AdWords Cost per Conversion is not always Cost/Conversion

If your AdWords account contains multiple campaigns which also includes mobile targeted campaigns, then you might notice that your reported cost per conversion is different from the expected cost per conversion.

Rest assured, this is not a discrepancy or a mathematical error by Google. There is, in fact, a very simple explanation for this, as given below.

In the above screenshot, we can see the following stats:

Cost: $86,464.81
Conversions (1-per-click): 432
Cost per conversion: $188.31

On calculating the cost per conversion as per the usual formula i.e.
cost per conversion = cost/conversion = $86,464.81/432 = $200.15

Now, our cost per conversion ($200.15) doesn’t match the reported cost per conversion ($188.31). On contacting our AdWords representative, we came to know about some new information which is explained below.

Cost per conversion does not always translate into cost divided by conversion. Calculating cost per conversion is slightly more than simple division because not all clicks and their associated click cost are eligible for conversion tracking reporting. As a result, the numbers you see in the interface might be varied than the ones that you would get by dividing the cost column by the conversion column.

A situation in which the cost/conversion is deviating from what you expected could happen in the case where the campaign(s) in question are targeting mobile devices as well. There are many low end mobile devices that do not accept cookies. Which means that the clicks and the associated click cost will not be included in the conversion rate and the cost per conversion metrics. This happens because in the devices that do not support cookies, the JavaScript that tracks your conversions (for example on the thank you page) does not load, hence these conversions can’t be tracked and are not included in the calculation of these metrics.

So let’s look at the all time numbers with this in mind again

Reported Total Cost: $86,464.81
Reported 1-Per-Click Conversions: 432
Reported Cost/Conversion: $188.31
Expected Cost/Conversion: $200.15

Ineligible clicks (from many mobile devices – not counted in the conversions – doesn’t mean that they are invalid or malicious) are not included in the cost for this calculation. So as per the reported statistics

$188.31 * 432 = $81,349.92

This means that $81,349.92 came from eligible clicks for this account that are counted in the conversions and the remaining $5114.89 came from ineligible clicks, most likely from conversions performed on mobile devices.

Since the cost per conversion is a very important aspect of every ad campaign, it is important to ensure that one is not missing anything. Also, it is advisable to keep some room for possible (and unavoidable) errors. Since there is no immediate solution, it is best to have a margin for such situations.

Can you think of a solution to this? Let us know your thoughts in the comments below!

Happy Advertising!