Top 7 Performance Marketing Metrics You Must Track for Success
Performance marketing is one of the most powerful ways to drive measurable business growth. Because you’re paying for specific actions—clicks, leads, sales, or installs—it gives you a direct view into what’s working and what’s not. To succeed, focus on the right metrics that tie spend directly to business outcomes.
1. Return on Ad Spend (ROAS)
What it is: Measures revenue earned for every dollar spent on advertising.
Formula: ROAS = Revenue from Ads ÷ Ad Spend
Why it matters: Ultimate profitability metric. High ROAS = efficient ad spend.
How to improve: Test audiences/placements, use AI bidding, optimize landing pages.
2. Customer Acquisition Cost (CAC)
What it is: Total cost to acquire a new customer.
Formula: CAC = Total Marketing Spend ÷ Number of New Customers
Why it matters: Must be lower than LTV for sustainable campaigns.
How to improve: Refine targeting, retarget warm prospects, optimize sales funnel.
3. Conversion Rate (CVR)
What it is: Percentage of users who complete desired actions after clicking an ad.
Formula: CVR = (Conversions ÷ Clicks) × 100
Why it matters: Reveals landing page and funnel effectiveness.
How to improve: A/B test pages, speed up mobile load, add social proof.
4. Cost Per Acquisition (CPA)
What it is: Cost to acquire a single conversion.
Formula: CPA = Total Ad Spend ÷ Total Conversions
Why it matters: Lower CPA while maintaining quality improves ROI.
How to improve: Use lookalike audiences, optimize creatives, adjust bids.
5. Lifetime Value (LTV or CLV)
What it is: Total revenue a customer generates over their relationship with your business.
Why it matters: Guides CAC decisions. Higher LTV justifies higher acquisition spend.
How to improve: Upsell, cross-sell, implement loyalty programs, provide excellent service.
6. Click-Through Rate (CTR)
What it is: Measures clicks versus impressions.
Formula: CTR = (Clicks ÷ Impressions) × 100
Why it matters: Shows ad relevance and engagement; can lower CPC.
How to improve: Use compelling headlines, align copy with intent, test CTAs.
7. Return on Investment (ROI)
What it is: Measures overall profit after all costs.
Formula: ROI = (Net Profit ÷ Total Campaign Cost) × 100
Why it matters: Shows true profitability.
How to improve: Track all costs, focus on high-LTV customers, balance short-term and long-term strategies.
Bonus Metric: Incremental Lift
Measures extra sales or leads generated that wouldn’t have occurred without the campaign. Requires holdout or geo-split tests for accurate results.
Putting It All Together
- ROAS – revenue efficiency
- CAC – acquisition cost
- CVR – funnel effectiveness
- CPA – cost per conversion
- LTV – long-term value
- CTR – ad engagement
- ROI – overall profitability
Monitoring these metrics together allows smarter decisions about budget, targeting, and creative strategy for higher ROI.
Final Thoughts
Performance marketing’s strength is measurability — but only if you track the right metrics. Focus on these seven key metrics, plus incremental lift, to move beyond vanity numbers toward sustainable, profitable growth.