Go to content

Demystifying paid media metrics: insights for advertisers

Imagine you have just launched your paid search or social campaign, and a flood of data starts pouring in. Amongst the sea of numbers and statistics, how do you determine what the figures mean, what is important and what you can do with this new information?

Published November 8, 2023

In the fast-paced world of digital marketing, understanding the meaning and significance behind paid media metrics isn't just advantageous, it's imperative for advertisers. Our paid media team is here to decode these metrics, allowing you to make more data-driven decisions. 


Deciphering the Core Metrics and Their Significance 

Key Performance Indicators (KPIs): Your North Star 

Select the most relevant KPIs aligned with your business objectives - whether boosting sales, raising brand awareness, or driving customer engagement. These KPIs will serve as your guiding light, helping you focus on the right metrics for your paid media campaign. 

Impression Share: Optimising Ad Visibility 

Impression share is a metric that reveals the percentage of impressions your ads received compared to the total eligible impressions. This metric holds particular significance in competitive advertising landscapes. A high impression share indicates that your ads consistently appear when relevant search queries are made, thus maximising your visibility and potential reach. Monitoring impression share empowers you to identify opportunities for improving your ad's reach and overall performance. 

  • When experiencing a low impression share, consider reallocating the budget, reviewing match types or adjusting bids, as it is usually a budget limitation or competition issue.
  • When your impression share is high, it generally indicates that your ads are becoming more visible, which can be a positive sign. However, monitor other performance metrics: increasing impression share is valuable only if it translates into improved click-through and conversion rates.

Click-Through Rate (CTR): The Engagement Barometer 

Your CTR highlights the effectiveness of your ad copy and creativity. It measures the ratio of users who click on your ad to the total number of users who see it. A higher CTR often signifies more captivating ads but remember to contextualise this within your specific industry. 

  • When your CTR is decreasing, check if your ad content and creative assets are still appealing and relevant to the target audience.
  • When your CTR is improving, consider scaling your campaign to reach a larger audience and monitor your conversion rate to ensure that the quality of traffic is strong.

Cost-Per-Click (CPC): Balancing Budget and Results 

CPC represents the cost you incur every time someone clicks on your ad. Understanding your CPC is vital for budget management. Lowering your CPC while maintaining or improving CTR and conversion rates can significantly boost your ROI. 

  • When your CPC is decreasing, it may be due to improvements in the quality score or reduced competition, so continue to optimise your ad campaign for relevance.
  • An increase in CPC can occur due to higher competition on your bidding keywords. Check auction insights and competitive metrics where possible to monitor competition and better understand their impact on your CPC.

Conversion Rate: Leading to Valuable Outcomes 

Conversion rate stands as one of the most critical paid media metrics. It informs you what percentage of those who clicked on your ad completed the desired action, whether purchasing, filling out a form, or signing up for a newsletter. A high conversion rate implies that your ad not only attracts clicks but also contributes to turning those clicks into valuable actions. 

  • If your conversion rate is decreasing, ensure that your creative asset, headlines, and calls-to-action accurately represent what users can expect from the landing page and minimise the disconnect from the ad.
  • Take conversion rate growth as a sign of optimisation success and proceed to refine your campaign and landing page to maintain a streamlined user journey.

Cost Per Acquisition (CPA): Measuring Conversion Efficiency 

Cost Per Acquisition (CPA) serves as a vital metric for assessing the cost-efficiency of your paid media campaigns. It calculates the average expense incurred in acquiring a new customer or lead through your advertising efforts. A lower CPA signifies a more cost-effective customer acquisition process, making it a crucial measure when evaluating the overall success of your campaigns. 

  • With a lower CPA, you enable the capability to scale the campaign and grow visibility against your audience for the same budget.  
  • An increasing CPA is an efficiency concern; consider checking the targeting set-up as well as the relevance of your messaging alongside landing page experience.

Return on Ad Spend (ROAS): The ROI of Digital Advertising 

ROAS enables you to understand the revenue generated for every pound spent on advertising, ultimately allowing you to grow your ROAS for maximum profitability. 

  • A decreasing ROAS can be due to an increase in CPC or reduction in conversion rate. Could it be the time for you to switch to a different bidding strategy or review your landing page experience to enhance the ability to convert?
  • With an increasing ROAS, your campaign is showing efficiency improvements. Maintain or build on performance and consider building customer lifetime value by nurturing and retaining customers.

Selecting the Right Metric for Actionable Insights 

Choosing the right metric is not a one-size-fits-all science. At Novicell, we advocate for data-driven marketing and establishing metrics that align with your specific goals. This could involve monitoring conversion funnel progress, assessing quality scores to enhance ad relevance, or tracking CPC to manage advertising costs efficiently. 

Understanding the meaning and significance of your paid media metrics is essential for informed decision-making and campaign optimisation. By analysing these metrics, you can refine your strategies and ensure your marketing efforts deliver real value for your business. It's not just about the numbers; it's about the insights they provide to help you achieve your marketing goals effectively. 

About Novicell 

Paid media metrics serve as the lifeblood of your advertising attempts. The Novicell paid media team are experts in the intricacies of digital marketing metrics, equipping you with the knowledge needed to make informed decisions and maximise your marketing ROI. Within digital marketing, we delve deep into tracking, paid search marketing, and paid social advertising. Novicell can be your trusted partner for paid media campaign management, analysis and optimisation, ensuring that your advertising spend translates into meaningful results. Contact the team to find out more today. 

Contact the team to find out more today

Send us an email with your thoughts or questions.

Sam Mountstephens
Senior Paid Media Consultant
Contact me
Anders Holt
Chief Executive Officer
Contact me