How does conversion-based optimization work in advertising?

In advertising, conversion-based optimization focuses on getting the highest possible return for every ad dollar spent by prioritizing campaigns, creatives, and audiences that influence real action. In this process, you Set up detailed conversion tracking (Facebook Pixel, Google Ads conversions, etc.). Run split tests across ad visuals, headlines, and calls to action. Segment audiences to find the pockets that convert best. Using automatic bidding strategies like Maximize Conversions in ad platforms. The goal is to let performance data dictate where budget flows and refine ads to zero in on what moves users down the funnel.