The metrics that matter
for your business model
E-commerce, SaaS, lead generation: three ways to make money, three ways to measure. The 45 metrics I use to run Google Ads and Meta Ads accounts after 5+ years, explained and connected.
- Ad platforms show the same columns to everyone. Your business model decides what actually matters.
- E-commerce: margin calls the shots. ROAS to steer, POAS to tell the truth, break-even ROAS as the floor.
- Lead gen: CPL means nothing without a closing rate. Conversion lag can reverse your conclusions.
- SaaS: CAC is judged against LTV, not the first payment. Churn and payback decide the scaling.
3 reading levels, 3 time horizons
Every metric belongs to one of 3 levels. The classic trap: making budget decisions (business level) with platform metrics. A rising CTR pays no invoices.
| Level | What it measures | Examples | Horizon |
|---|---|---|---|
| Platform | The advertising mechanics | CTR, CPC, Quality Score, Impression Share | The week |
| Funnel | From click to transaction | CVR, CPA, CPL, closing rate | The month |
| Business | The money actually earned | POAS, MER, CAC, LTV, payback | The quarter |
E-commerce: margin calls the shots
On most e-commerce accounts I audit, everything is steered by ROAS. ROAS thinks in revenue: at low margin, it flatters. Example: 100 € sale, 60 € product cost, 20 € ad spend.
The 15 e-commerce metrics
ROAS
Return on ad spend: a ROAS of 4 means 4 € of revenue per euro invested. The day-to-day steering metric, available everywhere in real time. Its limit: it talks revenue, never profit.
Full definition in the glossary →Break-even ROAS
Your profitability floor. At 40 % gross margin, break-even is 2.5. Below it, every sale costs you money even if the account shows conversions everywhere. It is the first number I compute on any account I take over.
Full definition in the glossary →POAS
The real profit per euro of advertising. It takes more work (feeding product margins into the platform), but it tells the truth: on a catalog with mixed margins, two campaigns at the same ROAS can have opposite profitability.
Full definition in the glossary →AOV (average order value)
It conditions everything: a higher average order value allows a higher CPA at equal profitability. Before raising budgets, raising the AOV (bundles, free-shipping threshold, cross-sell) is often the cheapest lever on the account.
CVR (conversion rate)
The bridge between traffic and sales. A CVR dropping at constant traffic points to the site (speed, product page, checkout), not the campaigns. Segment by device: a marked mobile/desktop gap usually reveals a mobile experience issue.
Cart abandonment rate
Where the funnel leaks most: the majority of carts never become an order. Every point you win is revenue gained without one extra euro of media. Shipping fees discovered late, forced account creation and a slow checkout are the first three suspects.
CAC
The cost of a new customer. The nuance vs CPA: CPA counts every conversion, returning buyers included. A stable CPA can hide a degrading CAC when the share of repeat purchases grows.
Full definition in the glossary →CLV (customer lifetime value)
What a customer brings over the whole relationship. Example: 80 € basket, 3 orders a year, 60 % retention (2.5 years of lifetime): CLV = 600 €. It is what justifies, or not, accepting a CAC above the first-order margin.
LTV:CAC : the key formula of customer profitability
For every euro spent acquiring a customer, how much comes back over the whole relationship. It is the global ROAS of the customer relationship, not of one campaign: the CLV (metric 08) on top, the CAC (metric 07) below. At 3, every euro invested returns three times the value; at 1, you just get your money back; below that, each new customer destroys value. A weak ratio always has one of two causes: the product does not retain, or acquisition costs too much.
Full definition in the glossary →Repeat Purchase Rate
CLV made concrete: the share of customers who come back to buy. It is what turns an aggressive CAC into a good investment. With weak repeat purchase, all acquisition has to be profitable on the first order, which caps the bidding.
Contribution margin
What actually stays on each order once everything is paid: product, shipping, payment fees, advertising. The only number that says whether an order builds or erodes the business, line by line.
RPV (revenue per visitor)
CVR and AOV combined into a single number: what each visitor sent to the site is worth. Ideal to compare traffic sources: an audience that clicks a lot but buys small shows up immediately.
First-order ROAS
The immediate profitability of a new customer, with no bet on the future. It answers a strategic question: can you acquire at a loss on the first order and recover on repeat purchases? Without solid repeat behavior (metric 10), the answer is no.
MER
The zoom-out. No attribution, no debate between platforms: all the revenue, all the spend. If your platform ROAS climbs while your MER declines, your platforms are claiming sales that would have happened anyway.
Full definition in the glossary →Marginal ROAS
The ROAS of the last euros invested, not the account average. The first 1,000 € of budget return more than the next 1,000 €: scaling "because the average ROAS looks good" means buying the next euros at the price of the previous ones.
Steer with ROAS against your break-even floor, check the truth with POAS and MER, and never scale on an average ROAS.
Lead gen: CPL means nothing on its own
A 60 € CPL is excellent for a firm closing 15,000 € projects, and unsustainable for a 500 € offer. The number alone says nothing: it needs the value of a customer and the closing rate next to it.
The 15 lead gen metrics
CPL (cost per lead)
The column everyone watches. Useful daily to compare campaigns and audiences, as long as you never read it alone: a CPL going down while quality erodes is fake good news.
Customer value
The starting point of every lead gen calculation. What a signed customer is really worth, in margin, not revenue. Without this number, there is no way to say whether an 80 € lead is expensive or cheap.
Ideal CPL: the queen metric of lead gen
The maximum CPL you can pay while staying profitable. Example: 2,000 € customer, 40 % margin, 25 % closing: 200 € maximum per lead. Until this ceiling is set, no budget discussion has a basis. Two levers when your real CPL exceeds it: optimize the campaigns, or improve the closing (the second is often faster).
Full definition in the glossary →Qualification rate
The share of forms that become real opportunities. Generating 200 forms with 2 customers inside costs more than 50 forms with 5 customers. It is the first filter between advertising volume and commercial reality.
CPQL (cost per qualified lead)
The real steering column. Two campaigns at the same CPL can have CPQLs three times apart depending on traffic quality. This metric, not raw CPL, should drive the budget arbitrage between campaigns.
Lead Score
Lead quality graded on your criteria: company size, budget, urgency, source. Its real power in Paid Media: sending different values back to the platforms depending on the score, so bidding learns on quality instead of volume.
Cost per opportunity
The stage between the qualified lead and the signed customer: what a real sales conversation costs. Closer to revenue than the CPL, faster to measure than signed revenue: often the best steering compromise on long cycles.
Closing rate
The silent multiplier of the account: going from 25 % to 35 % closing raises your acceptable CPL by 40 % without touching the campaigns. The best Google Ads consultant on a lead gen account is sometimes the 5-minute lead callback.
Landing page CVR
The yield of the page receiving the traffic. Doubling this rate halves the CPL at constant budget: that is arithmetic. Message, social proof, form length and load speed weigh more than a tenth bidding tweak.
Lead-to-customer rate
The end-to-end view: out of 100 forms, how many become customers. It absorbs qualification and closing into a single number, and translates any customer target into a lead volume to generate, hence a budget.
Average conversion delay
The metric that sets your analysis window. If your CRM takes 8 weeks to qualify a lead, a 30-day analysis is not cautious, it is wrong: conversions from recent clicks have not had time to exist yet.
Revenue per lead
Quality and value summarized in one number. It compares campaigns generating leads of different natures: a campaign with a higher CPL but double the revenue per lead is the better of the two, which the CPL alone hides.
Pipeline generated
What the campaigns put into the sales pipeline before any signature. On a 6-month cycle, it is the leading indicator that defends a budget without waiting for revenue: tomorrow's revenue reads in today's pipe.
Net profit margin
The final judge: what stays once everything is paid, acquisition included. An account can produce leads at a fine CPL and erode margin when sales processing costs grow faster than revenue. The number that ties Paid Media to the actual health of the business.
Advertising ROI
The lead gen zoom-out: the revenue actually signed against the spend, on a window aligned with the sales cycle. The number that speaks to management, and the one that justifies (or not) next year's budget.
Compute your ideal CPL, steer on the cost per qualified lead rather than volume, and never conclude on a window shorter than your sales cycle.
SaaS: CAC is judged over time
Your revenue arrives in monthly installments: the first payment says almost nothing about a customer's value. A 100 €/month subscription with 2 % churn is worth about 5,000 € over its lifetime: paying 400 € to acquire that customer is rational, while the first payment covers a quarter of it.
The 15 SaaS metrics
MRR
The monthly pulse of the business: all active subscriptions normalized to the month. On the acquisition side it is the basis of everything: customer value, acceptable CAC and payback all derive from it.
ARR
The annualized view of recurring revenue. The number for projections and valuation, and the one that authorizes a much higher CAC than one-shot models: a 1,200 € ARR per customer justifies a 300 to 400 € CAC.
ARPU
Average revenue per customer per month. It segments everything: a 29 € plan and a 299 € plan cannot share the same target CAC or the same campaigns. The building block of the LTV calculation.
Expansion MRR
Upgrades, added seats, options: the revenue that grows without acquisition. The stronger the expansion, the higher the CAC you can afford: the installed base funds the conquest of new customers.
Churn rate
Monthly attrition, and the most under-used lever: customer lifetime = 1 / churn. 5 % churn: a customer stays 20 months. 2 %: 50 months. Reducing it multiplies customer value without one extra euro of advertising.
MRR churn
Churn in euros, not customers. The nuance matters: losing three small accounts or losing your biggest customer is the same customer churn and a very different revenue churn. It says what acquisition has to compensate every month.
Net MRR churn
The net churn once upgrades and upsells from existing customers are counted. A negative net MRR churn means the installed base grows on its own: every acquisition euro adds to growth already secured.
Trial-to-paid rate
The verdict on acquired traffic quality: trials that never convert to paid signal targeting or an ad promise misaligned with the product. Two sources at the same cost per trial can convert three times apart.
Activation rate
The share of signups who actually use the product: first key action, setup completed, value perceived. Activation predicts retention far better than the signup: the frontier between a future customer and a curious visitor.
CAC
The cost of a paying customer, not a signup. Counting free accounts in the denominator produces a flattering, wrong CAC: churn from never-activated free users will blow it up three months later.
Full definition in the glossary →Cost per activated customer
Activation is the signal to feed the bidding algorithms: optimizing on free signups means optimizing on volume that churn will sort out for you, at full price. This is the acquisition cost that actually predicts future MRR.
LTV
What a customer returns in margin over their whole lifetime. With a 100 € ARPU, 80 % margin and 2 % churn (50 months of lifetime): LTV = 4,000 €. The number that defines the rational maximum CAC.
LTV:CAC
The long-term profitability ratio of acquisition. At 3, each euro invested returns three over the customer lifetime; at 1, you break even; below that, each acquired customer destroys value.
Full definition in the glossary →Payback period
The time for a customer to pay back their acquisition cost. 120 € CAC, 40 €/month margin: paid back in 3 months. The speed metric: it decides how fast you can reinvest without cash-flow issues.
Cost per euro of new MRR
What each euro of recurring revenue won by advertising costs. The same trade-off as the payback, seen per euro of MRR: it compares campaigns and channels on what they really build, recurring revenue, not signups.
Judge your CAC against the LTV and the payback period, never against the first payment, and train the bidding on an activation signal, not on signups.
The summary table
| E-commerce | Lead gen | SaaS | |
|---|---|---|---|
| North Star | Margin generated | Qualified leads at sustainable CPL | CAC paid back fast |
| Daily steering | ROAS (break-even floor) | CPQL vs ideal CPL | Cost per activated customer |
| Economic truth | POAS, contribution margin | Closing, revenue per lead | LTV:CAC, payback |
| Zoom-out | MER | Advertising ROI | Net MRR churn |
| The trap | Scaling on average ROAS | Window shorter than the sales cycle | Optimizing free signups |
| The formula | BE ROAS = 1/margin | CPL = value × margin × closing | Lifetime = 1/churn |
If you keep one sentence: the platform measures conversions, your business measures margin over time; your steering job is the bridge between the two.
FAQ
What is the most important metric in Google Ads?
There is no universal one: it depends on how your business makes money. In e-commerce, the margin generated (POAS rather than ROAS alone); in lead gen, the cost per qualified lead compared to your ideal CPL; in SaaS, the CAC against the LTV and its payback speed.
ROAS or POAS: which one should I follow?
Both, at different levels. ROAS serves the day-to-day steering because it is available everywhere in real time. POAS serves the budget decisions because it includes your product costs. An account steered on ROAS alone mechanically over-invests in low-margin products.
What ROAS should I target in e-commerce?
Your floor can be computed: break-even ROAS = 1 / gross margin. 40 % margin: floor at 2.5; 25 % margin: floor at 4. The target sits above the floor depending on your profitability goal. A "good ROAS" in the absolute, without knowing the margin, does not exist.
How do I know how much to pay per lead?
With the ideal CPL formula: customer value × margin × closing rate. Example: 2,000 € customer, 40 % margin, 25 % closing: 200 € max per lead. If your real CPL exceeds this ceiling, two levers: optimize the campaigns, or improve the closing.
Why do my B2B campaigns seem to convert nothing?
Check your analysis window first. On a long sales cycle, conversions from a click appear weeks later: a 30-day analysis can show zero where the 6-month reality shows dozens of customers. Always align the window with your average conversion delay before concluding.
Which metrics steer your account?
Let's look together at what your campaigns measure today, and what they should measure.
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