How to read ad metrics and judge a campaign
Ad reports show dozens of numbers. Most of them come from five raw figures: spend, impressions, clicks, conversions and revenue. Follow these steps to see what is working and what to change.
1. Start with your goal
Pick the one number that matches the goal. For awareness, watch CPM and reach. For traffic, watch CPC and CTR. For sales or leads, watch CPA and ROAS. Judging a sales campaign on CPM alone often leads to cheap but useless impressions.
2. Check the funnel step by step
Impressions turn into clicks (CTR), and clicks turn into conversions (conversion rate). A low CTR points to the ad or the audience. A low conversion rate points to the landing page, the offer or the price.
3. Work out your break-even point
Divide 1 by your profit margin to get the break-even ROAS, and multiply your average order value by your margin to get the most you can pay per sale. Anything above that loses money on the first order.
4. Compare like with like
Compare campaigns over the same dates, with the same attribution window and the same currency. Platforms count conversions differently, so check the numbers against your own sales data.
5. Plan the next budget
Use your real CPM, CTR and conversion rate in the budget planner to see what a larger budget should deliver. Scale slowly: CPM often rises as you reach beyond your best audience.
Checklist
Before you judge a campaign:
- Let it run long enough to collect at least a few dozen conversions.
- Check the frequency: above about 3 to 5 a week, results often drop.
- Test one change at a time: audience, ad or landing page.
- Track revenue, not just conversions, so you can see ROAS.
- Include agency fees and tools in your real cost per sale.