8 metrics every marketer should know
A marketer who doesn’t count is someone who runs ads. A marketer who counts is someone responsible for the business’s money. You can see the difference at the very first interview and in the very first report for the owner.
The good news: you don’t need maths to speak the language of numbers. Understanding eight basic metrics is enough.
Ad metrics: is the ad working?
CTR (click-through rate). The share of people who saw the ad and clicked on it. Formula: clicks ÷ impressions × 100%. A low CTR usually means the ad is shown to the wrong people or doesn’t grab attention: a weak headline, a dull image, an unclear offer.
CPC (cost per click). How much you pay for one click. Formula: spend ÷ clicks. A cheap click guarantees nothing by itself: what matters is what people do after they click.
Website metrics: is the offer convincing?
CR (conversion rate). The share of visitors who took the target action: submitted a request, bought, subscribed. Formula: target actions ÷ visitors × 100%. If there’s traffic but no conversions, the problem is on the website or in the offer itself.
CPL (cost per lead). How much one lead costs. Formula: spend ÷ number of leads. This is usually the first metric a business owner asks about.
Business metrics: is the company making money?
CAC (customer acquisition cost). How much one new customer costs, including all marketing and sales expenses. Formula: marketing and sales spend ÷ number of new customers.
AOV (average order value). Formula: revenue ÷ number of orders. Sometimes it’s easier to increase the average order value than to find new customers.
LTV (lifetime value). How much money a customer brings in over the whole relationship with the company. The simplest approximation: average order value × number of purchases over the relationship. More precisely, count margin rather than revenue.
ROMI (return on marketing investment). Formula: (marketing revenue − marketing spend) ÷ marketing spend × 100%. A ROMI of 100% means every dollar invested came back and brought in one more.
How the metrics connect
Metrics form a chain. Impressions turn into clicks (CTR), clicks into leads (CR), leads into customers, and customers bring in money (average order value, LTV). When results drop, you need to find the link that’s breaking — not “raise the budget”.
A commonly used benchmark: LTV should be at least three times CAC. If a customer costs almost as much as they bring in, the business is working at a loss.
Where to start
- Take any ad campaign of yours or a campaign from a business you know.
- Calculate its CTR, CPC, CR and CPL.
- Find the link that looks weakest and think about what could be changed.
It’s a 30-minute exercise, after which metrics stop being abstract.
If you want to go through the numbers from your own work one-to-one and learn to make data-driven decisions, come to mentoring.