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In other words, what I am trying to understand is how do people estimate their conversion on targeted traffic they buy on AdWords, etc?
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A typical affiliate program can be used for this purpose, with the owner acting like his own affiliate. For each campaign a different affiliate account can be used, though affiliate tracking software does usually allow campaign tracking too.
I believe that Google Analytics had a convertion tracking system too, that can be used to find out which source of traffic brings what amount of sales.
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So how do you get that conversion percentage? Do you just guess it?
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You never really know until you
test it.