Conversion Rate Optimization (CRO): What It Is and Why It Matters

In the realm of internet traffic management, optimization plays a crucial role, especially when it comes to Conversion Rate Optimization (CRO). In this article, we delve into what CRO entails and why it's essential for arbitrageurs, media buyers, and webmasters.

What is CRO (Conversion Rate Optimization)?

CRO, or Conversion Rate Optimization, refers to a set of actions aimed at increasing the number of desired actions taken by the audience (conversions) without acquiring additional traffic volumes.

The consequence and goal of conversion optimization are to increase profits while minimizing advertising expenses.

How CRO Works: A Simple Example

To understand the principle of conversion optimization, let's break it down with a straightforward example.

The goal of a landing page utilized by an arbitrageur or any advertiser is to prompt specific actions from the audience. These actions could include filling out a contact form, adding items to a cart, registering on a website, making a deposit, clicking on a phone number on the site, and so forth.

To promote a particular offer, a webmaster launches advertisements across various traffic sources. To determine the effectiveness of this advertising, they need to calculate the Conversion Rate (CR). For instance, out of 500 visitors to the landing page, only 17 completed the desired action, resulting in a CR of (17/500) * 100% = 3.4%.

At some point, to improve the conversion rate and profit, actions need to be taken to optimize variables in the marketing funnel. In this scenario, there are only two solutions:

1. Increase traffic volume by purchasing more ads, thereby increasing the budget.
2. Conduct conversion rate optimization on the landing page.

It's worth noting that the first option doesn't guarantee an increase in the conversion rate in proportion to the increase in traffic volumes.

With CRO, the conversion rate increases through improvements in usability, design elements, landing page load speed, and other factors related specifically to the target page. In other words, the main goal is not to increase traffic volumes but to maximize conversions with the same advertising budget and target audience size.

Why Conversion Rate Optimization Matters for Arbitrageurs

In the affiliate marketing industry, the primary metric characterizing the effectiveness of arbitrageurs, media buyers, or webmasters is Return on Investment (ROI). To increase this metric, it's easier to enhance conversions rather than increase traffic volumes and the associated costs. There are numerous cases online demonstrating that even changing the color of a single button with a call-to-action (CTA) can increase the CR by tens or even hundreds of percentage points.

However, it's essential to note that optimizing the conversion rate should not be an end in itself. For example, when working with an offer that pays $120 and has a conversion rate of 5%, a webmaster will earn significantly more than promoting a product with a 50% CR but a $10 payout.

Thus, CRO allows arbitrageurs to utilize all resources to their maximum advantage without solely focusing on quantitative factors but rather concentrating efforts on quality.

Getting Started with Conversion Rate Optimization

Before implementing changes to the structure and elements of a landing/pre-landing page or WebView/PWA application, it's crucial not to ignore several preparatory stages:

1. Clearly define specific goals in terms of figures and key metrics, limited by time.
2. Conduct a comprehensive analysis of the vertical, geography, target audience, competitors, and their marketing approaches and combinations.

This way, the webmaster can understand which variables require immediate attention when working with the landing/pre-landing page and develop relevant hypotheses. If analytical systems like Google Analytics, Search Console, and others are connected to the landing page, it's essential to study all available sales funnel data at this stage, including heatmaps and other behavioral audience factors.

1. Create several hypotheses to understand how comfortable users find it to interact with the landing page, the persuasiveness of the information displayed, the main trigger and deterrent elements, etc. Creating hypotheses: the main goal is to understand what makes it easier for users to interact with your site, what encourages them to make a purchase, and what repels them. For example, this could involve optimizing the landing page's first screen, textual content, contact forms, etc.
2. Conduct split tests. This stage allows the webmaster or media buyer to understand which of their hypotheses produces the best result with the same expenses.

Key Testing Algorithms for CRO

There are numerous testing variations aimed at optimizing the conversion rate, but let's briefly examine the main algorithms.

1. Testing Pages with Radically Different Approaches
2. The first testing algorithm involves comparing the number of conversions on two radically different pre-landing/landing pages promoting the same offer with identical creatives and budgets.

This allows the webmaster to determine which approach is better perceived by the target audience and which more frequently converts visitors' visits into conversions.

1. Testing Mobile and Desktop Versions
2. The target page may display differently on various devices. Often, low conversion rates can be attributed to "broken" layouts or other technical nuances such as loading speed.
3. Testing Landing Page Load Speed
4. Another crucial factor to test during conversion rate optimization is the page loading speed. Numerous marketing studies show that modern internet users are unwilling to wait for a page to load fully for more than 3 seconds. If the landing page is overloaded with unnecessary scripts and resource-intensive, unoptimized elements, it's likely that some visitors with slower connections will simply close the tab.

Several services exist for determining a site's loading speed, with Google's PageSpeed Insights being the optimal and free option.

1. Testing Content on Structurally Similar Pages
2. The essence of this test lies in comparing conversion results between two identical landing pages with one differing element. For example, the color of a call-to-action (CTA) button and its absence on the order button can significantly impact the CR.

This rule applies to any other variables on the landing page.

1. Testing Different Prices
2. Endless tests can be conducted without observing changes in the CR and without realizing that the main barrier to target action for the target audience is the offer's price.

For this reason, it's essential not to ignore tests of various price options if the offer's terms allow it. However, there's a flip side – lowering the price too much may lead to a perception of low quality, resulting in the termination of partnerships with advertisers.

1. Engaging Focus Groups and Conducting Surveys
2. This method might be considered grassroots, but it doesn't make it any less effective. Before conducting final testing on focus groups, it's crucial to select 2-3 landing page variants using the methods mentioned above.

Moreover, specialized platforms can be used to conduct user surveys regarding the strengths and weaknesses of the target page.

Ineffective CRO Methods

Using the listed CRO methods, it's important for arbitrageurs, targeting specialists, or other advertisers to remember that subjective assumptions, intuition, and actions of competitors are not effective optimization methods. Blindly copying competitors' methods is highly questionable.

Similarly, an approach based on making changes to the landing page solely based on the opinions of designers and other specialists without experience in traffic and audience engagement demonstrates low effectiveness. While their input can be valuable, the final decision should be made by the media buyer or arbitrageur responsible for budget allocation and lead generation.

Conclusion

Amid increasing competition among advertisers and rising ad costs on popular platforms, CRO in traffic management is an indispensable tool capable of increasing conversions and ROI with lower or the same expenses. It also makes it easier and more profitable to scale existing advertising campaigns and combinations.