Understanding Business KPIs

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively you're achieving your business objectives. In digital advertising, KPIs are the targets you set to measure campaign success and guide decision-making. 

Every business and marketing campaign is unique, which makes establishing the right KPIs crucial for success. The key is aligning your KPIs with your specific business goals and defining what success looks like for your organization. 
 

Before selecting KPIs, ask yourself these fundamental questions: 

  • What is your primary business focus? Are you selling products, generating leads, or driving subscriptions? 

  • What does success look like for your business? Increased revenue, more customers, or brand awareness? 

  • What stage is your business in? Growth mode, profitability focus, or market expansion? 

 
Your answers will guide which KPIs are most relevant for measuring your campaign effectiveness. 
 

Main KPIs for your advertising campaigns 

For Criteo campaigns, common KPIs are ROAS, COS, or CPO. 

Return on Ad Spend (ROAS)

This KPI shows how much revenue you make for every dollar of ad spend. ROAS is expressed as a ratio, like 2:1. 

Example: If you spend $500 on ads and generate $1,000 in revenue, your ROAS is 2:1. 

When to use: Ideal for businesses focused on revenue growth and profitability measurement. 

Cost of Sale (COS) 

This shows ad cost as a percentage of sales revenue and is calculated by dividing ad spend by revenue driven. COS is expressed as a percentage. 

Example: $500 ad spend generating $1,500 revenue equals a 33% COS. 

When to use: Useful for businesses with established profit margins who want to maintain cost efficiency. 

Cost Per Order (CPO) 

This measures the cost to generate a single sale. It’s calculated by dividing your ad spend by the total number of conversions or orders. CPO is expressed as a dollar amount.   

Example: $500 ad spend generating 20 orders equals a $25 CPO. 

When to use: Perfect for businesses focused on customer acquisition and order volume. 

Other KPIs for your Campaigns  

After you’ve established your primary KPIs, you can consider some additional KPIs that marketers commonly use to measure campaign effectiveness. Some are used to measure awareness, while others are for performance: 

Awareness Metrics
  • Reach 
    The percentage of your audience that your campaign is influencing. 

    When to use: Brand awareness campaigns or new product launches.

  • Cost Per Thousand Impressions (CPM) 
    A standard reporting metric and pricing model for digital advertising. If you buy 10,000 impressions at a $2.00 CPM, it would cost $20. 

    When to use: Brand awareness campaigns or impression-based buying. 

  • Clicks 
    The number of clicks on your ad. 
    When to use: Measuring engagement and initial interest.

  • Click-Through Rate (CTR) 
    The percentage of users who clicked your ad from the total impressions. If you had 1000 impressions and 10 clicks, your CTR is 1%.  
    When to use: Measuring ad relevance and creative effectiveness. 

Performance Metrics 
  • Conversion Rate (CR): The rate at which buyers or leads convert to the next stage, whether through a purchase or a subscription. 
    When to use: Measuring campaign effectiveness and user experience quality.

  • Click-Through Conversion Rate (CTR%): The percentage of users who see your ad, click, and convert. 
    When to use: Evaluating direct response campaign performance and optimizing ad creative and landing page alignment.

  • View-Through Conversion Rate (VTC%): The percentage of users who see your ad, do not click, but return later to your site to convert. 
    When to use: Understanding the full impact of display advertising.


Balancing Efficiency vs. Scale 

KPIs shouldn't be evaluated in isolation. The most successful campaigns balance two critical factors: 

  • Efficiency: Achieving your target KPIs at the lowest possible cost.  

  • Scale: Reaching enough volume to drive meaningful business impact. 

Further, consider these factors when setting realistic KPI targets: 

  • Operational costs and profit margins. 

  • Shipping and fulfilment costs. 

  • Customer lifetime value. 

  • Market competition and seasonality. 

  • Available budget and resources. 
     

A campaign that achieves both efficiency and scale will maximize your return on investment while reaching high-value users with relevant messaging at optimal times.