Digital Advertising Metrics You Should Probably Track

Running online ad campaigns, especially on platforms like Facebook and Instagram, can be tricky without the right tools. One of the most important tools? Metrics. These numbers tell you what’s working and what’s not, allowing you to make smarter decisions. But with so many metrics available, it’s easy to get lost.

In this article, we’ll break down the key metrics you should track to get the best results for your advertising budget.

1. Return on Ad Spend (ROAS)

What is it?

Return on Ad Spend (ROAS) tells you how much revenue you make for every dollar you spend on ads. It’s a clear way to measure the profitability of your campaigns.

Why it matters:

If your ROAS is high, it means your ads are working and bringing in good returns. But if it's low, you’re likely wasting money on ads that aren’t bringing in enough sales.

Example:

Let’s say you spent $500 on ads and made $2,000 in sales. To calculate your ROAS, divide $2,000 by $500, giving you a ROAS of 4:1. This means for every $1 you spent, you made $4 in return.

How to improve ROAS:

• Target the right audience: Use Facebook’s and Instagram’s robust targeting features to ensure your ads reach people who are most likely to convert.

• Test different ad creatives: Experiment with various visuals, headlines, and offers to see what performs best.

• Optimize landing pages: Ensure your landing pages align with the ad’s message and provide a seamless user experience.

Improving your ROAS can be done with consistent testing and optimization of your campaigns. By focusing on targeting, creative quality, and a seamless post-click experience, you can significantly improve your ad performance.

If you're interested in exploring more about improving targeting, you can check out the Ultimate Guide to Facebook Lookalike Audiences, which can help you refine your audience selection.

2. Cost per Acquisition (CPA)

What is it?

Cost per Acquisition (CPA) shows you how much it costs to get a customer through your ads. This is useful for understanding if your ad spend aligns with your business goals.

Why it matters:

Tracking CPA helps you determine whether you’re paying too much to gain a customer. If your CPA is too high, you might need to optimize your campaigns or adjust your target audience.

Example:

If you spent $1,000 on ads and gained 100 customers, your CPA would be $10 ($1,000 ÷ 100). If you’re selling a product for $50, and your CPA is higher than $50, you’re losing money on each sale.

How to lower CPA:

• Refine audience targeting: Narrow your audience to focus on people more likely to convert, reducing wasted spend.

• Use lookalike audiences: Leverage Facebook’s lookalike audience feature to target people similar to your best customers.

• A/B test ads: Test different ad versions to find which one brings the most conversions at the lowest cost.

Lowering your CPA is essential for ensuring that your ad campaigns are cost-efficient. By honing in on the right audiences and testing ad creatives, you can maximize your spend efficiency.

Learn more about the importance of Facebook Attribution for optimizing ROAS and CPA.

3. Click-Through Rate (CTR)

What is it?

Click-Through Rate (CTR) measures how often people click your ad after seeing it. A higher CTR means your ad is engaging and relevant to your audience.

Why it matters:

A low CTR means your ad isn’t catching people’s attention. This could be because your ad isn’t appealing, or it’s reaching the wrong audience.

Example:

If your ad gets 500 clicks and 50,000 impressions, your CTR is 1% (500 ÷ 50,000 × 100). A CTR of 1% is average, but aiming for higher CTRs can indicate stronger engagement with your audience.

How to improve CTR:

• Compelling ad copy: Write clear, action-oriented copy that tells users exactly what to do and why.

• Eye-catching visuals: Use high-quality, engaging images or videos that stand out in users’ feeds.

• Strong CTA: Ensure your ad includes a clear call-to-action, like “Shop Now” or “Learn More,” prompting users to click.

Improving CTR requires that your ad not only reaches the right people but also captures their attention. It’s important to test different versions and analyze which elements — whether it’s the creative or copy — are driving the most clicks.

If you notice a drop in CTR, consider reading Why Your Facebook Ads CTR Dropped and How to Fix It for insights on improving performance.

4. Conversion Rate

What is it?

Conversion Rate tracks the percentage of people who take a specific action after clicking on your ad, like making a purchase, signing up, or downloading something.

Why it matters:

Even if your CTR is high, a low conversion rate suggests that your landing page or offer isn’t appealing enough. Tracking this metric helps you see if your ad leads to desired actions.

Example:

If 50 out of 1,000 people who click on your ad end up purchasing, your conversion rate is 5% (50 ÷ 1,000 × 100). A 5% conversion rate is strong, but if yours is lower, consider adjusting your landing page design or simplifying the checkout process.

How to improve conversion rate:

• Optimize landing pages: Make sure your landing page matches the message in the ad. If your ad promises a discount, the landing page should immediately highlight that offer.

• Simplify the conversion process: Reduce the number of steps needed to convert, whether it's completing a purchase, signing up, or downloading.

• Use social proof: Include testimonials, reviews, or ratings on your landing page to build trust with visitors.

Your conversion rate can often be improved through optimization of the user experience from click to conversion. By ensuring that your landing page is streamlined and directly aligned with the ad’s message, you increase the likelihood of turning traffic into sales.

5. Lead Quality vs. Lead Quantity

What is it?

This metric focuses on evaluating the quality of the leads you're generating versus the sheer number of leads. While many advertisers focus on increasing lead volume, it’s critical to track whether the leads are high-quality and likely to convert into customers.

Why it matters:

Generating a large number of leads can be exciting, but if these leads aren’t likely to convert, you're wasting your advertising budget. Tracking lead quality helps ensure your campaigns are driving valuable prospects, not just numbers.

How to measure it:

• Lead scoring: Use a scoring system to assess the quality of each lead based on specific criteria (e.g., engagement level, readiness to purchase).

• Customer feedback: Track how well your leads perform in terms of conversions, and adjust your targeting criteria accordingly.

• Lead-to-sale conversion rate: Compare the number of leads generated to the number of actual sales made.

By focusing on lead quality, you can reduce your cost per acquisition (CPA) and increase your overall return on investment (ROI).

6. Customer Lifetime Value (CLV)

What is it?

Customer Lifetime Value (CLV) is the total revenue you can expect from a customer over the course of their relationship with your business. This metric helps you understand the long-term value of acquiring a customer.

Why it matters:

CLV helps you determine how much you can afford to spend on acquiring new customers. If your CLV is high, you can justify spending more on ads and targeting more expensive segments to grow your customer base.

Example:

If the average customer spends $100 per month with your business and stays with you for 12 months, their CLV is $1,200. This means you could spend up to $1,200 to acquire that customer while still maintaining profitability.

How to improve CLV:

• Retention strategies: Focus on keeping your customers engaged with loyalty programs, personalized offers, and exceptional customer service.

• Upsell and cross-sell: Encourage repeat business by offering related products or services to existing customers.

• Email marketing: Use targeted campaigns to nurture existing customers and increase their lifetime value.

For a deeper dive into CLV, consider reading Why You Should Pair ROAS With Customer Lifetime Value (LTV).

7. Engagement Rate (ER)

What is it?

Engagement Rate measures the level of interaction your audience has with your ad content. This includes likes, comments, shares, and other forms of engagement.

Why it matters:

A high engagement rate indicates that your audience finds your content interesting and valuable, which often translates to a higher likelihood of conversions. Engagement can also improve your ad’s visibility due to how social media algorithms prioritize content with higher engagement.

How to calculate it:

ER is calculated by dividing the total number of engagements (likes, comments, shares, etc.) by the total number of impressions, and then multiplying by 100 to get a percentage.

How to boost engagement:

• Create interactive content: Polls, quizzes, or calls for comments can encourage users to interact with your ads.

• Use compelling visuals and videos: Dynamic and visually appealing content tends to attract more interaction.

• Ask questions: Invite your audience to comment by asking thought-provoking questions related to your product or service.