If you’re running an ad campaign through social media or paid search, it’s good to know which metrics are most important for results monitoring. Not only can tracking metrics help you evaluate individual ad performance, but they can also help you stay on target with your campaign’s key performance indicators (KPIs). Let’s dive into the eight top paid advertising metrics to track!
Impressions refer to the number of times your ad was displayed to a user, such as when your ad pops up in paid search results. One advantage of tracking impressions is learning how often a user views your ad before interacting with the ad content. If impressions are high but engagement is low, it may be time to evaluate your ad copy, audience targeting, or relevancy score so that you can revise your ad and make it more effective in reaching your audience.
Reach refers to the number of unique users who have seen your ad. Tracking this metric can help you assess brand awareness, particularly with social media advertising campaigns. Take note of followers and non-followers who are sharing, replying, or liking your content on social media to determine audiences you’re already reaching and identify audiences to target in future ads.
Clicks measure the number of times your ad was clicked on, in most cases leading the user to a website landing page. With pay-per-click (PPC) ads, you only pay when someone clicks on your ad—not when your ad is simply displayed. A low number of clicks can indicate that your ads aren’t driving your audience to take action, which means you may need to reevaluate your quality score.
Click-through rate (CTR) is a percentage of how many times your ad was clicked on out of the total times it was displayed. By tracking this metric, you’ll learn what works and what doesn’t work for your audience. If you have a high CTR, users likely find your ad relevant. Conversely, a low CTR may indicate your ad is not engaging or not reaching the most relevant audience.
Conversion rate is a percentage of users who completed a desired action. These actions will vary depending on your KPIs, but can include website visits, purchases, subscriptions, clicks to call, and more. Compare your ad’s conversion rate against its CTR to discover how often users are completing desired actions. If your conversion rate is low but your CTR is high, it may be useful to adjust your paid ad strategy.
Cost Per Acquisition
Cost Per Acquisition (CPA) refers to the total amount it costs to get a user from the beginning to the end of the sales funnel. This is a crucial metric for measuring digital advertising effectiveness, as it is denotes the success and financial impact of an ad campaign. While CPA is similar to Cost Per Conversion (CPC), it takes a broader approach by measuring the total costs associated with acquiring a new customer rather than the cost of one specific ad campaign.
Return on Ad Spend & Return on Investment
Return on Ad Spend (ROAS) and Return on Investment (ROI) are similar—which is why we’ve grouped them together here—but they monitor slightly different results. ROAS measures how much gross revenue a single campaign has generated compared to its expenses, while ROI accounts takes it a step further by accounting for the cost of investment and campaign expenses to provide insight into the overall net profit of paid advertising efforts. These metrics can help you see whether it’s profitable to continue investing in a campaign or change course. Comparing these metrics against one another is also beneficial. For instance, a low ROI paired with a high ROAS might present a need to look into ways to reduce campaign costs.
Customer Lifetime Value
Customer Lifetime Value (CLV) refers to the profit value a customer brings in over the course of their relationship with your brand. CLV is essential for determining if the cost of acquiring new customers leads to a reasonable ROI. You want to aim for a high CLV, as this means customers are more loyal to your brand. Not to mention, it costs less to retain existing customers than to acquire new ones. A low CLV might suggest a need to build better relationships with your customer base.