CTR (Click-Through Rate): This is the percentage of people who click your ad after seeing it. For example, if your ad was shown 1,000 times (impressions) and 50 people clicked it, the CTR is 5%. CTR = (Clicks / Impressions) × 100%. CTR is a key indicator of how appealing your ad is to the audience. A higher CTR often means your ad copy is resonating and relevant. It’s also crucial in platforms like Google Ads because a high CTR contributes to a better Quality Score and can lower your costs. We track CTR to gauge which ads are performing best and to benchmark against industry averages (for instance, a good CTR on Google Search might be 3-5% or higher, whereas on Facebook a 1% CTR might be more common).

CPC (Cost Per Click): This is the amount you pay for each click on your ad. It can be viewed as the average CPC across clicks. For example, if you spent $100 on 50 clicks, your average CPC is $2. CPC depends on your bids and quality – highly competitive keywords have higher CPCs, but if your quality is excellent, you might pay less than competitors for the same position. We always aim to lower your CPC without losing relevant traffic, through better Quality Scores and smart bidding. Lower CPC means more clicks for your budget. Importantly, note that “CPC” is different from “CPM” (cost per thousand impressions) – PPC search ads are almost always on a CPC model. In summary, CPC is what each visit from the ad costs you. If CPC starts to rise, we investigate if it’s due to increased competition or a drop in Quality Score, and then respond accordingly.

Conversion Rate (CVR): This is the percentage of clicks that result in a conversion (a conversion could be a sale, lead, etc., as defined in tracking). Conversion Rate = (Conversions / Clicks) × 100%. If you got 50 clicks and 5 of them became conversions, CVR is 10%. This metric tells us how effective the landing page and overall funnel is at turning visitors into customers. A low conversion rate might indicate a mismatch between ad promise and landing page, or other issues (site speed, pricing, etc.). We improve CVR by A/B testing landing pages and ensuring high relevance. Often, a small increase in CVR can dramatically improve ROI, since you’re getting more results from the same ad spend.

Cost Per Conversion (CPA or CPL): Often simply called CPA (Cost Per Acquisition) or CPL (Cost Per Lead, if leads are the goal). This is how much it costs, on average, to acquire one conversion. CPA = Total Spend / Conversions. If you spent $500 and got 25 conversions, your average CPA is $20. This is one of the most important metrics for campaign success – it should ideally be lower than the value of the conversion to you. We always set a target CPA based on your profit margins or lead values. For example, if you earn $100 profit on a sale, a CPA of $50 is very profitable, but a CPA of $120 would be losing money. Through optimization, we strive to bring CPA down to or below target. Automated bidding can optimize directly for CPA goals as well.

Quality Score (QS): Specific to Google (and a similar concept of relevancy on Bing), Quality Score is Google’s 1-10 rating of your ad and landing page relevance to the keyword. It encompasses expected CTR, ad relevance, and landing page experience. A higher Quality Score means Google considers your ad highly relevant and useful, and it rewards you with a higher ad rank and lower CPC costs for the same bid. For example, an ad with QS 9 might pay 30% less per click than an ad with QS 5 in the same position. We monitor QS for all keywords and address low scores by refining ads or landing pages. It’s essentially a grade of how well we’re doing in Google’s eyes. While not a KPI for business results, it’s a critical lever in managing cost and rank, so we care about it.

ROAS (Return on Ad Spend): We discussed this earlier – it’s the revenue return for each dollar spent on ads. ROAS = Revenue from PPC / Ad Spend. If you spent $500 and the sales attributed to those ads totaled $2000, your ROAS = 4.0 (or 400%). That means $4 back for every $1 spent. ROAS is especially crucial for e-commerce or direct revenue-generating campaigns. It’s basically the PPC-specific version of ROI. A high ROAS indicates a very effective campaign financially (typically, anything above 3-4x is strong, but benchmarks vary by industry). A low ROAS (below 1x) means losing money on ad spend and calls for significant optimization or reallocation. We aim to maximize ROAS by focusing on high-converting, high-value traffic and eliminating waste. Note: ROAS is related to but not identical to profit; a campaign can have a ROAS above 1 and still not be profitable if margins are slim, so we consider your margins too. Nonetheless, ROAS is our primary metric for revenue-generating campaigns – it tells you bang for your buck in revenue terms.

Impressions and Impression Share: Impressions are how many times your ad was shown. Impression Share is the % of total possible impressions you got (mostly for search). If your impression share on a keyword is 50%, it means you showed in half of the auctions you were eligible for. Lost impression share can be due to budget (your budget ran out) or rank (your ad rank wasn’t high enough). We watch this to see if we should increase bids or budget to capture more opportunities, especially on high-value terms. If you’re losing impression share due to budget on a profitable campaign, that’s a sign to scale up.

Ad Rank and Average Position: Ad Rank is the value that determines your ad’s position (it’s a combination of your bid and quality). While Google no longer reports average position, Bing still might, and Google provides search top impression rate metrics. In general, we want your ads in the top positions where they get the most visibility and clicks. We monitor the percentage of impressions at top of page and absolute top. If your ads rarely hit the top, we may need to adjust bids or quality. However, being #1 isn’t always necessary – sometimes positions 2-3 yield nearly as many conversions at a lower cost. We balance position versus cost carefully.