But what does it mean?

Digital advertising glossary

How to speak 'digital marketing'.

- a Tailored Guide

ROAS = return on ad spend

The simplest way to measure the profitability of your ad channel, which we like to measure as a ratio for our clients. For example, if you were to spend $1,000 on paid social advertising and generated $2,000 in revenue, your ROAS would be x2. So for every dollar you spent, you earned an additional $1 in revenue.

CPM = cost per mile (cost per thousand impressions)

This metric will show you how many times your ad has been viewed and allows us to compare the relative cost of reaching a specific audience across different platforms and ad campaigns. For example, if your ad campaign had a CPM of $10, you are paying $10 for every 1,000 views of your ad.

CPA = cost per acquisition (lead)

This is the cost to acquire a new customer, or potential customer to your business, associated with our desired outcome from an ad like subscribing to your email newsletter. This will help your business immensely with understanding the true cost of a new customer. At Tailored, we work hard to achieve a low CPA to improve your ROI and maximise your profitability.

CPA is calculated by dividing the total cost of acquisition by the number of conversions we achieve. For example, if we spend $1,000 on advertising, and acquire 150 new customers through a campaign, the CPA would be $6.67. So on average, it costs under $7 to acquire a new customer.

CPC = cost per click

We use this metric in digital advertising to understand the cost each time a consumer clicks on an ad and optimise our bidding strategies. The calculation is pretty straightforward - we divide the total cost of an ad campaign by the number of clicks obtained. For example, if you spend $500 on an ad campaign and receive 1,000 clicks, the CPC equals 50cents.