Glossary
Advertising metrics glossary: CPM, CTR, CPC, ROAS and more
Most advertising metrics are a simple ratio. CTR is clicks divided by impressions, CPC is cost divided by clicks, CPM is cost per thousand impressions, CPA is cost divided by conversions, and ROAS is revenue from ads divided by ad spend. This glossary defines each with its formula.
- Impression
- One time your ad is shown on a screen. The same person can generate several impressions.
- Reach
- The number of different people who saw your ad at least once.
- Frequency
- The average number of times each person saw your ad. Formula: impressions / reach.
- Click-through rate (CTR)
- The share of impressions that led to a click. Formula: clicks / impressions.
- Cost per click (CPC)
- The average cost of one click. Formula: ad spend / clicks.
- CPM
- The cost of 1,000 impressions. Formula: ad spend / impressions x 1,000.
- Conversion
- The action you want someone to take after seeing your ad, such as an enquiry, booking, call or purchase. You define it in your tracking.
- Conversion rate
- The share of clicks (or visits) that became conversions. Formula: conversions / clicks.
- Cost per acquisition (CPA)
- The average cost of one conversion. Called cost per lead when the conversion is an enquiry. Formula: ad spend / conversions.
- Return on ad spend (ROAS)
- Revenue attributed to ads for every dollar of ad spend. Formula: revenue from ads / ad spend. A ROAS of 4 means $4 of revenue per $1 spent. It ignores costs other than ad spend.
- Creative
- The visual and written part of an ad: image or video, headline and text.
- Concept
- A distinct idea an ad communicates, such as a benefit or an answer to an objection. A new colour or headline on the same idea is a variation, not a new concept.
- Creative fatigue
- The drop in response when the same audience sees the same ad too often. Rising frequency alongside falling CTR is a common sign.
- A/B test
- Running two versions that differ in one thing to see which performs better. Change one major element at a time, or you will not know what caused the difference.
- Placement
- Where an ad appears, such as Facebook Feed, Instagram Stories or Reels.
- Retargeting
- Showing ads to people who have already visited your website or engaged with you.
- Landing page
- The page someone arrives at after clicking an ad. Its job is to continue what the ad promised.
- Primary text, headline, description
- The written parts of a Meta ad: the main message above the image, the bold line next to the button, and a supporting line.
- Call to action (CTA)
- The button or instruction that tells people what to do next, such as Learn more or Book now.
- Campaign, ad set, ad (Meta)
- The three levels in Meta Ads Manager. The campaign holds the objective, the ad set holds budget, audience and placements, and the ad holds the creative.
- Learning phase (Meta)
- The period after a launch or a big edit when Meta's delivery system is still adjusting. Performance can be less stable during it.
Definitions are general. Platforms such as Meta and Google may compute or label metrics slightly differently, so check each platform's own documentation for exact definitions.