Advertising KPIs help you monitor and measure your marketing efforts. Without them, it’s hard to know if your ad campaigns have paid off.
Lots of key performance indicators are used in PPC advertising, so deciding which ones to use can be overwhelming. Understanding how KPIs relate to your advertising goal can help you choose the appropriate metrics, so we’ve categorised them into four buyer journey stages:
Choosing the right KPIs is just the start. You also need to optimise your ads and ensure your traffic is valid. Bots and fake users can easily skew your KPI results. This can lead you to make decisions based on bad data, ultimately impacting your revenue. It’s estimated that businesses will lose $100bn to ad fraud in 2023:
In these advertising KPI tables, you’ll learn all the most important KPIs, what they mean, and how you can optimise them to maximise your revenue. The table format makes it easy to compare and find the right KPI for your campaign.
Here are all the major advertising KPIs your marketing team needs to know.
Awareness stage metrics help you assess the success of digital marketing campaigns that expose your brand to new potential customers.
|KPI||Definition||How to Calculate|
|Reach and Impressions||The number of people who have seen an ad (reach) and the number of times the ad has been displayed (impressions)||N/A|
|Click-through rate||The percentage of people who click on an ad||(Clicks ÷ impressions) x 100 = CTR %|
|Ad frequency||The number of times an ad is displayed to an individual||Impressions ÷ reach = ad frequency|
|Ad recall||The ability of viewers to recall an ad||N/A|
|Brand awareness||The level of familiarity and recognition of a brand among its target audience||N/A|
|Share of voice||The brand’s visibility in the market compared to competitors||(Company-specific mentions ÷ total mentions) x 100 = share of voice|
Reach and Impressions
Reach and impressions both measure ad visibility:
- Reach — the number of people who see your ads
- Impressions — the number of times your ad is displayed.
Whether you track reach, impressions, or both depends on your goal. If you’re aiming to get your ad in front of more unique users, reach is a more valuable metric. But impressions may be more useful for increasing overall brand awareness.
Click-through rate (CTR) is the percentage of people who click on your ad. Use this formula to calculate CTR:
(Clicks ÷ impressions) x 100 = CTR %
For example, if your ad has 50 clicks and 1,000 impressions, your CTR is 5%.
CTR can tell you a lot about the effectiveness of your ad. Benchmark it against:
- The CTR for your industry
- Your historical data
- The same ads running on different platforms
- Different ads with the same goal.
Use this data to optimise your ads, so you’re always running the most effective paid advertising campaigns.
Bots will click on ads regardless of quality. A high CTR with substantial bot traffic may mean you’re reaching fewer genuine users. Learn how Lunio can help you stop bots skewing your marketing analytics.
Ad frequency refers to the average number of times your ad is shown to each person.
Impressions ÷ reach = ad frequency
If your ad has 1,000 impressions and a reach of 500, your ad frequency is 2. Each person sees the ad twice on average.
Showing ads too often can be annoying for users. It creates a negative association with your brand and wastes your ad budget. But displaying ads too infrequently can minimise your results. Experiment with frequency capping and ad rotation to find the optimal ad frequency.
Ad recall is the ability of viewers to remember your ad. Asking viewers what they can remember about your ad is the most accurate way to measure this. Some platforms offer an ad recall estimate based on user behaviour and polling.
Brand awareness measures the recognition of a brand among its target audience. It’s hard to quantify, but it can be assessed through surveys, analytics, social media monitoring, and brand recall tests.
Share of Voice
Share of voice tracks your brand’s visibility in a given market compared with your competitors.
To calculate share of voice, first define the marketplace (usually social media mentions or news coverage). You can then measure the coverage you and your competitors have within that space.
(Company-specific mentions ÷ total mentions) x 100 = share of voice
Use this to build a good PR or social media strategy.
Consideration stage KPIs assess your ad campaign’s effectiveness for converting customers from casual visitors to potential customers.
|KPIs||Definition||How to Calculate|
|Engagement rate||The level of interaction between viewers and ads||(Total engagements ÷ total impressions) x 100 = engagement rate|
|Video views||The number of people who have watched a video ad and for how long||N/A|
|Cost per engagement||The cost of each user engagement with your ad||Total campaign cost ÷ total number of engagements = cost per engagement|
|Landing page conversion rate||The percentage of people who visit a landing page and take the desired action||(Number of conversions ÷ total landing page visitors) x 100 = landing page conversion rate|
|Search lift||The increase in search volume for a brand or product following a campaign||(Difference between search volumes ÷ pre-campaign search volume) x 100 = search lift|
|Store visits||The number of people who visit a physical store after seeing an ad||N/A|
Engagement rate measures the level of interaction between viewers and ads. Decide which metric you’ll use to define engagement (often likes, comments, shares, and/or clicks). Then apply this formula:
(Total engagements ÷ total impressions) x 100 = engagement rate
Creating more shareable, entertaining, and relevant ad content can improve your engagement rate.
Video views tell you how many people have watched your video ad. A view is counted when it meets the platform requirement:
- YouTube: 30 seconds (or the entire ad if less than 30 seconds)
- TikTok: immediate
- Instagram: 3 seconds
- Facebook: 3 seconds.
Make sure your video piques the viewer’s interest in the first few seconds. Use a thumbnail that will attract attention.
Cost per Engagement (CPE)
Cost per engagement gauges the cost of each click, like, comment, or share your ad receives.
Total campaign cost ÷ total number of engagements = cost per engagement
If your campaign cost £1,000 and you received 2,000 engagements, your cost per engagement is 50p. High value actions like clicks and shares may cost more than likes.
Landing Page Conversion Rate
Landing page conversion rate measures the percentage of people who visit a landing page and take the desired action, such as submitting a form or making a purchase.
(Number of conversions ÷ total landing page visitors) x 100 = landing page conversion rate
If your landing page conversion rate is low, make sure your messaging resonates with your target audience. Eliminate UX barriers and A/B test landing pages to get the best results.
Search lift tracks the increase in search volume for your product after a marketing campaign. This helps advertisers understand how your digital marketing strategy has affected product or brand demand.
Find the difference between your pre- and post-campaign search volumes, then apply this formula:
(Difference between search volumes ÷ pre-campaign search volume) x 100 = search lift
For example, if there were 1,000 searches for your product before your campaign, and 2,000 searches during or afterwards, your search lift is 100%.
The store visits metric evaluates how effectively your digital ads drive foot traffic to physical stores.
Google Analytics no longer displays store visits, so you’ll have to monitor this externally. Track the number of store visits and compare this with your ad campaign reach.
Generating sales and revenue is the ultimate marketing goal. Use these marketing KPIs to monitor the success of your procurement campaigns.
|KPIs||Definition||How to calculate|
|Cost per acquisition||The cost of each conversion||Campaign spend ÷ number of conversions = CPA|
|Return on ad spend||The revenue generated by ads relative to the cost of the ads||(Campaign-generated revenue ÷ total ad spend) x 100 = ROAS %|
|Conversion rate||The percentage of people who take a desired action after seeing an ad||(Conversions ÷ ad impressions) x 100 = conversion rate|
|Customer acquisition cost||The cost of acquiring a new customer||Campaign cost ÷ number of customers acquired = CAC|
|Cost-per-click||The cost of each click on an ad||Campaign cost ÷ number of clicks = CPC|
Cost per Acquisition (CPA)
Cost per acquisition (also known as cost per conversion) measures how much you spend to generate each lead or customer.
Campaign spend ÷ number of conversions = CPA
If you spend £1,000 on a campaign and generate 350 new sales, your CPA is £2.86.
Optimising CPA helps you get more from your marketing budget. Ensure you’re targeting the right audience with relevant, compelling messaging. Remove invalid traffic to make sure you’re not wasting your ad spend on users who won’t convert.
Return on Ad Spend (ROAS)
Return on ad spend gauges how much revenue your ads have generated. It’s usually expressed as a ratio or percentage.
(Campaign-generated revenue ÷ total ad spend) x 100 = ROAS %
For example, if your campaign cost £1,000 and generated £5,000 in sales, your ROAS is 500%, or 5:1.
ROAS helps you monitor your return on investment. Retargeting is useful for improving ROAS, as it’s relatively inexpensive and keeps your brand top of mind.
Your conversion rate tells you how many people take the desired action after seeing an ad. It’s often used for monitoring customer conversion. But you can also use it to monitor sales qualified leads and other conversions.
(Conversions ÷ ad impressions) x 100 = conversion rate
If your ad receives 500 impressions and generates 20 unique purchases, your conversion rate is 4%.
If your conversion rate is low or starts to dip, find out where buyers are dropping off and take steps to address this.
Customer Acquisition Cost (CAC)
Customer acquisition cost is similar to CPA. But while CPA can refer to any type of conversion, CAC only measures the cost of acquiring a paying customer.
Here’s the formula:
Campaign cost ÷ number of customers acquired = CAC
Measuring CAC can help you allocate resources to maximise customer acquisition.
Cost per Click (CPC)
CPC is the average spend for each click on your ad. It helps you monitor the efficiency of your search and social media marketing PPC campaigns.
Campaign cost ÷ number of clicks = CPC
Monitoring keywords, adding negative keywords, and using bid strategies can help optimise your CPC.
Retaining customers is usually cheaper than finding new ones. Use these metrics to monitor and maximise customer retention.
|KPIs||Definition||How to calculate|
|Customer retention rate||The percentage of customers who return to make additional purchases||(Repeat customers ÷ total customers) x 100 = customer retention rate|
|Churn rate||The rate at which customers stop doing business with a company||(Customers lost ÷ total customers) x 100 = churn rate|
|Repeat purchase rate||The percentage of customers who make more than one purchase||(Customers making >1 purchase ÷ total customers) x 100 = repeat purchase rate|
|Net promoter score||A metric that measures customer loyalty and satisfaction||% of promoters – % of detractors = NPS|
|Customer satisfaction||A metric that evaluates customer satisfaction with a specific purchase or experience||N/A|
|Customer effort score||A metric that measures the ease of doing business with a company||N/A|
Customer Retention Rate
Customer retention rate measures the percentage of customers that return to make another purchase.
(Repeat customers ÷ total customers) x 100 = customer retention rate
For example, if your business has 200 customers and 20 of them make another purchase, your customer retention rate is 10%.
Monitoring customer retention can help you improve customer lifetime value. Remarketing campaigns can boost your retention rate.
Churn rate refers to the percentage of customers who stop buying from a business.
(Customers lost ÷ total customers) x 100 = churn rate
Factor in timeframes when calculating churn. Measure the number of customers lost within a set period and compare it to the number of customers you had at the start of this period. Otherwise any new customers during this time will skew your results.
Repeat Purchase Rate
Repeat purchase rate tracks the percentage of customers who make more than one purchase.
(Customers making >1 purchase ÷ total customers) x 100 = repeat purchase rate
A high repeat purchase rate indicates strong customer satisfaction. Improving your repeat purchase rate can increase customer lifetime value and reduce churn.
Net Promoter Score (NPS)
Net promoter score (NPS) is a customer loyalty metric. To find out your NPS, ask your customers to rate how likely they are to recommend your products or services on a scale of one to ten. You can then categorise your customers as:
- Promoters (score 9-10)
- Passives (score 7-8)
- Detractors (score 0-6).
% of promoters – % of detractors = NPS
For example, let’s say you poll 1,000 customers. 120 customers are detractors (12%) and 300 are promoters (30%). Your NPS is 18%.
Customer Satisfaction (CSAT)
CSAT evaluates customer satisfaction with a specific purchase or experience. CSAT surveys are usually sent after a specific interaction, such as a customer service call. The survey results can help you identify areas for improvement and track customer satisfaction over time.
Customer Effort Score (CES)
Customer effort score measures how easy customers find it to do business with your brand.
Ask your customers to rate the level of effort required to complete a specific task, like making a purchase or resolving a problem. This helps you understand and improve customer UX.
Eliminate Fake Traffic to Boost Your KPIs
Advertising KPIs are essential for monitoring and improving campaign performance. So all marketers should make use of these handy tables to measure results and optimise their ads.
But having the right advertising KPIs won’t stop bots from distorting your results. That’s where Lunio comes in. It allows you to make better decisions by stopping fake traffic from muddying your metrics.
- Stop bots and fake users clicking on your ads
- Improve the accuracy of your ad metrics (only tack genuine interactions)
- Reduce wasted ad spend by up to 25%
- Track ad spend saved, offering you another useful KPI