3 Key Metrics For Overall Ad Performance

By Bradley Riley
Paid Social
November 14, 2022

Advertising online, particularly on Facebook and Google, can be a complicated process. With so much information and so many metrics and columns to look at, it can be overwhelming. 

For this reason, we’ve decided to cover 3 key metrics that you’ll want to understand in order to check ad health and the overall performance of the account and website.

CPM - This is the cost of 1,000 Impressions on the ad platform. With Facebook, where you’re paying for impressions on the platform, this is a really useful metric. 

There’s often debate on the importance of this metric as it really can vary from business to business. CPM can tell you so much about your ads and audience selection, which is why we check it as a soft metric in our account overviews. It is true that certain verticals will dictate a large portion of your CPM, with some being far more expensive than others. As a rule of thumb, typically the more crowded the niche, the more of a premium you will be paying in CPM. 

However, CPM is a great way to gauge differences in costs between different audiences and ads. We like to see CPM as an indicator for the content and how relevant it is to the audience that you’re targeting.

Outbound CTR - This is a % measurement of how many people are clicking the link on the ads from the impressions that you are receiving. As a general rule, you will want to be hitting 1% or higher after you’ve got a significant amount of impressions or spent an appropriate amount for the specific business. 

Good CTR can not only increase clicks to the site, which is absolutely key, it can help you develop a creative feedback loop and increase recall lift. 

At this point, I would like to give an honourable mention to Outbound Cost Per Click. The reason I haven’t included it is because Cost Per Click is an indicator of how CPM an CTR are interacting. Focussing on getting a good CPM and a solid CTR is the way to achieve a good CPC. CPC is more of an indicator of those 2 metrics rather than being a metric that I’d say you can influence on its own.

Conversion Rate - In my opinion, this is one of the biggest pitfalls business make - and it may be because the best place to find this number isn’t actually on the ads manager for Google of Facebook, though you can certainly find them on there. The best places to find the most accurate number that you should be following is on the website backend or on Google Analytics. 

This number will give you the most accurate figure to work with because it will include all the traffic that has visited the site.

It’s a big mistake to neglect this factor. There’s no sense in sending paid traffic to a $100 product that has a website conversion rate of 0.10%. You can have a great strategy that is performing well but the truth is that you can’t succeed because you can never get a Cost Per Conversion or Cost Per Outbound Click that is consistently low enough to win overall.

Take these 3 metrics into account the next time you overview and optimise ads moving forward. Breaking it down to these 3 metrics should be the most important steps to informing successful ad campaigns.

Hope this helps!

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