AI-based eCommerce Conversion Rate Optimization (CRO)

In the digital advertisement, eCommerce Conversion Rate Optimization (CRO) refers to activities and systems used for increasing the percentage of visitors to a website that converts into customers or takes a desired action on a webpage. eCommerce conversion rate optimization seeks to increase the percentage of website visitors that take a specific action by methodically testing alternate versions of activity and electing those activities that tend to deliver the highest number of conversions for a given cost. In doing so, businesses can generate more leads or sales without investing more money on website traffic, hence increasing their Return on Advertising Spend and overall profitability.


A conversion rate is defined as the percentage of visitors who complete a goal, as set by the site owner. Some test methods, such as split testing or A/B testing, enable monitoring which copies and creative drives better conversion of visitors into customers.


There are several approaches to eCommerce conversion optimization with two main schools of thought prevailing in the last few years. One is more focused on testing to discover the best way to increase website, campaign, or landing page Conversion Rates. The other is focused on the pretesting stage of the optimization process. In this second approach, the optimization will include significant investment in understanding the audience and then creating a targeted message that appeals to that particular audience. Only then would it be willing to deploy testing mechanisms to increase conversion rates. 


The reason is naturally the wish to minimize spend on testing and increase spend on bringing potential customers to your website through organic advertising using technology or eCommerce automated advertising.


Amazon is a great example of a company that is doing it right. Research by Marketingsherpa shows that Amazon’s “targeted” approach where offers are targeted and recommended to users based on factors like interest and site activity converted significantly better, resulting in over 200% increase in conversion rates over other methods. 


It is the understanding of successful strategies like Amazon’s and recent developments in AI-based Natural Language Processing that opens the door now towards new methods for automating even the production of the “targeted” Ads and consequently the creation of well-targeted campaigns that will minimize the testing costs when executing the actual eCommerce Conversion Rate Optimization processes, be it A/B testing on the Ads, or the website landing pages.


Probably the most important reason for the success comes from the fact that improving Ads creativity is optimizing for human behavior and mimicking such behaviors is exactly where AI marketing automation and Machine Learning come into play. Web design, copywriting and analytics interpretation are key for CRO since many changes are either to Ad design or Ad copy. As well, the ability to understand analytics will give ideas on where in the conversion funnel, CRO changes will have an impact, and once made, how impactful were the changes on the conversion goals.


All of these considerations lead to a growing understanding that AI marketing automation and Machine Learning are key eCommerce marketing automation solutions for advertising using technology and are capable of monitoring all of these evidence points from Analytics.


Related readings

MarketingSherpa: Marketing 101: What is CRO (Conversion Rate Optimization)?

Wikipedia: Conversion rate optimization

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