Marketing effectiveness goes beyond simply tracking sales. It covers a range of metrics that provide a comprehensive picture of how well your marketing initiatives achieve their goals.

In this article, we'll delve into key marketing performance metrics, exploring how they provide valuable insight into the performance of your campaigns and help your business make informed decisions for growth.

CPM

Cost Per Mille / Cost per thousand impressions is the cost of an advertising impression, calculated for each thousand impressions.

CPM helps to estimate how expensive it is to reach your audience through an advertising campaign. With the help of CPM, you can compare the effectiveness of advertising channels and determine where it is better to invest your budget to reach a larger audience for less. CPM helps calculate the total budget for an advertising campaign, considering the cost per thousand views and the goal of achieving a certain number of views.

By determining CPM, you can evaluate the effectiveness of ad creative. If the CPM is high, it may indicate that the ad is not performing well, and you may need to change or optimize the creative.

CPC

Cost per Click / Cost per click is the cost of advertising display, calculated for each click on the advertisement.

CPC helps you understand how much money is spent on each click, making it easier to budget and make informed marketing decisions. You can determine the total customer acquisition cost by calculating CPC and conversion rate. This is important for evaluating the profitability of marketing efforts. If the CPC is high, it may indicate ineffective advertising or a competitive market. Advertisers can look for ways to optimize their campaigns to lower their cost per click.

CTR

Click-Through Rate / Percentage of clickability is the percentage of clicks on an advertisement from the total number of impressions.

CTR indicates how effectively your ad or content captures the attention of your target audience and prompts action, usually clicks. CTR allows you to track the effectiveness of advertising campaigns and content over time and make changes to improve results. You can compare different ads, banners, or content using CTR to see which one gets more clicks. CTR also helps to determine how well the target audience meets your expectations and whether this audience leads to conversions and sales.

CPA

Cost per Action / Cost per action is the cost of an advertising display, calculated for each action the user performs (for example, a purchase or filling out a form).

CPA allows you to determine the exact cost of achieving a specific conversion or action, such as a purchase, form fill, or signup, which is important for measuring performance. With the help of a CPA, you can optimize advertising campaigns and invest budgets in sources with the lowest conversion rate. CPA allows you to determine how profitable each conversion is by comparing the acquisition cost with the earnings from conversions.

CPL/LAC

Cost per Lead / Lead Acquisition Cost / Cost per potential client / Cost of attracting a potential client is the cost of an advertising display, calculated for each received potential client.

LAC indicates how much money a company spends on attracting each potential customer. This information helps plan the budget for marketing and advertising, allowing companies to focus resources on the most effective channels for attracting leads. By comparing the LAC with the customers' Lifetime Value (LTV), the company can determine whether the engaged leads generate enough profit during their lifetime as customers. This contributes to a deeper understanding of the value of business leads.

CPQL/LAQL

Cost per Qualified Lead / Lead Acquisition Qualified Lead / Cost per qualified potential client / Cost of attracting a qualified potential client is the cost of an advertising display calculated for each received qualified potential client.

CPQL helps distinguish between regular and qualified leads, giving you a deeper understanding of which leads are truly interested in your product or service. Working with qualified leads can help increase conversions and reduce the time it takes to convert a lead into a customer. The metric helps to separate untargeted leads, reducing the cost of those who are not qualified and focusing on the target audience.

LTP

Lead to Pay is the ratio between the number of leads that move to the payment stage and the total number of leads involved in the sales funnel.

LTP allows you to accurately measure how effectively leads are converted into paying customers. Understanding how many leads convert to payment helps you determine how profitable it is to attract those leads and adjust your acquisition strategy. LTP analysis can indicate which marketing campaigns or channels attract the best payers, allowing you to reallocate your budget for optimal results.

QLTP

Qualified lead to pay is the ratio between the number of qualified leads moving to the payment stage and the total number of qualified leads involved in the sales funnel.

QLTP allows you to track the conversion of leads that have been filtered and recognized as high-quality, which helps you assess how effectively leads are being processed.

By building on quality leads, companies can focus their efforts and resources on processing leads with a high potential to become paying customers. Understanding QLTP metrics helps increase revenue, as more quality leads result in more payments and purchases.

CAC

Customer Acquisition Cost is the cost of attracting a new customer to the company.

CAC allows businesses to accurately measure the cost of acquiring a new customer, which is key to managing financial resources. The determination of CAC can be used against the Lifetime Value (LTV) of customers to understand how quickly a business can generate revenue from new customers and whether it is profitable.

LTV

Lifetime Value is an estimate of the total profitability of the customer for the company during its life cycle.

LTV allows you to predict how much revenue customers will generate throughout their life cycle, helping to determine customers' profitability individually and as a whole. Understanding how a long customer life cycle affects profits can indicate the need to invest in customer retention programs. A higher LTV can indicate quality customers that translate into revenue over a longer period.

ROAS

Return on Advertising Spend / Profitability of advertising costs is the ratio between the income received from advertising and its costs.

ROAS helps determine how effectively ad campaigns generate revenue for ad spend and whether the advertiser is making more money than it spends on advertising. Metrics allow you to compare the profitability of different advertising channels and choose the ones that work best for your business.

ROMI

Return on Marketing Investment / Profitability of marketing investments is the ratio between the profit received from marketing investments and the total costs of marketing activities.

ROMI allows you to measure how effectively your marketing spend leads to profit, which helps you understand whether your marketing investment is profitable. ROMI provides a framework for making informed decisions about marketing investments and strategies to increase profits.

Metrics in Meta ads

Frequency of impressions

Most specialists and projects in campaign analytics pay attention to the cost of a click and targeted action. However, the advertising cabinet provides more metrics that somehow affect these indicators. One such metric is impression frequency.

What it consists of:

• Showings – how many times the ads were shown.
• Coverage – the number of unique users who saw the ad.
• Frequency = Impressions / Reach is the average number of impressions per user. A frequency of 2 does not mean that all users saw the ad 2 times: some were shown 3 times, and some - 1.

Why frequency is essential:

• Banner blindness. The higher the frequency, the less likely people are to click on the ad.
• Irritation. If you break into a user's feed or stories with the same advertisement, you can cause negative emotions and, as a result, receive a complaint about the advertisement.

How often should creatives be changed?

There is no correct answer to this question. If the frequency is 3, and the ads are still actively converting to clicks, applications or sales, let it roll on.

What shall I do?

1. The wider the audience, the less likely you will have to change creatives.
2. Consider the budget. If you spend thousands a day, then reaching an audience of 10 thousand users will clearly not be enough.
3. Exclude those who interacted with IG and FB, site, etc. This audience will go to retargeting. And for retargeting, I highly recommend developing other communication.

Therefore, in order not to lose the effectiveness of advertising and to manage the frequency of display, it is important to quickly respond to its growth, choose the right audience size, and do competent retargeting.

CTR в рекламі

CTR in advertising The average CTR at which an ad is considered successful is usually 1% or higher. In this case, you can say that you have correctly selected the audience, offer, placements, etc. If the click-through rate is lower, the audience's advertisement has not entered, and it must be reworked. ⠀ But it doesn't always work that way. As with CPC, the normal value of the click-through rate can vary depending on various factors: niche, awareness, competition, specificity, etc. Therefore, in each specific situation, the average indicator can be its own, and even within the same niche.

For example, 2-3% CTR can be considered a good value for selling clothes, 1% for furniture, and 0.4% for a narrow direction, such as accounting services for business owners. And this does not mean a bad result.

Why?

It is necessary to look at the picture in general, in particular, to estimate how much one ice or sale is worth.

I have more than one project that shows excellent results with a CTR of 0.4-0.7%. In some cases, ads with a CTR of 0.4% give higher and, sometimes most importantly, cheaper conversions. The client has appeals, sales, and the costs of advertising and services of our agency are paid off in full. ⠀ If you see that the CTR is decreasing but other indicators are normal, you can test new theses, the location of the text, and the creatives themselves. It happens that just changing the color of the text increases the conversion.

There are a million options for how and what to test. But in my consultations, I see that many people do not use them for some reason, limiting themselves to a couple or three layouts. And not get any results from them, they immediately give up.

How long does it take to test an ad in Meta?

I am sure that everyone has had a situation when they launched an ad, the click is expensive, and there are no conversions at all. There is one desire to turn off and reconfigure. But take your time, now we will understand why.

How the algorithm works:

1. An ad group collects data from users who have previously taken the desired action. For example, click, conversion, etc.
2. The algorithm compares the characteristics of the users who performed the action and looks for patterns. It is at this time that the system is in the learning phase.
3. From the collected data, the algorithm looks for people as similar as possible to those who performed the target action. After that, the price decreases, and the number of clicks or leads increases.

During the campaign launch, the algorithm does not yet know to whom to show advertising and takes a wide segment of the audience. Therefore, the price in the first days, as a rule, jumps and is very different from what it will be after optimization.

Do not touch the ad campaign immediately after launch. The algorithm needs time to adjust to conversion CA. The term of training depends on many factors, it can happen both in a few days and 2-3 weeks.

It is important to evaluate the settings, texts, creatives, and landing page.

Be sure to monitor the situation online. If your selling price is $5, and at the start it is $10, wait and do not change anything. If one creative brings in $7 in sales, and the second brings in $3, turn off the first. But not immediately - at least a few days after the launch of the advertising campaign, so that the creatives get coverage.

Sales performance indicators

• Conversion from lead to payment (for each manager separately and general for the department)
• Deal cycle
• Average check
• LTV
• Number of applications processed per day
• Number of calls
• Average time in line
• Total time in line for each manager

Also, it is important for the head of the department to understand the following indicators, which will help to understand the capabilities of the department:

• the efficiency of each manager – who can take how many leads per day and how many tasks per day to process so that efficiency and conversion are not lost);
• with normal time waiting forline (on-hold time) is the total time the customer spends waiting. Usually measured in seconds or minutes before a salesperson or automated system answers his call;
• the number of interactions before the sale;
• average time of conversation with the client;
• the number of missed calls.

The main indicators of the effectiveness of advertising campaigns in Google Ads

• conversions
• conversions rate
• conversions cost

For an online store with established e-commerce:

• total revenue and return on advertising investment
• rejection rate
• average interaction time

Secondary indicators:

• CTR
• average cost per click
• percentage of impressions received

Key performance indicators in the context of customer service

• Profitability: indicates how profitable your business is. It is measured as a percentage and calculated as the profit-to-total revenue ratio.
• Customer Satisfaction: A higher level of customer satisfaction often indicates an improved company image and increased loyalty.
• NPS (Net Promoter Score): NPS measures your customers' willingness to recommend your company to others. A higher NPS indicates greater loyalty.
• Lead Time: If your business can solve problems or fulfill orders quickly, this can positively affect efficiency.
• Inventory Levels: Reducing excess inventory helps optimize costs.
• Churn Rate: Controlling churn is important to maintaining a customer base.

Customer support includes providing quality customer assistance and can significantly increase customer satisfaction. Certainly, NPS can be a useful tool for measuring post-support loyalty. From our experience, advertising on the Meta platform and in the Google search engine on the Ukrainian market takes the largest share of the budget and traffic, but there are still many unused and undervalued channels for attracting customers. They do not have convenient advertising offices, and managers who help with settings, but the right marketing communication in them allows you to diversify the risks of increasing the value of the lead in the main channels. These are channels such as:

• influencer marketing,
• affiliate,
• promotion in organic search results (SEO),
• outreach,
• emails, chatbots,
• publications in media resources,
• building referral networks and much more.

Calculating performance indicators for these channels is much more difficult than in META, but it is necessary. I will give an example from our experience: we built an auto-funnel for a client based on email marketing, but everything rested on a maximum open rate of 18%, we tested many hypotheses, different titles, gifts, promotional codes, etc. Of course, if the conversion to opening is so low, then there were almost 0 customers from this channel. Finally, we decided to test the last hypothesis and leave this channel, we made a festive three-series mailing to the entire base with a lead magnet, which was given when subscribing to the chatbot. We got about 20% of the base into chatbot subscriptions, and there, the open rate was already 87%. Thus, an almost dead channel was made very effective.

It was also often seen that publications in the media gave thousands of percent ROMI and worked for more than one month. Such a channel as SEO is quite difficult to analyze in terms of performance indicators, but with proper optimization in the search engine, this channel gives the largest amount of traffic. Here, it is necessary to analyze comprehensively with other channels. For example, advertising on brand awareness in Meta can increase the number of brand inquiries in organic, and where should the customer who comes from this traffic be recorded?

At Profit.Store, we develop analytical systems for comprehensive analysis of all marketing activities. Thanks to this, our customers can see all the listed above indicators for each traffic channel or any activity within, which allows them to invest money efficiently and not worry about the number or cost of leads.

Conclusion

By focusing on these metrics, businesses can optimize their strategies, allocate resources more efficiently, build stronger connections with their target audiences, and ultimately increase sales.