What you are actually buying

An ad account produces dozens of numbers, most of which are diagnostic. A handful connect to money, and knowing which is which stops you optimising something that does not matter.

The chain

Impressions → clicks → conversions → value.

• CTR = clicks / impressions. A relevance signal, not a goal. High CTR on unqualified traffic is a bad outcome.
• CPC = what you paid per click. An input cost.
• Conversion rate = conversions / clicks. Mostly a property of your landing page and offer, not your ads.
• CPA = cost per conversion. The efficiency number for lead generation.
• ROAS = conversion value / cost. The efficiency number for e-commerce.

The two questions these answer

Volume and efficiency. They trade against each other constantly, and almost every account argument is really about which one is being optimised. Halving CPA while halving conversions is not obviously a win, and nobody says which they wanted until afterwards.

Agree the target before optimising: are we buying as much as possible at an acceptable efficiency, or as efficient as possible at an acceptable volume?

Impression share

The percentage of eligible auctions where your ad showed, split by what you lost to — budget or rank. This is the headroom metric: it tells you whether growth is available at all, and which constraint is binding. Lost to budget means add money. Lost to rank means fix bid or quality.

The number none of these give you

Incrementality — how many of those conversions you would have got anyway. Brand search is the obvious case: much of it converts with or without an ad. Platform-reported ROAS never answers this, because the platform cannot see the counterfactual. Geo holdout tests and brand-versus-non-brand splits are how grown-up accounts approach it.

Keep this in the back of your mind whenever a reported ROAS looks implausibly good.

What trips people up

• Optimising CTR as if it were revenue.
• Comparing CPA across campaign types with different funnel positions.
• Reporting platform conversions as company revenue. They are not the same number and finance will notice.

You have got this when

Shown an account, you ask what the target is and whether it is a volume or efficiency brief — before you look at any setting.