Conversions

Conversions

Not all events are equally important. Naturally, it is valuable to analyse complete sales funnel to understand possible reasons for drop-off at each stage and finding ways to improve engagement. But obviously from advertising perspective the only event that matters is the one which means a visitor or a lead was converted into a paying customer.

That's why conversions are a separate category, a subset of events. It is a way of saying this event is special. This is also why conversion events should carry more data than other events. Every additional data-point means analytical or advertising platforms have more chances in guessing who was the person that converted and how to find more similar visitors.

Enhanced Conversions

As cookies are being affected by privacy regulations and tools they are no longer a single, reliable way of identifying a user. Without identifiers tracking a conversion tells merely that somebody purchased something, but there is no way of telling if that person came from paid ad or not. As a result the advertising platform cannot use that information to optimize how ads are served.

In order to prevent those issues technologies such as Enhanced Conversions (from Google Ads) and Advanced Matching (from Facebook) were introduced. They allow online businesses to send personal information in a privacy-friendly way to improve chances of linking conversion to a specific person.

Privacy is protected thanks to using hashing solution. Hashing is a non-reversible way of transforming a human-readable text like email address into something that looks like random string. The key thing is that the same input text always generates precisely the same output hash.

It is like a human fingerprint (be aware that "fingerprinting" is a separate tracking technique, but related to hashing in this context). The same person always leaves the same fingerprint marks, so you can tell that it was the same person who touched multiple object, but you cannot directly tell who that person was just based on the finger prints. You can tell that only if you already have that fingerprint in a database.

That's exactly how enhanced conversions or advanced matching works. Advertising platforms have extensive databases of personal information so when a conversion comes in with those hashes they can compare them with their own records. Then match to individual people and adjust how campaigns are served.