At Silkee, we don’t think that marketing should be rocket science. The first step in demystifying it is to ensure that the basic terminology is understood by all.
Core metrics
1. Clicks
What it is: The number of times people clicked on your ad.
Example: Your ad for trainers was shown 1,000 times, and 50 people clicked on it. That means your ad got 50 clicks.
2. Reach
What it is: The number of unique people who have seen your ad.
Example: If 800 different people saw your ad, your reach is 800.
3. Impressions
What it is: The total number of times your ad was shown, regardless of whether it was clicked.
Example: If your ad was shown 1,000 times (even if it was the same person seeing it more than once), you have 1,000 impressions.
4. CPM (Cost Per Thousand Impressions)
What it is: The cost you pay for 1,000 impressions.
Example: If you spent £10 for 1,000 impressions, your CPM is £10.
5. CPC (Cost Per Click)
What it is: How much you pay every time someone clicks on your ad.
Example: You spent £50, and your ad got 50 clicks. Your CPC is £50 ÷ 50 = £1 per click.
6. ROAS (Return on Ad Spend)
What it is: How much revenue you generate for every £1 spent on ads.
Example: You spent £100 on ads, and it generated £500 in sales. Your ROAS is £500 ÷ £100 = 5. This means you made £5 for every £1 spent.
7. Conversion Rate
What it is: The percentage of people who completed a desired action (e.g., made a purchase) after clicking your ad.
Example: 50 people clicked on your ad, and 5 of them bought shoes. Your conversion rate is (5 ÷ 50) × 100 = 10%.
8. CPA (Cost Per Acquisition or Cost Per Action)
What it is: The cost to get one conversion (such as a sale, lead, or signup).
Example: You spent £200 on ads and got 10 purchases. Your CPA is £200 ÷ 10 = £20 per purchase.
9. CTR (Click-Through Rate)
What it is: The percentage of people who clicked on your ad after seeing it.
Example: Your ad had 1,000 impressions and 50 clicks. Your CTR is (50 ÷ 1,000) × 100 = 5%.
10. AOV (Average Order Value)
What it is: The average amount of money a customer spends per order.
Example: You had 10 sales, and the total revenue was £500. Your AOV is £500 ÷ 10 = £50 per order.
11. Impression Share
What it is: The percentage of impressions your ad received compared to the total number of impressions it could have gotten.
Example: If there were 10,000 potential impressions available, and your ad was shown 2,500 times, your impression share is (2,500 ÷ 10,000) × 100 = 25%.
12. Impression Share Lost (due to Budget)
What it is: The percentage of impressions your ad missed out on because your budget was too low.
Example: If you lost 1,000 impressions due to budget limitations, and there were 10,000 total available impressions, you lost (1,000 ÷ 10,000) × 100 = 10% of impression share due to budget.
13. Impression Share Lost (due to Rank)
What it is: The percentage of impressions your ad missed out on because your ad rank was too low.
Example: If you missed 1,500 impressions due to a low ad rank, and 10,000 total impressions were available, you lost (1,500 ÷ 10,000) × 100 = 15% of impression share due to rank.
Example Walkthrough:
Let’s say you’ve set up an ad campaign with a budget of £100 for your online shoe shop:
Your ad got 2,000 impressions (it was shown 2,000 times).
Out of those 2,000 impressions, 100 people clicked on the ad, so you got 100 clicks.
The ad reached 1,500 different people (meaning some people saw the ad more than once), so your reach is 1,500.
You spent £100 on the campaign, and since you got 2,000 impressions, your CPM is (£100 ÷ 2,000) × 1,000 = £50.
Your ad spent £100 and got 100 clicks, so your CPC is £100 ÷ 100 = £1 per click.
You made £500 in sales from this campaign, so your ROAS is £500 ÷ £100 = 5 (meaning you made £5 for every £1 spent).
Out of the 100 people who clicked the ad, 10 bought shoes. So, your conversion rate is (10 ÷ 100) × 100 = 10%.
Since you spent £100 and got 10 purchases, your CPA is £100 ÷ 10 = £10 per purchase.
Your ad had 2,000 impressions and 100 clicks, so your CTR is (100 ÷ 2,000) × 100 = 5%.
You had 10 sales, and the total revenue was £500. Your AOV is £500 ÷ 10 = £50 per order.
If your ad had the opportunity to get 5,000 impressions but only received 2,000, your impression share is (2,000 ÷ 5,000) × 100 = 40%.
If you lost 1,000 impressions due to budget, your impression share lost due to budget is (1,000 ÷ 5,000) × 100 = 20%.
If you lost 500 impressions due to your ad’s low rank, your impression share lost due to rank is (500 ÷ 5,000) × 100 = 10%.
Additional metrics
14. CPL (Cost Per Lead)
What it is: The amount you pay to acquire a lead (someone who has expressed interest, such as by filling out a form).
Example: If you spend £200 and get 20 leads, your CPL is £200 ÷ 20 = £10 per lead.
15. LTV (Lifetime Value)
What it is: The total revenue a customer is expected to generate over the entire relationship with your business.
Example: If a customer typically buys from your online shop 3 times, and their average order value is £50, their LTV is £50 × 3 = £150.
16. Bounce Rate
What it is: The percentage of visitors who clicked on your ad and then left your website without interacting (e.g., didn't browse further or make a purchase).
Example: If 100 people click on your ad and 40 leave immediately without interacting, your bounce rate is (40 ÷ 100) × 100 = 40%.
17. Page Views
What it is: The number of pages a user views on your website after clicking an ad.
Example: If 100 users clicked on your ad and browsed a total of 250 pages, you have 250 page views.
18. Time on Page/Session Duration
What it is: The average time a visitor spends on your website after clicking the ad.
Example: If 50 visitors spend an average of 3 minutes browsing your site, your average session duration is 3 minutes.
19. Frequency
What it is: The average number of times an individual has seen your ad.
Example: If your ad received 1,500 impressions but only 500 unique people were reached, your frequency is 1,500 ÷ 500 = 3 (on average, each person saw the ad 3 times).
20. Engagement Rate
What it is: The percentage of people who engage with your ad, such as by liking, sharing, or commenting (particularly relevant in social media marketing).
Example: If 200 people saw your social media ad and 20 people liked or commented, your engagement rate is (20 ÷ 200) × 100 = 10%.
21. Ad Rank
What it is: A score that determines your ad’s position in paid search results (usually influenced by factors like bid, quality score, and relevance).
Example: If your ad performs well in terms of quality and bid, it will rank higher, meaning more people are likely to see it.
22. Quality Score (in Search Ads)
What it is: A metric used by platforms like Google Ads to measure the relevance and quality of your ad. A higher score can lead to lower costs and better ad positioning.
Example: If your ad copy is highly relevant to the keywords, your landing page is optimised, and your click-through rate is high, your quality score may be 8/10.
23. View-Through Conversion
What it is: This tracks people who saw your ad but didn’t click on it immediately, and later visited your website or converted (e.g., made a purchase).
Example: Someone saw your ad while browsing but didn't click it, then came back to your site later and bought shoes. That’s a view-through conversion.
24. Customer Retention Rate
What it is: The percentage of customers who continue to buy from your brand over a certain period.
Example: If you had 100 customers last year, and 60 of them bought from you again this year, your retention rate is (60 ÷ 100) × 100 = 60%.
25. Churn Rate
What it is: The percentage of customers who stop buying or interacting with your brand over a specific period.
Example: If you started with 200 customers and 50 stopped buying from you, your churn rate is (50 ÷ 200) × 100 = 25%.
26. Add to Cart Rate
What it is: The percentage of users who add items to their shopping cart after clicking on your ad.
Example: If 100 people visited your site after clicking an ad and 20 added products to their cart, your add to cart rate is (20 ÷ 100) × 100 = 20%.
27. Cart Abandonment Rate
What it is: The percentage of people who add items to their cart but do not complete the purchase.
Example: If 50 people added items to their cart, but only 20 completed the purchase, your cart abandonment rate is [(50 - 20) ÷ 50] × 100 = 60%.
28. Session-to-Lead Conversion Rate
What it is: The percentage of website sessions that result in a lead (e.g., filling out a form or signing up for a newsletter).
Example: If 1,000 visitors came to your website and 50 of them became leads, your session-to-lead conversion rate is (50 ÷ 1,000) × 100 = 5%.
If you have any questions, need advice, or want to take your digital marketing to the next level, we’re here to help. Our team offers a free audit to assess your current performance and show you how we can improve your results. Reach out today and let’s discuss how we can work together to maximise your ROI!
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