Why Are My Conversion Rates Down?

Conversion rates are one of the main indicators of the success of your paid advertising strategy, so understandably, it can be unsettling when you see a negative trend. But don’t panic! A decrease in conversion rates can be concerning, but it’s important to first understand how account strategy and outside causes impact conversion rates in order to properly evaluate performance and find a solution.

Identify the affected channels & campaigns

Understanding the bigger picture is necessary before moving forward in finding a solution to improve conversion rates. Check Google Analytics to evaluate how your conversion rates compare across all channels. Are conversion rates down only in paid media or across the entire business? Additionally, identify any trends in the campaign types that are affected. Are conversion rates impacted in all campaign types or in select parts of the marketing funnel?

Understanding what impacts conversion rates

Once you identify the affected channels and campaigns, you’re ready to take a deeper dive and decide how to move forward. In your analysis, determine when conversion rates started to decline, and note any changes in clicks and conversion volume period over period.

Common reasons for conversion rate declines include:

Changes in the market or industry: If you’re seeing an impact to conversion rates due to changes in the market or industry, such as changes in distribution or national crises, you’re likely not alone. While each situation is unique, the first step in moving forward is understanding how the changes have affected your business operations, including budgets, inventory and/or sales cycle.

Competition: If you’re seeing a decrease in click volume and impression volume, check your auction insights report for changes in the competitive landscape. Are new competitors emerging in the market? Are existing competitors increasing their impression share? If you answered yes to either question, your conversion rates and conversion volume will be impacted due to your competitors stealing away qualified user traffic.

First of all, It’s very important here to ensure the offer you’re presenting is compelling enough — otherwise your competitors will easily steal away potential customers. If budget allows, increase budgets or bids to increase your impression share and clicks — showing up higher on the page than your competitors may help boost conversion volume. Additionally, revisit your competitor strategy to help increase clicks and combat competition.

Seasonality: It’s common for conversion rates to vary by season, so understanding seasonality trends as it relates to your account is important when evaluating performance and strategy. For example, ecommerce accounts are likely to experience an increase in conversions during the holidays, which will make Q1 conversion rates appear down quarter over quarter. For B2B accounts, it’s common to see conversion rates decline during the summer months. Both situations are examples of expected performance fluctuations and present an opportunity for your client to allocate budgets and shift strategy according to stronger seasonal performance.

Changes to the website or landing page: If clicks are steady but conversions are down, check the landing pages for any changes. Even the slightest change to brand colors, checkout experience, or the location of the lead-gen form can negatively impact conversion rates. Share any findings with stakeholders and recommend reverting back to the legacy landing page or new landing page optimizations.

Campaign strategy: If you recently launched a new prospecting campaign, you’re likely seeing an influx of click traffic to your website. At the same time, it’s not uncommon to see a decline in conversion rates because top of funnel users are not as ready to convert compared to bottom of funnel users. Similarly, if you recently launched new audience or keyword targeting, you may be reaching a set of users who have never heard of your brand and thus need more time before they convert. When reviewing performance, make sure there is understanding from your entire team on how different campaign types perform and impact your overall marketing strategy.

In conclusion

Whether expected or not, there’s a variety of reasons why conversion rates could be down, but understanding the nuances of common impacts is the first step in finding a solution.