Key points
- CPC measures cost per click, while CPM measures cost per thousand impressions.
- Conversion rate needs a clearly defined action.
- ROI depends on revenue, cost and attribution assumptions.
Start with the campaign objective
Metrics only make sense when the goal is clear. Awareness campaigns often care about reach, frequency and CPM. Traffic campaigns often care about CPC and landing page quality. Sales campaigns need conversion rate, revenue and margin. A low cost metric is not automatically good if it does not support the objective.
CPC and CPM answer different questions
CPC tells you how much each click costs. CPM tells you how much it costs to buy one thousand impressions. A campaign can have a low CPM but poor clicks, or a higher CPC with stronger buying intent. Comparing them fairly means looking at the next step in the journey, not only the media platform report.
Conversion rate depends on the action
A conversion can be a sale, lead, booking, account signup or other action. The rate is only meaningful when the action is defined consistently. If one report counts checkout starts and another counts completed orders, the conversion rates are not directly comparable.
ROI needs clean cost and revenue inputs
ROI compares return with cost, but both sides can be messy. Include media spend, agency fees, creative costs and discounts where relevant. On the return side, decide whether to use revenue, gross profit or contribution margin. For many businesses, margin-based ROI is more useful than revenue-based ROI.
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