1. Cost Per Click (CPC)
Cost Per Click (CPC) means the amount of money you pay every time someone clicks on your ad. This is commonly used in platforms like Google Ads or social media advertising.
For example, if you run an ad and each click costs ₹5, and 100 people click your ad, you will spend ₹500. CPC helps marketers control their budget and measure how effective their ads are in attracting users.
A lower CPC is usually better because it means you are getting more clicks for less money. However, cheap clicks are not always valuable unless they lead to conversions.
2. Cost Per Acquisition (CPA)
Cost Per Acquisition (CPA) refers to how much it costs to get one customer or one conversion. A conversion could be a purchase, signup, or any action you want users to take.
For example, if you spend ₹1000 on ads and get 10 customers, your CPA is ₹100. This metric is very important because it tells you whether your marketing is profitable.
Businesses always try to keep CPA low while maintaining quality customers. If CPA is too high, it means you are spending too much to get each customer
3. Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) measures how much revenue you earn for every rupee spent on advertising. It is one of the most important metrics in performance marketing.
For example, if you spend ₹1000 on ads and earn ₹5000 in revenue, your ROAS is 5:1. This means for every ₹1 spent, you earn ₹5.
A higher ROAS means your campaign is successful and profitable. Marketers constantly analyze ROAS to decide whether to continue, stop, or improve their campaigns.
4. Conversion Rate
Conversion Rate is the percentage of users who take the desired action after clicking on your ad. This action could be buying a product, filling out a form, or downloading an app.
For example, if 100 people visit your website and 5 of them make a purchase, your conversion rate is 5%.
A higher conversion rate means your website or landing page is effective. Businesses improve this by optimizing design, content, and user experience
5. Click-Through Rate (CTR)
Click-Through Rate (CTR) shows how many people clicked your ad compared to how many people saw it. It is expressed as a percentage.
For example, if 1000 people see your ad and 50 click on it, your CTR is 5%.
CTR helps you understand how attractive your ad is. A high CTR means your ad is engaging and relevant. If CTR is low, you may need to improve your ad copy, design, or targeting.
