As a marketer, you’re probably staring at a ton of metrics every day, trying to figure out what really matters and what doesn’t.
You’re optimising constantly—sometimes every day. So which metrics should you prioritise? When should you pull the plug on a campaign that’s not performing well?
With so many numbers coming at you, it can get overwhelming fast.
When it comes to paid media and business success, a few KPIs stand out and give you the insights you need. Let’s break down the ones that truly make a difference, without overcomplicating things.
5 KPIs to Measure Paid Media Success
Click-Through Rate (CTR)
CTR is basically your ad's way of getting noticed. It’s the first point of contact. When people click, it shows you’ve managed to catch their attention—whether it’s your message, visuals, or the offer itself. But if your CTR is low, it might mean your ad is getting overlooked.
And that’s not a good sign. In this case, you might want to try changing your headlines, trying different visuals, or experimenting with different messaging to see what makes people click.
And, no, it’s not just about getting clicks for the sake of it—this metric can also give you insight into your audience’s intent.
Experimenting with ad copy that taps into pain points or curiosity tends to drive better CTR. Headlines that ask a question or imply a solution—without giving everything away—often encourage clicks.
Something as simple as “Struggling with X? Here’s What You’re Missing” can make a huge difference.
Cost Per Click (CPC)
You’re not just paying for clicks—you need to pay for the right clicks. High CPCs can quickly drain your budget, but it’s not always about lowering it.
A higher CPC might be worth it if those clicks are converting. So, if you see your CPC creeping up, ask yourself: are you attracting quality clicks that lead to actual sales or leads?
Conversion Rate (CVR)
Yes, high CTR is great, but if those clicks aren’t turning into conversions, something’s off.
CVR shows you how many of those potential customers actually take the next step, whether it’s buying a product or filling out a form.
Tracking CVR at different stages of your funnel can help you spot where people are dropping off—maybe the offer isn't enticing enough, or there’s some friction in the user experience.
For example, if your conversion rate is low early on, it could mean prospects need more time or information before they’re ready to buy. Take a look at your historical data to set realistic goals and get a clearer view of how people move through the funnel. That way, you can set KPIs that actually make sense for your business.
Return on Ad Spend (ROAS)
ROAS tells you whether your ad spend is really paying off. It shows how much revenue you’re pulling in for every dollar you spend on ads.
If your ROAS is looking good, it means your ads are doing their job and bringing in solid returns. But if it’s lower than what you’d hoped, it’s a sign that your marketing strategy needs to be revisited.
Now, you must be wondering, what is the right ROAS goal?
When it comes to setting a ROAS goal, there’s no one-size-fits-all answer. It depends on your business model, margins, and industry. A common benchmark is aiming for at least a 3:1 ratio, meaning for every $1 spent, you make $3. But if you’ve got higher margins, you might be comfortable with a lower ROAS and still hit your profitability targets.
Make sure your expectations are realistic. Look at historical data and consider factors like your AOV and CLV. It’s tempting to aim for the moon, but setting attainable goals based on data will give you a better understanding of what’s working and what’s not.
Sometimes, even a “lower” ROAS can be okay if you’re focused on long-term customer growth rather than immediate profits.
Cost Per Acquisition (CPA)
CPA is one of those metrics that you need to keep track of because it shows how much you’re actually spending to land a customer.
If your CPA is low, great! You’re acquiring customers without burning through your budget. But if it’s on the high side, it might mean there’s some friction in your funnel—whether it’s from your targeting, your ad creatives, or even your website experience.
So, what’s a “good” CPA?
A good rule of thumb when setting your CPA goal is to aim for a CPA that’s about 30-40% of your AOV. This way, you’re leaving enough room for profitability after factoring in other costs like fulfillment and overhead.
Let’s say your AOV is $100. Based on the 30-40% rule, you’d want your CPA to fall between $30 and $40.
So, if you’re spending $35 to acquire a customer, that’s 35% of your AOV, which gives you enough cushion to cover fulfillment, shipping, and other overhead costs while still keeping a decent profit margin.
Now, if your CPA is higher—say $60—that’s 60% of your AOV, which starts to cut into your profit. In this case, you’d need to either increase your AOV (upsells, bundles, etc.) or figure out where you can reduce your acquisition costs, whether it’s through better targeting, optimizing your ads, or improving your conversion rate.
If you’re looking at CLV, you must be willing to spend a little more on acquisition—sometimes even up to 100% of your first purchase value—if you know your customers may come back and make multiple purchases over time.
For subscription-based or high-repeat-purchase businesses, it’s common to allow a CPA that matches or even exceeds AOV, banking on the long-term value of the customer.
5 KPIs to Measure Business Success
Customer Lifetime Value (CLV)
We all love getting new customers, but keeping them is where the real value is. CLV measures how much revenue a customer brings over the course of their relationship with your business.
If you’re focusing too much on acquiring new customers and not enough on retaining existing ones, your CLV might not be where it should be.
Remember: a long-term customer is worth far more than a one-time buyer.
Customer Acquisition Cost (CAC)
CAC gives you a full view of what it really costs to acquire a new customer. It’s like CPA but goes beyond just ad spend—it factors in everything, from marketing expenses to sales efforts. Essentially, it’s the total cost of turning a prospect into a paying customer.
If your CAC is high, it could be a sign that your approach is a little off balance, and you’re spending too much to bring new customers through the door.
If your CAC is higher than you'd like, try focusing on your existing customers instead. Increasing customer retention and getting repeat purchases is usually much cheaper than acquiring new customers.
Building loyalty through things like special offers or better follow-up after someone makes a purchase can help lower your overall CAC. When customers are purchasing repeatedly, they become more beneficial to your business, and you don’t have to spend as much trying to win over new ones.
Churn Rate
Churn rate shows how many customers are leaving your business over a given period. If your churn rate is high, it could mean something’s not working—maybe the product isn’t meeting expectations, or the overall customer experience needs improving.
The goal is to keep this number as low as possible because losing customers faster than you’re gaining them isn’t a good place to be.
In a crowded market, churn is almost unavoidable. Customers have plenty of choices, so if they aren’t getting what they need from your business, they’ll look elsewhere. Hence why it’s important to offer something they can’t easily find with your competitors.
Whether it’s a better customer experience, more value, or even personalized offers, giving customers a reason to stay with you is key to reducing churn.
Return On Investment (ROI)
ROI tells you how much you’re getting back for what you’ve invested. Whether it’s a marketing campaign, product development, or even an expansion effort, ROI measures how effective that investment is.
You want to make sure that for every dollar you put in, you’re getting more than a dollar back in return. Sounds simple, right? But the reality is that hitting a solid ROI isn’t always as easy as it seems.
So, what’s a good ROI to aim for? Ideally, you want an ROI that’s well above 1:1, meaning you’re earning more than you spend.
A common goal is to shoot for a 3:1 ratio—so for every $1 you invest, you’re getting $3 back. Of course, this can vary depending on your business and industry, but the key is ensuring that the returns justify the costs.
Keep in mind, ROI isn’t just about the immediate return. Don’t forget to look at long-term value as well.
For example, if you're investing in customer acquisition, a lower short-term ROI might be okay if you know those customers will continue to bring in revenue over time.
Always think beyond the immediate numbers to make sure you’re setting yourself up for sustainable growth.
Payback Period
The payback period tells you how long it takes to recover the money you’ve spent acquiring a customer. As a business-level KPI, it gives you important insights into whether you should ramp up your efforts, improve efficiency, or reassess profitability.
A shorter payback period means you’re getting your money back faster, which opens the door for more aggressive growth. On the flip side, a longer payback period could signal that you need to fine-tune your acquisition strategies or lower costs.
To calculate this, you’ll want to compare your Customer Acquisition Cost (CAC) with your Lifetime Value (LTV). If your LTV is higher than your CAC, you’ll eventually recoup those costs over time. Understanding this balance, both overall and within specific channels, helps you plan your efforts and aim for long-term profitability.
Final Words
At the end of the day, when it comes to tracking success, it’s about knowing which KPIs to focus on and when.
Paid media KPIs give you a quick snapshot of how your campaigns are doing, while business KPIs help you see the bigger picture of your company’s overall health.
These metrics work together, and keeping an eye on both ensures you’re moving in the right direction.
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.
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