CPM, CPC, CTR, CPA: A Glossary of Advertising Metrics

Reports from Meta Ads, Google Ads, and TikTok Ads are full of acronyms. We explain the most important metrics, their formulas, and which ones are worth looking at when making decisions.

CPM: Cost Per Mille (Cost per Thousand Impressions)

CPM = Cost / Impressions × 1000. It shows how much you pay to reach your audience. It increases during peak seasons and with narrow target audiences.

CTR: Click-Through Rate

CTR = Clicks / Impressions × 100%. It indicates how effectively an ad captures attention. A low CTR is usually a signal that the creative or message needs a change.

CPC: Cost Per Click

CPC = Cost / Clicks. It depends on CPM and CTR. Better creative increases CTR and lowers the cost per click, even with the same CPM.

CR: Conversion Rate

CR = Conversions / Sessions × 100%. It shows how effectively the website converts traffic into purchases. You primarily influence it through changes on the website and in the offer, rather than in the campaign.

CPA: Cost Per Acquisition

CPA = Cost / Number of Conversions. For an online store, it is most often the cost of a single order. Compare it with your margin to know whether the campaign is profitable.

ROAS and MER

ROAS is the revenue attributed to a campaign divided by its cost. MER is the total store revenue divided by all marketing expenses. You can find more details in the article what is ROAS.

AOV and LTV

AOV is Average Order Value. LTV is Customer Lifetime Value. The higher the LTV, the more you can afford to pay to acquire a customer.

How to read these metrics together

• High CPM and good CTR: the issue is competition or seasonality, not the creative.

• Good CTR and low CR: the problem lies on the website or in the offer.

• Increasing CPA with steady CPM: creatives are fatiguing, it's time for new ones.

Summary

A single metric rarely tells the whole story. Only together do they show whether the issue lies in the creative, targeting, website, or offer. This is how we analyze client accounts as part of our performance strategy.