Digital Marketing Metrics

Spending an ad budget is easy; the real question is how much profit each lira brings. Metrics such as clicks, conversions, customer acquisition and ad revenue reveal whether a campaign really pays.

Which tool for which question?

• Burn Rate and Cash Runway Calculator: Calculates gross and net burn rate, how many months current cash lasts (runway) and the extra funding needed for a target runway from the cash balance, monthly expenses and revenue.
• Conversion Rate, CTR, CPC and CPM Calculator: Calculates conversion rate, average order value, revenue per visitor, CTR, CPC, CPM and CPA from visitors, orders, revenue, impressions, clicks and ad spend.
• Customer Acquisition Cost (CAC) and Lifetime Value (CLV) Calculator: Calculates customer acquisition cost (CAC) from marketing spend, customer lifetime value (CLV) from purchase data, the LTV/CAC ratio and the CAC payback period.
• ROAS and ACoS Calculator (Return on Ad Spend): Calculates ROAS, ACoS, break-even ROAS/ACoS and profit after ad spend from ad spend and ad revenue, showing whether a campaign is profitable.

How the calculation works

• Conversion rate = orders ÷ visitors; CTR = clicks ÷ impressions; CPC = spend ÷ clicks; CPM = spend ÷ thousand impressions; CPA = spend ÷ conversions.
• ROAS = ad revenue ÷ ad spend; ACoS is its inverse (spend ÷ revenue). Whether a campaign is profitable shows when this value is compared with gross margin.
• CAC = total marketing spend for new customers ÷ customers acquired; CLV is the gross profit a customer leaves over their lifetime. The CLV ÷ CAC ratio shows whether marketing spend is sustainable.
• Burn rate and runway show how many months a business not yet profitable can last on its cash.

Things to watch

• A high ROAS is not good alone; look at margin for profitability.
• A CLV estimate depends on assumptions (retention, repeat purchase); an optimistic assumption makes CAC look cheaper than it is.
• Compare metrics for the same period and the same channel.