Formula
Conversion rate = attributed orders ÷ ad clicks × 100
Break-even conversion rate = CPC ÷ contribution before ads per order
Worked example
A search term has 30 clicks and 6 attributed orders. Its observed conversion rate is 20%. Another has 5 clicks and 1 order: also 20%, but based on much less evidence. Equal observed percentages do not mean equally reliable estimates of what will happen next.
Suppose contribution before advertising is $12 per order and CPC is $1.20. The break-even conversion rate is 10%: one $12 contribution must cover ten $1.20 clicks. An observed 20% rate is above that line, but a short run of results can still be noisy. Recent clicks may also have orders that have not yet appeared in the report.
Why it matters for profit
Conversion rate connects the price of traffic to what a sale can contribute. A term can convert less often and still cover advertising if clicks are cheaper or product contribution is higher. Judge observed orders against the economic threshold and the amount of evidence, rather than applying one universal click cutoff.
Check the exact metric definition before dividing: orders, purchases, units and sessions are not interchangeable. Seller Central’s unit-session percentage uses a different denominator from ad clicks. Use matching attributed-order and click data for these tools, and allow recent results to mature before interpreting a low rate as a reason to stop traffic.
Check it on your numbers
Use When to Negate and Harvest Readiness.