Glossary

Advertising metrics, defined plainly.

Every metric Adsevon reports, defined the way we use it: what it means, how it is calculated, a worked example, and the mistake that most often leads people astray. There is no universal “good” value for any of these — context, margins, and trend matter more than any single number.

Return on ad spend (ROAS)

Return on ad spend (ROAS) is the revenue attributed to advertising divided by the cost of that advertising. A ROAS of 4.0 means $4 of attributed revenue for every $1 of ad spend.

ROAS = attributed revenue ÷ ad spend

Worked example

A campaign spends $2,500 and is credited with $10,000 of revenue. ROAS = 10,000 ÷ 2,500 = 4.0 (often written 400%).

Common mistake

Judging ROAS without margins. A 4.0 ROAS loses money if your gross margin is under 25% — compare ROAS with break-even ROAS, not with other advertisers.

Break-even ROAS

Break-even ROAS is the minimum ROAS at which advertising covers its own cost after product costs. Below it, every sale the campaign produces loses money; above it, the campaign contributes profit before overheads.

Break-even ROAS = 1 ÷ gross margin (as a decimal)

Worked example

Your gross margin is 40% (0.40). Break-even ROAS = 1 ÷ 0.40 = 2.5. A campaign at 2.2 ROAS is unprofitable even though revenue is more than double the spend.

Common mistake

Using revenue margin instead of gross margin. Shipping, fees, and returns belong in the margin, or the break-even point is understated.

Cost per acquisition (CPA)

Cost per acquisition (CPA) is the average advertising cost of one conversion — a purchase, signup, or lead, depending on what the campaign optimizes for.

CPA = ad spend ÷ conversions

Worked example

A campaign spends $1,200 and produces 60 purchases. CPA = 1,200 ÷ 60 = $20 per purchase.

Common mistake

Comparing CPA across campaigns with different conversion definitions (a lead is not a purchase), or celebrating a low CPA bought with low-quality, low-intent traffic.

Customer acquisition cost (CAC)

Customer acquisition cost (CAC) is the fully loaded cost of winning one new customer — typically all sales and marketing spend, not just media, divided by new customers in the same period.

CAC = total sales + marketing cost ÷ new customers

Worked example

In a quarter you spend $30,000 on ads, $6,000 on tools and freelancers, and win 300 new customers. CAC = 36,000 ÷ 300 = $120.

Common mistake

Confusing CAC with CPA. CPA is media-only and per conversion; CAC is fully loaded and per customer. Mixing them makes LTV:CAC ratios meaningless.

Cost per click (CPC)

Cost per click (CPC) is the average price paid for one click on an ad. It reflects auction competition, ad quality, and targeting breadth for a keyword or audience — what a click costs before any judgement about what the click was worth.

CPC = ad spend ÷ clicks

Worked example

A campaign spends $800 and receives 2,000 clicks. CPC = 800 ÷ 2,000 = $0.40.

Common mistake

Treating a rising CPC as automatically bad. If conversion rate rises faster, CPA can fall while CPC climbs. CPC is a diagnostic input, not a verdict.

Cost per mille (CPM)

Cost per mille (CPM) is the price of 1,000 ad impressions. It is the standard buying metric for awareness placements and a useful lens on auction pressure.

CPM = (ad spend ÷ impressions) × 1,000

Worked example

A campaign spends $500 for 100,000 impressions. CPM = (500 ÷ 100,000) × 1,000 = $5.00.

Common mistake

Comparing CPM across platforms with different viewability and placement quality. A cheap CPM on unseen placements is not cheap reach.

Click-through rate (CTR)

Click-through rate (CTR) is the share of people who saw an ad and clicked it. It is the most common first signal of ad–audience fit and creative fatigue.

CTR = clicks ÷ impressions × 100%

Worked example

An ad is shown 50,000 times and clicked 750 times. CTR = 750 ÷ 50,000 = 1.5%.

Common mistake

Reading CTR without position and placement context, or panicking over a CTR drop that is really an audience expansion into colder traffic.

Conversion rate (CVR)

Conversion rate (CVR) is the share of clicks (or sessions) that end in the conversion the campaign is optimizing for. It measures what happens after the click — landing page, offer, and intent combined.

CVR = conversions ÷ clicks × 100%

Worked example

A landing page receives 2,000 ad clicks and produces 50 purchases. CVR = 50 ÷ 2,000 = 2.5%.

Common mistake

Blaming the ad for a CVR problem that lives on the landing page — or crediting the page for a CVR gain that came from warmer traffic.

Impressions

Impressions count how many times an ad was served. Depending on the platform, an impression may mean the ad was rendered, viewable, or merely loaded — definitions differ, so cross-platform impression totals are approximations.

Worked example

A campaign reports 250,000 impressions and a frequency of 2.5, so it reached roughly 100,000 unique people.

Common mistake

Adding impressions across platforms as if they were deduplicated people. The same person on three platforms is three impression piles, one human.

Frequency

Frequency is the average number of times each unique person has seen an ad in a period. Rising frequency with falling CTR is the classic signature of creative fatigue.

Frequency = impressions ÷ unique reach

Worked example

A campaign delivers 90,000 impressions to 30,000 people. Frequency = 90,000 ÷ 30,000 = 3.0.

Common mistake

Applying a universal frequency cap. Prospecting and retargeting tolerate very different frequencies; judge frequency together with CTR and CPA trend, not alone.

Conversion value

Conversion value is the total monetary value a platform attributes to the conversions from an ad — for e-commerce, usually the order revenue of attributed purchases. It is the numerator of ROAS.

Worked example

A platform attributes 120 purchases with a combined order value of $9,600. That $9,600 is the conversion value; divided by spend, it gives ROAS.

Common mistake

Summing conversion value across platforms. Each platform claims credit for overlapping conversions, so the sum routinely exceeds real revenue.

Average order value (AOV)

Average order value (AOV) is the average revenue per order. AOV links media metrics to business economics: at a fixed CPA, higher AOV means more room for profit.

AOV = total order revenue ÷ number of orders

Worked example

A store takes $48,000 across 800 orders. AOV = 48,000 ÷ 800 = $60.

Common mistake

Optimizing ads in isolation when the fastest CPA improvement is a higher AOV (bundles, thresholds, upsells) rather than cheaper traffic.

Lifetime value (LTV)

Lifetime value (LTV) is the total gross profit (or revenue, if defined so) one customer generates over the whole relationship. It sets the ceiling for what you can afford to pay in CAC.

LTV = average order value × purchase frequency × customer lifespan (use gross margin, not revenue, for spending decisions)

Worked example

Customers buy 3 times a year for 2 years at a $60 AOV and 40% margin: LTV ≈ 60 × 3 × 2 × 0.40 = $144 of gross profit per customer.

Common mistake

Computing LTV on revenue and then spending CAC against it as if it were profit — the classic way "healthy" LTV:CAC ratios hide losses.

Marketing efficiency ratio (MER)

Marketing efficiency ratio (MER) compares total business revenue to total marketing spend across all channels. Because it uses real revenue instead of platform-attributed revenue, it avoids double-counting credit.

MER = total revenue ÷ total marketing spend

Worked example

A business earns $200,000 in a month and spends $40,000 on all advertising. MER = 200,000 ÷ 40,000 = 5.0.

Common mistake

Expecting MER to assign credit to individual campaigns. MER is a whole-business steering metric; pair it with per-platform ROAS and incrementality thinking, not instead of them.

Blended ROAS

Blended ROAS is total revenue divided by total ad spend across every channel — the same idea as MER on a purely media basis. It answers "overall, what does a dollar of ads return?" without trusting any platform's attribution.

Blended ROAS = total revenue ÷ total ad spend (all channels)

Worked example

Total revenue is $150,000 and combined spend across Meta, Google, and TikTok is $30,000. Blended ROAS = 150,000 ÷ 30,000 = 5.0.

Common mistake

Comparing one platform's attributed ROAS against blended ROAS. Attributed ROAS is inflated by claimed credit; blended is not.

Marginal ROAS

Marginal ROAS is the return on the next increment of spend — what the last (or next) $1,000 actually earns, rather than the campaign average. Scaling decisions should be made on marginal returns, because averages hide saturation.

Marginal ROAS = change in revenue ÷ change in spend

Worked example

Raising a campaign's budget from $5,000 to $6,500 lifts attributed revenue from $20,000 to $24,500. Marginal ROAS = 4,500 ÷ 1,500 = 3.0 — below the 4.0 average, a sign returns are thinning.

Common mistake

Scaling on average ROAS. A campaign can show a healthy average while every additional dollar returns almost nothing.

Attribution window

An attribution window is the period after a click or view during which a conversion is credited to an ad. A 7-day click window credits purchases made within 7 days of the click. Longer windows claim more credit; window choice changes reported ROAS without changing reality.

Worked example

The same campaign can show a ROAS of 3.2 under a 1-day click window and 4.1 under a 7-day click window — identical spend and sales, different credit rules.

Common mistake

Comparing platforms or periods that use different windows, or lengthening a window to make performance look better before a review.

Incremental lift

Incremental lift is the additional outcome caused by advertising that would not have happened otherwise, usually measured with a holdout: one group sees ads, a comparable group does not. It is the difference between correlation (attributed conversions) and causation.

Lift = conversion rate (exposed) − conversion rate (holdout)

Worked example

In a holdout test, 2.4% of the exposed group buys versus 2.0% of the holdout. Incremental lift is 0.4 percentage points — much of the platform-attributed conversion would likely have happened anyway.

Common mistake

Treating attributed conversions as incremental. Branded search and retargeting routinely claim credit for demand other activity created.

Assisted conversions

Assisted conversions are conversions where a channel played a supporting role earlier in the journey but was not the final credited touch. They show which channels create demand that other channels harvest.

Worked example

A video campaign rarely gets last-click credit, but paths that include it convert at a higher rate — its assisted conversions reveal the contribution last-click hides.

Common mistake

Cutting an "unprofitable" prospecting channel on last-click ROAS, then watching the retargeting and search campaigns that fed on it decay a month later.

Budget pacing

Budget pacing is how spend is distributed across a period relative to plan. Pacing compares the share of budget spent with the share of the period elapsed, so a campaign can be corrected mid-flight instead of at month-end.

Pacing = % of budget spent ÷ % of period elapsed (1.0 = exactly on pace)

Worked example

Halfway through the month a campaign has spent 72% of its budget: pacing = 72 ÷ 50 = 1.44 — it is burning 44% faster than planned and will run dry early.

Common mistake

Reviewing pacing only at month-end, or forcing perfectly even daily spend when demand is uneven across the week.

Definitions maintained by Adsevon Editorial. Last reviewed October 23, 2026. See how these metrics drive Adsevon’s analysis in our methodology and try the free calculators.