Week 9

Are Your Ads Actually Making Money?

Money’s leaving your account. But is any of it coming back?

Most people have no idea. They’re excited about clicks and impressions while bleeding cash. This week is about knowing whether your ads work.

What I’ve Learned Watching People Fail at This

They track the wrong stuff.

I’ve watched someone celebrate 10,000 impressions and a 5% CTR, then realize they spent $500 and made zero sales. Impressions alone don’t pay.

They don’t track conversions at all.

One person ran ads for three months “because traffic went up.” When we finally set up tracking, 80% of their budget went to bot clicks and people searching for free stuff. $200 wasted.

They trust Google’s dashboard.

Google shows you impression share and top-of-page rate. Know what’s missing? Profit. Google makes money when you spend, whether you make money or not.

They can’t answer basic questions.

“What’s your cost per conversion?” “Uh… I don’t know.” “Which keywords convert?” “Not sure.”

You can’t fix what you can’t see.

The winners set up tracking first.

The people who succeed know their numbers. They kill bad campaigns fast. They scale what works. Everyone else just keeps “testing” forever.

What’s a Conversion?

Whatever action you want after someone clicks your ad.

E-commerce: Purchase. Add to cart. Product page view.

Lead gen: Form fill. Phone call. Email signup.

Content sites: Newsletter subscription. Account creation.

Pick the one that leads to money, then track it.

The Only Metrics That Matter

Conversions

How many people did the thing you wanted?

Cost Per Conversion (CPA)

Total spend ÷ conversions = what you pay per customer.

Example: $500 spent, 10 conversions = $50 each.

If your customer is worth $40 and you’re paying $50, you’re losing money.

Conversion Rate

(Conversions ÷ clicks) × 100

Example: 10 conversions from 200 clicks = 5%

Low conversion rate = bad landing page or wrong audience.

Return on Ad Spend (ROAS)

Revenue ÷ ad spend

Example: Made $2,000 from $500 = 4x ROAS

This tells you if you’re profitable. 4x means you made $4 for every $1 spent. 0.5x means you’re bleeding cash.

Click-Through Rate (CTR)

(Clicks ÷ impressions) × 100

Tells you if your ad is compelling. But high CTR with low conversions just means you’re paying for useless clicks.

Metrics That Don’t Matter (Yet)

Impressions: Only matters for brand awareness campaigns. You’re not doing those.

Impression share: Useful for understanding lost opportunity, but not actionable unless you have unlimited budget.

Quality Score: Helps lower your CPC, but it’s not the goal.

Average position: Paying more to be #1 when #3 converts better is dumb.

Focus on conversions first. Use these to diagnose problems later.

Common Mistakes

Celebrating clicks instead of conversions “I got 500 clicks!” Did any of them buy? No? You wasted money.

Ignoring device performance One person’s campaigns looked okay overall. But desktop was profitable and mobile was burning cash at 0.5% conversion rate. They were spending 60% of budget on mobile.

Wrong conversion window Someone clicks Monday, converts Thursday. If your window is 1 day, you won’t see it. Use 7-30 days.

Tracking page views instead of purchases “I’m tracking thank-you page views!” People can navigate there without buying. Track the actual purchase.

Making decisions on 2 data points “Keyword A got 2 conversions, B got 0, so I’m pausing B.” You need 50-100 clicks minimum before making changes.

What Good Looks Like

Typical conversion rates:

E-commerce: 2-4%
B2B lead gen: 2-5%
Legal: 5-10%
Finance: 5-10%

Cost per conversion:

Low-ticket e-commerce: $10-$50
High-ticket e-commerce: $50-$200
B2B leads: $50-$500
Legal/financial: $100-$1,000+

Know your numbers relative to customer value. $50 CPA kills you if you’re selling $20 products. It’s great if you’re selling $5,000 services.

Am I Profitable?

Revenue per conversion – Cost per conversion = Profit

Positive? Scale up. Negative? Fix it or kill it.

Example 1:

Order value: $100
CPA: $30
Profit: $70
Scale this.

Example 2:

Order value: $50
CPA: $75
Profit: -$25
Kill this.

Next Week: Making It Better

You know what to measure. Next week we’ll cover optimization—how to improve based on your data. A/B testing, bid adjustments, negative keywords, and when to kill campaigns versus give them more time.