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How to tell if your ads are working

By James Lord · Updated · 1 min read

Ad platforms will give you hundreds of numbers, and most of them don't matter to your business. Here's how to set up tracking you can trust, and the handful of measures that tell you whether your ads are making you money.

Track the action that matters

Decide what a result is for your business: a purchase, a booked call, a trial started, an enquiry sent. Then make sure the ad platforms can see it, using their tracking on your site and, where you can, a connection from your own systems. Without it, the platforms chase clicks, which are cheap and often worthless.

Ignore the vanity numbers

Impressions, reach, likes and clicks tell you an ad is being seen. They don't tell you it's working. A cheap click from someone who never buys costs more than a pricier one from someone who does.

Watch cost per result, then cost per customer

Cost per result (per enquiry, booking or trial) is the platform's view. Cost per customer is yours: what you spent for each person who actually paid. The gap between the two tells you how good your leads are.

Know your payback

Compare what a new customer pays you over time with what it cost to win them. If you earn it back quickly and keep earning, the ads are working, even when the platform's numbers look ordinary.

Expect the numbers to disagree

Ad platforms, analytics tools and your own sales records rarely match, because each counts differently. Pick one source of truth for decisions, usually your own sales records, and use the others for direction.

Look at weeks, not days

Results bounce around from day to day. Review them weekly, compare like with like, and give changes time to settle before you judge them.

Questions

What's a good return on ad spend?

It depends on your margins. A business with high margins can profit at a return that would lose money for one with thin margins. Work out your break-even first.

Why don't the sales in my ad account match my own records?

Platforms count sales over different time windows and can't always see every sale, especially when people switch devices. Expect differences and judge the trend.

How long before I know whether an ad works?

Long enough to collect a meaningful number of results. For most small accounts that's a week or more, not a day.

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