Ad Spend Efficiency Metrics

"What ad metrics should you track?" 🧵 Dara Denney's framework from $100M in ad spend: Dara splits her metrics into TWO categories Primary KPIs: Amount spent, results, cost per result, ROAS Storytelling KPIs: Frequency, CPM, CTR, CPC, hook rate, hold rate, watch time Primary KPIs determine winners. Storytelling KPIs explain WHY they won. Ex: Frequency shows scalability (when it hits 3 to 4 in a few weeks, creative may be tapping out). Hook rate reveals attention grabbing power. Hold rate and watch time demonstrate ability to keep attention. Then she analyzes creative qualitative data The basics you're prob doing today like Format: Does the UGC style or static format affect performance? Creator: Is a specific person consistently delivering winners? Messaging: What specific words/hooks are working wel? Imagery: What visual elements are driving engagement? Then she maps messaging to the user journey You need to have the right creative mix From every stage of awareness Ex: Unaware stage: "Hate doing your makeup" Problem aware: "Get a full eye look fast" Solution aware: "Our $14 eyeshadow stick beats the $34 one" She tracks EVERY test with these - Initial hypothesis (why run this test?) - Performance vs. account benchmarks (% better/worse vs AVG) - Detailed messaging analysis (which hooks worked and why) - Demographic breakdowns (which age groups responded) - Placement analysis (where it performed best) - Concrete next steps (ex: scale budget, iterate, stop) Including competitor messaging changes Look for hyper specific patterns: Formats they double down on Visual approaches Using THIS reporting cadence 👇 WEEKLY Last 7 days top performers, test updates, action items MONTHLY Creative retros with full test breakdowns, competitor tracking QUARTERLY Format analysis, product comparison, agency/creator benchmarking Final words from Dara: "Being data driven does not just mean looking at the numbers. The people behind those metrics are individuals – that's why messaging analysis and understanding where they are in their journey is the most important qualitative data to making creative that converts" -- 👋 P.S. Want more content like this? Get our Motion newsletter Thumbstop (Read by 47,000+ marketers every Sunday)

Spending money doesn’t guarantee results. Many businesses make this mistake. I worked with a client. They were excited to run ads. They invested heavily in Meta Ads. Clicks were coming in. But leads were low. Conversions? Almost zero. They thought the ads were broken. They tried changing creatives. They tried changing audiences. Nothing seemed to work. Then I asked one question: “Do you have KPIs?” They looked confused. They didn’t have any. They were running ads blindly. Without KPIs, you can’t measure success. Without KPIs, you can’t optimize. Without KPIs, you don’t know what works. Every campaign needs a goal. Every goal needs metrics. Here’s what we track: → Awareness: IMP, REACH, FRQ, ARL, CPM → Engagement: CTR, ENG, VV, ER, CPC → Leads: LEAD, CPL, CVR-L, FORM, CTA → Conversions: CVR, CPA, ROAS, AOV, REV → Retention: RP, CLV, CPE-R, FR, NPS Once we aligned budget with KPIs, results improved. The same spend suddenly worked smarter. Every dollar had purpose. Every campaign had direction. We could see what worked. We could scale winning ads. We could stop wasting money. Lesson: → Always define KPIs before spending. → Budget alone is not enough. → Objective + Metrics = Growth. If you run Meta Ads blindly, you’re leaving money on the table. Start tracking KPIs today. Your results will thank you.

MER is Lying to You About Your Marketing Performance Here’s the uncomfortable truth: Most brands measure marketing efficiency with MER (Marketing Efficiency Ratio): → Total Revenue / Total Ad Spend Seems logical. But it’s fundamentally flawed. The Problem: MER blends new customer acquisition with retargeting. You’re averaging a $200 CAC with a $20 retargeting cost and calling it “marketing efficiency.” That’s like measuring your marathon pace by averaging sprints with walking breaks. The Solution: Three Better Metrics 1. NCMER (New Customer MER) New Customer Revenue / New Customer Ad Spend How to calculate on Meta: • Build exclusion audiences (existing + engaged customers) • Use breakdown feature to see spend by cohort • Isolate new customer spend vs. revenue • Not perfect, but 10x more accurate than blended MER Google? Define existing customers and target new only. 2. RCMER (Returning Customer MER) Returning Customer Revenue / Returning Customer Ad Spend Now you can actually judge if your retargeting is efficient or just cannibalizing organic repeat purchases. 3. CMER (Contribution Margin Efficiency Ratio) (Revenue - All Variable Costs) / Total Marketing Spend Variable costs = COGS + fulfillment (pick/pack/shipping) + credit card fees + any other variable expenses. This shows real dollars available after covering variable costs. The king metric. Different KPIs for new vs. returning is essential. Reactivating customers should be 2-10x more efficient than acquisition. MER hides this completely. The 2026 Standard: Stop reporting MER and AMER (blended metrics that mask reality). Start reporting NCMER, RCMER, and CMER separately. Give your marketing team, and your business, actual visibility into what’s working.

B2B companies dramatically overspend on paid search with very low ROI because the reports & metrics they use ALLOW IT to happen. All you need to measure is two core revenue metrics: 1. $ Closed Won Revenue : $ Ad Spend (Lagging) Example: For every $1 we spend on Google ads, we get $2.20 in revenue. You should be targeting an absolute minimum of 1:1. Very few B2B companies I interact with ever get this minimum baseline metric. 2. $ HIRO Pipeline : $ Ad Spend (Leading) Example: For every $1 we spend on Google Ads, we get $10 in HIRO pipeline. Our HIRO win rate is 25% historically, so we can project forward that we’ll get approx $2.50 in revenue for every $1 investment in Google Ads. ___ This will immediately tell you whether your investment in paid search is working (Paid Search is one of the Top 3 largest annual Marketing expenditures at most B2B companies). Then, break down these metrics by each core campaign group: 1. Branded 2. High Intent Non-Branded 3. Low Intent Non-Branded 4. Competitor With this view, you’ll probably see that the blended ROI you see on paid search is actually being propped up by Branded keyword conversions that would’ve happened anyway, while non-branded and competitor campaigns are bleeding big losses & negative ROI. __ If B2B companies evaluated their paid search investment through this simple, logical lens, they would spend 50-75% less on paid search every month. Because that investment is clearly not driving actual business outcomes or positive ROI when evaluated through this lens. Which would create a large additional budget that could be deployed to much more effective GTM programs. #b2b #marketing #google #gtm #sales p.s. Paid search is a 100% demand capture channel. By definition, if someone makes a search, it's a signal of intent. The only appropriate way to measure demand capture is how much of that intent you've captured into sales meetings, pipeline, and revenue. Don't overcomplicate it. p.p.s. You don't need any fancy technology to do this. Implement persistent UTMs and track it to opportunities in Salesforce against the converting contact.

ROAS = Really Over-estimating Ad Success Here's how to fix it: It doesn't matter how much return your ads make if the sales were going to happen anyway. You need to look at the incremental return on ad spend (iROAS). The 'i' really matters. It means you're trying to measure sales caused by advertising, (using test <> control methodology) rather than just counting sales regardless of causality. Given how much is spent in performance this is probably the single biggest step the advertising industry can take in 2025 to improve effectiveness. Analytic Partners found 35 cents from every $1 spent on advertising is wasted due to optimizing exclusively to last click metrics like ROAS. That wastage is advertisers paying for existing sales. When you're next shown ROAS results ask where's the 'i'? iROAS is just the start. Consider the full picture: - What's the value of incremental sales you're driving? - What's the cost factoring non-media costs (creative production etc)? - What's the cost of goods sold (production, returns etc)? - How much incremental profit are you driving? - What's the long term incremental impact? Incrementality should be non-negotiable in 2025.

The correlation between 𝐀𝐂𝐎𝐒 and 𝐓𝐨𝐭𝐚𝐥 𝐀𝐂𝐎𝐒 (TACOS) is often debated in our industry. But if we step back and look at what's happening behind the metrics, we can identify the source of confusion and put this debate to rest. 𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐂𝐨𝐫𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧 🌐 𝐀𝐂𝐎𝐒 (Advertising Cost of Sales) measures the efficiency of your ad spend by comparing your ad spend to the revenue generated from ads. 𝐓𝐀𝐂𝐎𝐒 (Total Advertising Cost of Sales), on the other hand, considers your total revenue, including organic sales, giving a more comprehensive view of your ad efficiency. 𝐒𝐭𝐫𝐨𝐧𝐠 𝐂𝐨𝐫𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧: If your ad campaigns are well-structured and driving truly 𝐢𝐧𝐜𝐫𝐞𝐦𝐞𝐧𝐭𝐚𝐥 sales (i.e., driving sales that wouldn't have happened organically), there should be a direct correlation between ACOS and TACOS. Efficient ads boost both metrics. 𝐑𝐞𝐚𝐥-𝐖𝐨𝐫𝐥𝐝 𝐈𝐧𝐬𝐢𝐠𝐡𝐭 🧠 We managed a brand where we saw ACOS double while TACOS decreased 30%. How? The previous management had gross organic cannibalization (~50% of all spend was going to VCPM Sponsored Display retargeting campaigns! 😱) By refining our sales attribution to avoid cannibalization and focusing on truly incremental sales, we made ACOS "real" again. 𝐊𝐞𝐲 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬: 1. 𝐀𝐯𝐨𝐢𝐝 𝐂𝐚𝐧𝐧𝐢𝐛𝐚𝐥𝐢𝐳𝐚𝐭𝐢𝐨𝐧: Ensure ads aren’t stealing organic sales. 2. 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐍𝐨𝐧-𝐁𝐫𝐚𝐧𝐝 𝐊𝐞𝐲𝐰𝐨𝐫𝐝𝐬: Drive new, incremental traffic. 3. 𝐂𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭 𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠: Regularly review search term reports to optimize campaigns. By understanding and leveraging the correlation between ACOS and TACOS, you can gain a clearer picture of your ad efficiency and overall business health. Don’t get swayed by the myth that ACOS is just a vanity metric. When campaigns are created properly, ACOS becomes a vital part of the bigger picture. #amazonads #amazonppc #amazonbusiness #fba #ppc #bidoptimization

Most banks spend millions on marketing. Almost none can prove it generated a single deposit. Our clients track 3 simple metrics and have generated $25B in balance-sheet growth. Here’s how - and what they had to say: I’ve been on both sides of this table. As a 2x bank CMO, I watched peers struggle to justify marketing budgets. Now at Infusion, I see which banks actually grow - because they measure what matters. It’s not budget size. It’s 3 key metrics: 1. Cost per funded account (not leads) Most banks track leads. But leads don’t hit the balance sheet. Steven Mertz, EVP at People First FCU, put it best: “I can attest to their ability to pinpoint results down to the member. If you are looking for a different approach to marketing it’s worth the conversation.” That approach? Tracking funded accounts. Connect your CRM to campaign data. Tag every source. Stop celebrating vanity metrics. 2. Balance impact at 90 days New accounts are great. But not all accounts are equal. Some fund your growth. Others drain resources. Kelly Burdette, SVP at Bank Independent: “Great results from a great team. Appreciate all that Infusion does for us.” The difference comes from measuring balances over time, cutting campaigns that attract low-value households, and doubling down where deposits stick. 3. Retention vs. walk-ins New accounts are only valuable if they stay. Our data shows marketing-acquired households retain 13% better in year one than walk-ins. Bill DeWitt shared his experience: “As a client who has benefitted greatly from the Infusion Team’s hard work and expertise... we look forward to helping you hit $30B.” Retention is where efficiency and quality compound into sustainability. These 3 metrics work together: Cost per funded account = efficiency Balance impact = quality Retention = sustainability That’s how our clients have collectively generated $25B in growth. Banks defending budgets measure clicks. Banks growing measure dollars. Your CFO doesn’t care about click-through rates. Your board cares about deposits, loans, and fee growth. When you shift from vanity metrics to value metrics, marketing becomes a growth engine. At Infusion Marketing, we don’t just promise it. We only get paid when we deliver it. Ready to measure what matters? Reach out to us.

What’s the best North Star metric for your marketing program? Contribution Margin? MER? LTV:CAC? Literally, none of them. At the executive level, the real North Star is always net profit. That’s what the board cares about. That’s what determines company valuation. But most marketing teams never see that number. They’re asked to "drive profitable growth" while working with data from in-platform dashboards that don’t reflect true business outcomes. So we compromise. We track revenue, but that ignores margin. It rewards you for selling the wrong products. Then we move to MER (Marketing Efficiency Ratio) or Contribution Margin, which are both improvements from platform metrics but a step down from net revenue or profit. But those metrics are reactive. You only see changes after they happen. They tell you what happened, not why. The most effective marketers do something different. They stop looking for a perfect, all-in-one metric. They build a hierarchy of metrics instead. What is a metric hierarchy you may ask? Well, I'll tell you. It’s a layered system where each metric plays a different role. They build on each other. The lower levels help you influence the higher ones. Here’s a simplified version: -> Top layer (True North Star): Net Profit, EBITDA --> Holistic Marketing Program Efficiency: Contribution Margin, MER, GPLTV:CAC ---> Incremental Contribution: Channel-level incrementality like iROAS, iCPO, incremental cost per new customer, CPIA) ----> Ad Channel Performance: Media metrics (CPM, CTR, CVR, ROAS, GPT etc.) Each layer gets more tactical as you move down, but that doesn’t mean it’s less important. These are the levers you can actually pull. CPM, CTR, and CVR are often dismissed as vanity metrics. And on their own, they don’t mean much. But together, they help diagnose performance issues. If CTR drops, your creative might be stale. If CVR is low, maybe the landing page isn’t working. These are your early warning signs. ROAS sits one layer up, but it can be misleading too. Especially when platforms over-attribute conversions or mix in branded traffic. That’s why metrics like GPT (gross profit per transaction) or iROAS (incremental return on ad spend) are more reliable. They help show whether the revenue was both profitable and caused by the ad spend. Let’s say your MER target is 3x. That doesn’t mean every platform needs to hit 3x ROAS. Maybe Meta has an iROAS of 4x and Google is at 1.75x. Now you know to maximize MER you need to set ROAS goals of: ((MER GOAL) / Platform Incrementality Factor = New ROAS Goal) The key is knowing which platform is driving actual contribution. These tactical insights inform smarter ROAS targets. That affects MER, which affects contribution margin, which ultimately impacts net profit. It all rolls up. But you need to start from the bottom and work your way up.

Too many advertisers obsess over one metric in isolation: ROAS, CTR, MER, etc. But Facebook ads don’t work in silos. To find and fix performance issues, you need to look at all the metrics together. Here’s how I do it. These are the 9 metrics I track, why they matter, and when they matter: Top 3 for General Business Performance: 💥 Cost Per Purchase This has to fit within your unit economics. If it’s too high, you’re losing money on every sale. A good campaign is profitable, period. 💥 ROAS (Return on Ad Spend) This shows whether your clicks are converting into valuable paying customers. It’s your direct line to revenue performance. 💥 Click-to-Purchase Conversion Rate (CVR) This metric bridges your ads and your website. Both should convert in the 1-2% range. If one is off, you know where to start optimizing. Top 3 for Ad Scalability: 🚀 Reach and Frequency For ads that have been live for a few weeks, these metrics highlight fatigue. A rising frequency means your ad is hitting the same people over and over instead of finding new ones. 🚀 Ad Set Purchase Volume Meta’s algorithm thrives on data. Hitting 7+ purchases per day per ad set (50+ per week) is critical for exiting the learning phase and unlocking better performance. 🚀 Cost Per New Customer Purchase Popsixle sends a separate bonus event for new customer purchases. This is a key metric for effectively running prospecting ads to scale up a business. Top 3 for Monitoring New Ad Creatives: 💣 CTR (Click-Through Rate) This is especially important for new ads in the learning phase. A CTR over 1.5% tells me an ad is doing its job of driving curiosity and clicks. 💣 Ad Quality, Engagement, and Conversion Rankings These rankings tell you how your creative performs across campaigns. Above average on all three dimensions is the standard of excellence. 💣 Incremental Reach Filter your campaigns to show only your new campaign and your previous top performing, top scaled campaign. Compare the reach of each campaign to the unduplicated reach in the summary to see if the new campaign is reaching incremental people. Summary: There’s no one metric that tells the full story. The magic happens when you connect the dots. What metrics do you rely on most to evaluate your Facebook ads?