Do You Set Up a Conversion Pixel?

While there are nuances based on the platform and/or client, the general process for advertisers to place conversion pixels to track conversions is as follows:

  1. Create pixels in the relevant platform
  2. Place the appropriate code
  3. Conduct quality assurance on the pixel to ensure it is firing and that relevant data is being tracked and stored
  4. Set up a digital campaign and ensure the correct conversion pixels are selected

Once the conversion pixel is set up, it’s ready to do its job of tracking and collecting data around consumer actions. When a customer sees an advertisement and completes the relevant action (aka the conversion), the conversion pixel fires and drops a cookie. This cookie allows the advertiser to identify who the user is and check if they saw or clicked on an ad that was served via the corresponding platform. If a user clicked on an ad and immediately took an action, that counts as a click-through conversion. If a user saw the ad, did not click, but ended up taking an action later on, that counts as a view-through conversion.

Best Practices for Optimizing a Conversion-Based Campaign

Once you've ensured a conversion pixel has been placed and is firing correctly, you can make optimizations based on the results you're seeing. Such optimizations could include the following:

  • If you aren’t seeing the volume of conversions needed, try changing the KPI for your upper funnel tactics (i.e., prospecting, demographic, private marketplace deals) to cost per click or cost per landing page view. This will help drive site traffic and increase the size of your retargeting pool.
  • Pending scale, create audiences based on website activity and customize messaging accordingly.
  • Pull a domain report to see the top performing domains and create a custom “allow” list to further drive performance.
  • Update your contextual segment with top-performing keywords from your search campaigns.

The Future of Conversion Tracking and Cookieless Conversion

As the deprecation of third-party cookies in Chrome approaches, it’s important to note that conversion tracking will be impacted. The most significant change will be that advertisers will not be able to track view-through conversions, as they require a third-party cookie to track a customer’s behavior after they have seen an ad.

However, advertisers will be able to track click-through conversions in a privacy-friendly manner, given the right technology. Universal pixels can track how consumers behave on a website without collecting any of their personal information. Through the use of universal pixels, marketers can track click-through conversions when third-party cookies aren’t supported in a given browser.

Here’s the key takeaway: The absence of third-party cookies will necessitate the adoption of alternative tracking methods, such as first-party data utilization and privacy-compliant technologies, reshaping the landscape of conversion tracking and prompting advertisers to explore new strategies to maintain precision and effectiveness in gauging campaign success.

Next Steps: Conversion Tracking

In the ever-evolving digital advertising landscape, conversion tracking is one way that advertisers can measure the effectiveness of their campaigns, make intentional and data-driven optimizations, and maximize their budgets. As the consumer journey becomes less linear and more complex, understanding precisely what is driving audiences to take action will grow increasingly important.

That said, some aspects of conversion tracking will shift as advertisers prioritize privacy compliance. In light of consumers and regulators alike demanding increased privacy, it’s critical that advertisers adapt the ways they are targeting and measuring their campaigns to meet those demands.


Want even more insights on how to adapt to the cookieless future? Check out Beyond Third-Party Cookies: Your Guide to Privacy-Friendly Advertising to learn how marketers can best prepare for the changes coming to digital advertising

Get the Guide