Top 5 Metrics in Marketing

There's just something about numbers that I find fascinating, and I'm not just talking about dollar signs. Imagine this, you just launched an ad campaign on your Instagram through the "boost post" function and you let it run for a day.

The next day you check on it and you are suddenly bombarded with all of these numbers you don't recognize, except the $ amount spent. Yet, you get no results.

Why is that so? I'm sure there's a way to reverse engineer the data. And we're gonna tell you everything you need to know.

Let's get right into this article starting with..

Metric 1: CPM

CPM, also known as cost per mille, is a measurement of the cost per 1000 impressions. This can be helpful as you will know roughly how much you'll be spending to reach x amount of people.

CPM = The lower, the better.

If your CPMs are high, this can only mean two things.

1. A lot of people are competing for this ad space.

2. Your targeting is too detailed and specific.

The more people bidding for the keyword/adset, the less ad space there is for everyone.

And if your targeting is too specific, the bidding algorithm will require more effort to find your target audience.

How do we calculate the cost per 1000 impressions? Follow this simple formula below.

source: https://popupsmart.com/encyclopedia/cost-per-thousand-impressions-cpm

Metric 2: CPC

CPC simply means cost per click. It's a measurement of how much you've spent on link clicks. There are many ways link clicks can be categorized.

• Unique Link Clicks - the # of times a user clicks on your campaign link

• Outbound Link Clicks - the # of times the link brings a user away from the main site

• Clicks (All) - the combination number of all link clicks.

Metric 3: CTR

CTR stands for click-through rate. The click-through rate is a percentage of users who clicked on your call to action link divided by the number of total impressions, then times 100 to get a percentage.

source: https://cxl.com/wp-content/uploads/2017/07/pasted-image-0-18.jpg

This is useful for judging how good your copy was at converting users, so much as they would be intrigued enough to click on your link.

Metric 4: CPA

Now, this, in my opinion, is the most important metric of all. CPA, also known as cost per acquisition, is a measurement of how much you've spent to acquire a sale or lead.

The CPA is calculated based on the cost of the campaign, divided by the number of acquisitions you have.

Metric 5: ROAS

Ahh, ROAS. I almost named my son that. The return on ad-spend is calculated based on the revenue generated, divided by the cost of the campaign.

source: https://images.ctfassets.net/i8bfc4nr05rq/7fs8adBdIhGEQc6PHdthnu/f5d6a2b88818b936f982ab5491b530a1/How_to_calculate_ROAS.png

In marketing, you'll always want to maintain a positive ROAS. Having a positive ROAS translates into being profitable.

source: https://www.appsflyer.com/wp-content/uploads/2021/09/7183-ROI-vs-ROAS-Formula-6-1.png

Anything above a 1 (or 100%) is a positive ROAS and anything below 1 is a negative ROAS.

Closing thoughts

It's okay to geek out a little even if you aren't a numbers person. Being able to understand these 5 metrics will not only make you a better marketer but also teach you to be more analytical at everything else because, well, numbers are everywhere.

I hope you enjoyed this thread and took something out of it, and until next time, happy marketing