Understanding ad metrics: A guide for digital marketers

Advertising costs are rising — that’s no surprise for digital marketers today. With cost per lead (CPL) having risen by 25% in the last year and cost per click (CPC) increasing by over 10% (Statista), understanding and optimizing ad metrics is critical for teams who want to keep costs down while maintaining efficient campaigns and boosting ROI.

In this blog, we’ll look at why ad metrics are so important and the key measures you need to focus on.

What are ad metrics?

Ad metrics are measurements and data points used to track and analyze advertising campaigns. They can help marketers understand campaign successes and failures, from basic parameters such as impressions to financial impact (ROI).

Not all metrics are created equal when it comes to campaigns. The metrics you choose to track are based on campaign objectives. For example, if your campaign goal is brand awareness, you might want to measure impressions and reach. Or if you’re an ecommerce brand running a limited-time offer, you might focus on conversion rates and return on ad spend (ROAS).

Choosing the correct ad metrics ensures you focus on what matters most, and improve metrics that will drive campaign success.

Why are ad metrics important?

Ad metrics are the backbone of data-driven marketing decisions. Without these measurements, marketers would be operating in the dark, unable to see what’s working and what’s not. They provide the insights needed to optimize campaigns in real time, allowing for quick adjustments to improve performance and eliminate wasteful spending.

Ad metrics enable you  to demonstrate the tangible value of your marketing efforts to stakeholders. By translating marketing activities into concrete numbers, they help justify marketing investments and prove the direct impact on business objectives.

What ad metrics should you measure

With so many ad metrics to choose from, zooming in on the most relevant ones for your campaign is vital to avoid overwhelm. Here are some key measurements and how they can help you:

Impressions

Impressions are the number of times your ad is displayed to users. Calculate them by tracking the total number of times your ad appears on screen. Impressions are an important metric for measuring campaign reach and brand visibility.

Cost per mille (CPM)

CPM measures the cost of an ad or campaign per thousand impressions. Calculate it by dividing the total cost by the number of impressions, then multiplying by 1,000. By giving a clear metric of how much you’re spending for every 1,000 views, this metric helps you understand how efficient your ad campaigns are.

Bounce rate

The percentage of visitors who leave a site after viewing only one page. Calculate it by dividing single-page sessions by total sessions. A high bounce rate might indicate that a campaign’s targeting is misaligned, causing the wrong target audience to click. It may also indicate a poor landing page experience.

Click-through rate (CTR)

CTR shows the percentage of people who click on your ad after seeing it. Calculate it by dividing total clicks by total impressions. This metric is crucial for understanding ad relevance and creative effectiveness and is an overall marker of campaign success.

Cost per click (CPC)

CPC represents how much you pay for each click on your ad. Calculate it by dividing the total ad spend by the total number of clicks. This metric is used for managing budget efficiency in performance campaigns.

Cost per view (CPV)

This metric is used for video advertising and measures how much you pay for each video view. Calculate it by dividing the total cost by the number of views. This metric helps you budget for, and optimize, video campaigns.

Engagement rate

This represents the percentage of users who interact with your ad in some way — think “likes”, shares, comments, or clicks. Calculate it by dividing total engagements by total impressions. This metric is valuable for social media and content-focused campaigns and helps gauge the accuracy of set markets.

Return on investment (ROI)

ROI measures how profitable your advertising efforts are. Calculate it by dividing the profit on your overall advertising investment by the cost. In other words, it shows you how much you’re making based on how much you invested in a specific ad. This lets you know if your investments are effective, or if you need to make some adjustments.

Return on ad spend (ROAS)

ROAS measures revenue generated per dollar spent on advertising. Think of it as a more specific ROI. Calculate ROAS it by dividing revenue by ad spend to understand how much you’re earning for each dollar spent on advertising. This metric is another way to understand if your ads are profitable.

Conversion rate

Your conversion rate is the percentage of users who complete a desired action. This action (known as a conversion) may be clicking through to a landing page, making a purchase, or registering for a newsletter or upcoming webinar.  Calculate conversion rate by dividing total conversions by total clicks. Tracking conversion rates helps marketers understand if their ads convince people to take the desired action or not.

Cost per acquisition (CPA)

CPA shows how much each conversion costs. Calculate it by dividing the total ad spend by the number of conversions or acquisitions. This metric helps businesses understand how much they are investing in bringing in each new customer.

Lifetime value (LTV)

LTV predicts the total revenue a customer will generate over their entire relationship with a business. Calculate it by multiplying the average purchase value by purchase frequency and customer lifespan. This metric is important because a higher LTV is an indicator of higher profits for a business. This can influence how much you invest in customer acquisition.

What mobile ad metrics should you measure?

Now that we’ve reviewed ad metrics in general, let’s dive a bit deeper into metrics specifically for mobile ads.

App installs

This metric tracks the number of users who download and install your app through ad campaigns. This is a fundamental metric for app marketing campaigns.

Registrations/Sign-ups

This measures how many users create an account after installing. It’s a more specific metric than app install as it shows users who are seriously interested in using the app, helping you understand the effectiveness of your user acquisition funnel.

In-app purchases

This metric monitors revenue generated through in-app transactions. It’s an essential data point for apps with in-app purchase business models, showing you whether campaigns are leading to profits.

Subscription start/renewal

This metric tracks new and renewed subscriptions. It’s also worth tracking unsubscribes. Consider looking at how long it takes a user to subscribe after downloading as well. Tracking subscription starts or renewals helps subscription-based apps and services to understand their user behavior. 

Add to cart

This metric, for eCommerce apps, provides an insight into user intent and shopping behavior. Note that “add to cart” does not mean that the person completed the purchase, but showed a desire to buy products. This should be compared with checkout rates for a fuller picture of success.

Level completion

Relevant for gaming apps, level completion metrics track user progression and engagement with a game. This helps optimize game design and monetization.

Custom events

Custom events are specific actions defined by the app developer as important and therefore tracked over time. These vary by app but help track unique business objectives.

Retention/churn events

Retention shows how many users continue using the app over time, while churn represents those who stop. Comparing these metrics can help you understand long-term success as well as identify breaking points for customers — for example, if users start dropping off after a new release or a pricing change.

Daily active users (DAU)

DAU is the number of unique users who engage with your app daily. This metric indicates app stickiness and regular usage patterns.

Monthly active users (MAU)

MAU is the number of unique users engaging with your app monthly. This shows broader usage trends and growth, and works well for apps that expect regular — but not daily — interaction.

Stickiness

Calculated as DAU/MAU, stickiness shows how frequently your users engage with your app. Higher ratios indicate better user engagement.

Best practices for improving your ad metrics

There’s no need to reinvent the wheel when it comes to ad metrics. Let’s take a look at a few best practices.

Align metrics with campaign goals

Start by clearly defining campaign objectives and selecting metrics that directly measure success against these goals. This makes sure you’re optimizing for the right outcomes.

Decide which channels to use

Choose advertising channels based on where your target audience spends time and which platforms best support your campaign objectives.

Allocate your budget

Distribute your budget based on channel performance and campaign priorities. Regularly review and adjust allocations based on performance data.

Partner with an MMP (mobile measurement partner)

Work with a trusted MMP to ensure accurate data collection and analysis, particularly for mobile campaigns where tracking can be complex. AppsFlyer can help with this.

Optimize your campaign performance on a regular basis

Regularly review performance data and make data-driven adjustments to improve campaign efficiency and effectiveness.

The future of ad metrics

As the digital marketing landscape grows ever more competitive and marketing budgets have to work harder, data-driven advertising is here to stay — and it’s only going to get smarter. Let’s take a look at some of the current trends in the space.

Privacy-centric measurement

With increasing privacy regulations, the industry is shifting toward privacy-preserving measurement solutions. Marketers need to adapt to new measurement methodologies that respect user privacy while still providing actionable insights.

Increased use of first-party data

Businesses are increasingly focusing on collecting and leveraging first-party data for more accurate targeting and measurement. This shift helps build direct relationships with customers while reducing reliance on third-party data.

Machine learning and AI

Artificial intelligence and machine learning are changing how we analyze and act on ad metrics. These technologies enable more sophisticated attribution modeling and predictive analytics for campaign optimization.

Programmatic advertising

Programmatic advertising continues to evolve, offering more sophisticated targeting and measurement capabilities. This automation helps optimize campaign performance in real time based on multiple metrics simultaneously.

Key takeaways

• Rising ad costs make data-driven optimization more important than ever for maintaining profitable campaigns. Real-time ad metric tracking enables agile campaign optimization and eliminates wasted spend.
• Success metrics must be tailored to campaign objectives. There’s no one-size-fits-all approach to measuring advertising effectiveness.
• Mobile advertising requires a distinct measurement approach, going beyond traditional metrics to track user engagement throughout the entire app lifecycle.
• User retention and engagement metrics (like stickiness) are often more valuable than pure acquisition metrics for long-term business success.
• By regularly monitoring campaign performance, you can allocate budget more effectively and optimize your audience, channels, and creatives to improve results.
• Looking ahead, privacy-preserving measurement solutions and predictive modeling, driven by AI and machine learning, will make ad metrics increasingly sophisticated. Working with an MMP helps you stay on top of your data in today’s complex digital advertising environment.