Metrics Used in Advertising

Basic Metrics Used for Online Advertising

The good thing about digital marketing is that even though it is a data-driven marketing effort, you don’t need a Doctorate in Mathematics to be good at it. The basic metrics used for online advertising is just simple division and multiplication. You only need to grasp what each term stands for – which is also usually quite self-explanatory.

Here are the four basic metrics used for online advertising, that will be used in any campaign that you ever run online.

Impressions

Impressions  is the number of people your ad was shown to. For example, if you are advertising on Facebook and the ad was seen by 5000 people, then in digital marketing the technical term for it is 5000 ad impressions.

Clicks

Clicks is defined as the number of clicks your ad received from users who saw you ad. Taking forward the example above, suppose your ad got 30 clicks in 5000 impressions, then it is reported as 30 clicks.

Click-through Rate (CTR)

A Click-through rate, usually referred to as the CTR of an ad, is the percentage of people who clicked your ad. For example, the CTR of an ad where 30 people clicked of the 5000 people who saw it is 0.600%.

The math behind this is,

CTR=Clicks received/Number of impressions

CTR is more of an indicative metric to check the health of an ad campaign. A good CTR usually implies that your ad is doing well and is reaching a relevant set of users.

Read: Why is CTR important

Cost per Click (CPC)

A cost per click, often called as the CPC, is an important metric in online advertising. A CPC of an ad is often derived from the total spend of an ad. For example, if your ad spent $15. And you received 30 clicks for the same. Then it implies that you paid $0.50 per click on the ad.

The math behind this is,

CPC= Total spend/Number of clicks received

The other two important metrics used for online advertising have been devoted an individual post. You can read them here: