A Beginner’s Guide to Ad Metrics
You launched your ads. The budget is running. The clicks are coming in. But here’s the big question: Are your ads actually working?
If you’re new to paid media, navigating the world of ad metrics can be confusing. Terms like CTR, CPC, and ROAS get thrown around, but what do they really mean—and which ones should you pay attention to?
At Root Company, we help businesses not only run better campaigns but also understand what success actually looks like. This beginner-friendly guide breaks down the key metrics that matter and how to evaluate your ad performance with clarity and confidence.
First, Define “Working”
Before diving into the data, ask yourself: What is this ad trying to do?
Your ad goal might be to:
- Drive website traffic
- Generate leads
- Sell a product
- Increase brand awareness
- Get event signups
- Grow your email list
Once you know the goal, you can align the right metrics to measure it.
Key Ad Metrics You Should Know
Here are the core metrics you’ll see across most platforms (Google Ads, Meta Ads, LinkedIn, etc.)—and what they tell you.
1. Impressions
What it means: How many times your ad was shown.
What it tells you: Reach and exposure.
If your impressions are low, it may be a sign that your budget, targeting, or bid strategy needs adjustment.
2. Click-Through Rate (CTR)
What it means: The percentage of people who saw your ad and clicked.
Formula: (Clicks ÷ Impressions) × 100
What it tells you: How engaging your ad is.
Good CTR benchmarks:
- Google Search Ads: 3%+
- Display or Social Ads: 0.5–1%+
If your CTR is low, your ad might not be relevant, or your creative may need improvement.
3. Cost Per Click (CPC)
What it means: How much you’re paying for each click.
What it tells you: Efficiency of your traffic acquisition.
High CPCs may be okay if your traffic converts. If not, they could signal poor targeting, high competition, or low ad quality.
4. Conversions
What it means: The number of desired actions taken (form fills, purchases, calls, etc.).
What it tells you: Whether your ads are leading to actual results.
Make sure you’re tracking meaningful conversions, not just page views.
5. Conversion Rate
What it means: The percentage of clicks that resulted in a conversion.
Formula: (Conversions ÷ Clicks) × 100
What it tells you: How well your landing page or offer is performing.
If you’re getting a lot of clicks but no conversions, the issue is likely after the click—on your website, form, or checkout flow.
6. Cost Per Conversion (CPA or CPL)
What it means: How much you paid for each lead or sale.
What it tells you: The cost-efficiency of your campaign.
Compare this number to your average customer value or lead value to see if you’re getting a solid return.
7. Return on Ad Spend (ROAS)
What it means: How much revenue you made for every dollar spent on ads.
Formula: Revenue ÷ Ad Spend
What it tells you: Profitability.
Example: If you spend $1,000 on ads and earn $4,000 in sales, your ROAS is 4.0 (or 400%).
8. Frequency (for Social Ads)
What it means: The average number of times each person saw your ad.
What it tells you: Ad fatigue risk.
A frequency above 3–5 may lead to diminishing returns. It’s time to refresh your creative or adjust targeting.
How to Review Your Ads Like a Pro
Here’s a simple 3-step process for evaluating performance:
- Check alignment with your objective. Are you tracking the right goal for your campaign?
- Look for balance. Good CTR with low conversions? High impressions with no clicks? Each piece of the funnel tells part of the story.
- Track trends over time. Don’t rely on a single day’s results. Look at 7–30 day windows for patterns.
Not Sure What Your Metrics Are Telling You?
Knowing whether your ads are “working” starts with clarity—on your goals, your metrics, and your audience. Once you understand the numbers, you can make smarter decisions, optimize your campaigns, and stop wasting budget on ads that don’t deliver.
At Root Company, we help businesses take the guesswork out of digital advertising. Whether you’re running your first campaign or scaling up, we make sure your ads are built on strategy—and backed by data.
We offer free ad account audits that break down what’s working, what’s not, and where to go next.
Book your free strategy call now »