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A metric for every stage: CPM, CTR, CVR, CPA, ROAS

7 minutes, 10 steps, workout 6 of 6 in this module

It's Monday morning and your manager asks why cost per order jumped last week. If you only know the acronyms, you'll scroll through the ads dashboard and guess. When you can do the math behind each number, you can say whether the ad, the page or the auction got more expensive, and the conversation turns into a decision instead of a blame session.

What you'll be able to do

By the end of this workout, you'll be able to calculate CPM, CTR, CVR, CPA, and ROAS, and read from the numbers which stage of a campaign is getting weaker.

A first look: Warm-up: Every stage has a report card

Every funnel stage has its own metric. Awareness: CPM, the cost of 1,000 impressions (spend ÷ impressions × 1,000). Interest: CTR, the percentage of people who saw the ad and clicked (clicks ÷ impressions × 100), and CPC, the cost per click (spend ÷ clicks). Conversion: CVR (conversions ÷ clicks × 100) and CPA, the cost of one conversion (spend ÷ conversions). Profitability: ROAS (revenue from ads ÷ ad spend).

What this workout covers

  1. 1Warm-up: Every stage has a report card
  2. 2One campaign, five metrics
  3. 3Case: Which ad set gets the budget?
  4. 4Module complete: Which link broke?

A question from this workout: Which ad set gets the budget?

Northpack is testing two ad sets on Meta for the same backpack. Set A is a colorful, funny video. Set B is a simple product video that shows the inside of the backpack. After one week, you need to decide which one gets an extra $600 in budget.

Both sets · spend
$600
Both sets · impressions
62,500
Set A · CTR / clicks
3.2% / 2,000
Set A · orders
16
Set B · CTR / clicks
1.2% / 750
Set B · orders
30

Where do you put the extra $600?

  1. Set A. Its CTR is almost three times higher, so people love this ad
  2. Split it evenly. Give both sets a chance
  3. Stop both and shoot a new video
  4. Set B. It brings in orders for less

Pick your answer first, then open the reasoning below.

Show the answer and the reasoning

Answer: D. Set B. It brings in orders for less

A's CPA is $600 ÷ 16 = $37.50. B's is $600 ÷ 30 = $20. A gets lots of clicks, but the people who click don't buy (CVR 0.8%). With B, 4% of the people who click buy. Picking A because of its CTR is the most common mistake: clicks don't make you money, orders do. Shift the budget to B step by step and keep an eye on CPA.

The other steps work the same way: you decide first, then see why each option is right or wrong.

How you practice here

  • 3 short concept cards
  • 2 multiple-choice questions
  • 1 campaign case with real-looking numbers
  • 1 matching exercise
  • 3 guided calculations