Marketers should know: Main metrics and KPIs for Performance Marketing
The main performance metrics in performance marketing vary depending on the specific goals of the campaign and the type of advertising platform being used. However, some common performance metrics used in performance marketing include:
- Cost per Acquisition (CPA): This is the cost of acquiring a new customer or user, and is calculated by dividing the total cost of a campaign by the number of conversions or acquisitions.
- Return on Ad Spend (ROAS): This is the amount of revenue generated for every dollar spent on advertising. ROAS is calculated by dividing the total revenue generated by the total ad spend.
- Click-Through Rate (CTR): This is the percentage of users who click on an ad after seeing it. CTR is calculated by dividing the number of clicks by the number of impressions.
- Conversion Rate: This is the percentage of users who complete a desired action, such as making a purchase or filling out a form. Conversion rate is calculated by dividing the number of conversions by the number of clicks.
- Cost per Click (CPC): This is the cost of each click on an ad, and is calculated by dividing the total ad spend by the number of clicks.
- Cost per Impression (CPM): This is the cost of each impression, or view, of an ad. CPM is calculated by dividing the total ad spend by the number of impressions.
- Lifetime Value (LTV): This is the total value that a customer or user brings to a business over their lifetime, and is calculated by estimating the average revenue generated by a customer or user over time.
These performance metrics are important for measuring the effectiveness of a performance marketing campaign and optimizing it for maximum results. It's important to track these metrics regularly and make adjustments to the campaign strategy as needed to ensure that the campaign is meeting its goals and generating a positive ROI.
Resourceful marketers take full advantage of functionality available in MMPs (Mobile Measurement Partners) such as Appsflyer and Adjust to track and analyze performance metrics and optimize digital marketing campaigns.
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