Making Sense of Advertising Metrics

Wondering if your advertising is truly paying off? How much are you spending on advertising, and what’s your ROI? Tracking your advertising metrics will uncover what’s working and shed light on where to focus your dollars. It’ll also teach you how your audience interacts with your ads. There are countless data points to sift through, but we’re focusing on four essential metrics to make sense of it all.

Here are four key metrics to measure your advertising success:

1. CPA (Cost Per Acquisition)

How much does it cost for you to get a new lead on any given channel? Pinpointing your CPA is crucial for understanding your ad ROI. We recommend that you figure out which specific ad channels fare the best so you can optimize your advertising budget for those channels.

2. LTV (Lifetime Value)

Identifying the lifetime value of your customers give you an idea of the revenue a new customer brings your business. You can then compare your LTV to your CPA.

3. CR (Campaign Revenue)

This is when you determine the total revenue generated by your ad campaign. To do so, multiply your campaign’s conversions by your LTV and closing ratio. Every new lead you generate won’t turn into a customer, which is why you factor in how often you close new leads.

4. ROAS (Return on Advertising Spend)

ROAS tracks the revenue you’ve generated for every dollar you spent on advertising. It measures the effectiveness of your specific campaigns.

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