Money & metrics · also called downstream conversion, post-click conversion
Advertiser conversion
An advertiser conversion is the valuable action, such as a sale or lead, completed on the advertiser's own site after someone clicked their ad on a search feed.
Follow one click to the very end of the chain. A visitor reads an article, clicks a related search, clicks an insurer's ad and arrives on the insurer's site. If they request a quote, that is an advertiser conversion. It happens two steps beyond the arbitrageur's page, where the arbitrageur has no visibility.
It is nonetheless the foundation of the whole business. Advertisers report conversions to Google or Microsoft through their own tracking. The search engine then knows, site by site, which partners send buyers and which send browsers. Good conversion performance keeps bids and RPC high. Poor performance leads to smart pricing discounts, lower automated bids, placement exclusion by individual advertisers and, at worst, questions from the feed.
This is the core of the industry's contested reputation. Critics argue that arbitrage clicks convert poorly and waste advertisers' budgets. Operators reply that well-matched traffic performs. The data sits with the search engines, which increasingly share site-level reports with advertisers. For an operator the practical rule is plain: buy the kind of visitor an advertiser would have wanted to pay for.
Think of it like this
A taxi driver is paid for dropping tourists at a restaurant. If the tourists never order, the restaurant stops paying that driver.
Related terms
Conversion
A conversion is a visitor completing the action a campaign was built to achieve, such as a purchase, a sign-up or a click on a paying ad.
Conversion rate (CVR)
Conversion rate is the percentage of visitors or clicks that go on to complete a desired action, such as a purchase, sign-up or enquiry.
Smart pricing
Smart pricing is Google's system for automatically lowering what an advertiser pays for a click on a partner site when that click is less likely to lead to a sale.
Traffic quality score
A traffic quality score is a rating of how genuine and commercially valuable a publisher's visitors are, used to decide what their clicks are paid, or whether to keep them.
Placement exclusion
A placement exclusion is an advertiser's instruction that its ads must not appear on a named website, app or category of sites.
Fake conversion
A fake conversion is a reported sale, sign-up or other goal that did not really happen or was not made by a genuine customer.
Sources: Google AdSense Help: About bidding on AdSense (smart pricing), Google Ads Help: Search partners network (SPN) announcements