Conversion: Because so much of online advertising relies on tracking progress, the term conversion applies to the completion of a business goal. Most often, conversions deal with sales; in other words, when a website with an online shop sees an internet user make a purchase, this is considered a conversion.
Conversion rates are calculated when a business is able to see how many times it has reached a particular goal. A common calculation could be the number of sales a website sees divided by the website's total number of visitors. (Most often, the number of visitors is gathered from unique hits, usually by IP address.)
Other transactions between customer and business can also count as a conversion, such as participation in online customer service chats, filling out customer feedback forms, or taking advantage of promotional offers. A call to action on a website, such as getting consumers to fill out information for a free insurance quote, is also a measurable conversion.
Online marketers can use conversion rates as another way to report on a client's advertising goals. Businesses can also use this method to track the popularity of their websites' services. Using the example of an insurance company again, that type of business may compile a conversion report to see how many users take advantage of their quote service vs. other services, such as a support chat or a visit to a social media page.