What does the conversion rate measure in advertising?

The conversion rate is a key performance indicator in advertising that specifically measures the effectiveness of an ad in converting visitors into customers or leads. It is calculated by taking the number of desired actions (such as purchases, sign-ups, or downloads) and dividing it by the total number of visitors to the ad or landing page, often expressed as a percentage. This metric is vital for advertisers as it not only reflects how well an ad is performing but also provides insights into the audience's response to the ad's content and call-to-action.

By focusing on actions taken relative to visits, advertisers can optimize their campaigns, targeting, and creative content to improve conversion outcomes. This understanding helps in adjusting tactics to drive higher conversions based on the data gathered.

The other options do not accurately capture what the conversion rate measures. Total clicks on an ad refers to interactions but does not account for whether those clicks lead to a desired outcome. Average impressions per campaign indicate reach rather than effectiveness in achieving actions. Audience engagement levels may refer to likes, shares, or comments, but again, they do not measure the actual conversions that result from visits.