CPC, CPL, ROAS: how to read your ad metrics
What the abbreviations in your ad account mean and which numbers actually matter for your business, in plain language.
Your ad account shows dozens of metrics. You do not need to watch them all, but you should understand these five.
CPM: cost per 1,000 impressions
How expensive it is to reach your audience. A high CPM points to an audience that is too narrow or heavy competition.
CTR: click-through rate
How interesting the ad is. The first indicator of creative and offer quality.
CPC: cost per click
The result of CPM and CTR. When CTR rises, CPC usually falls.
CPL: cost per lead
The clearest number for a business: what one potential customer cost you. Compare it with your average order value and margin.
ROAS: return on ad spend
How much revenue each $1 of spend brought back. ROAS = revenue ÷ ad spend. Spend $500, sell $2,500, and your ROAS is 5x.
Which one to watch?
Cheap clicks and likes are not the goal. The real question is what a customer costs and how much they bring in. That is why my reports lead with CPL and ROAS, and use the other metrics to find causes.