PPC & Google Ads Glossary
The core advertising cost metrics, explained in plain English with formulas and examples.
- ROAS Return on Ad Spend
- ROAS measures how much revenue you earn for every dollar spent on advertising. It is the core efficiency metric for paid campaigns.
- ROAS = Revenue ÷ Ad Spend
- ROI Return on Investment
- ROI measures the profit generated relative to the amount invested. Unlike ROAS, it accounts for costs beyond ad spend.
- ROI % = (Profit − Ad Spend) ÷ Ad Spend × 100
- CPC Cost Per Click
- CPC is the average amount you pay each time someone clicks your ad. It is the primary cost driver in search advertising.
- CPC = Total Ad Spend ÷ Total Clicks
- CPM Cost Per Mille (per 1,000 impressions)
- CPM is the cost of showing your ad 1,000 times, regardless of clicks. It is the standard pricing model for awareness and display/social campaigns.
- CPM = Ad Spend ÷ Impressions × 1,000
- CPA Cost Per Acquisition (or Action)
- CPA is the average cost to acquire one conversion — a sale, signup, or lead. When the action is a lead, it is often called CPL (cost per lead).
- CPA = Ad Spend ÷ Conversions
- CTR Click-Through Rate
- CTR is the percentage of people who click your ad after seeing it. It is a key signal of ad relevance and creative quality.
- CTR % = Clicks ÷ Impressions × 100