Conversion is the ratio between the number of referred visitors and the percentage of them that proceed to the desired transaction. There are several ratios used in denoting conversion. The best known are CTR (Click Through Rate) and eCPC (Effective Costs per Click).
Conversion is very important in affiliate marketing (CPS) and lead generation (CPL). After all, the publisher only receives commission if a transaction takes place on an advertiser's website. If an advertiser's website has poor conversion rates, then a visitor who is redirected by a publisher generates less revenue. Therefore, publishers will only promote advertisers who, in their opinion, convert well enough.