Facebook advertising glossary: ROAS, CPL, CPA, CPM, CTR and the rest, in plain terms

The vocabulary of online advertising is built to impress. Yet every term names something simple, and only one thing really counts: knowing whether what you spend comes back to you.

Here are the terms you will run into, in the order you need them.

ROAS

ROAS measures the revenue generated for every euro spent on advertising.

ROAS = revenue generated ÷ ad spend

A ROAS of 3 means €3 taken in for €1 spent. It is the most quoted figure, and the most misleading, because it ignores your margin: €3 of revenue is not €3 of profit.

Break-even ROAS (or target ROAS)

This is the ROAS below which you lose money, and the one to remember. It depends only on your gross margin.

Break-even ROAS = 1 ÷ gross margin

At a 40% margin it is 2.5. A ROAS of 3 is therefore profitable, a ROAS of 2 loses you money even though it looks respectable. This threshold takes neither your fixed costs nor your fees into account: it gives the break-even point on advertising alone. ROAS in detail, with a real case.

ROI

ROI measures what you actually earn, after paying for everything: the advertising, and the fee of whoever runs it.

Net ROI = (gross margin − ad spend − fee) ÷ (ad spend + fee)

On the kitchen case published on this site, €21,800 invested (advertising and fee) produced €40,900 of net margin, a ROI of +188%. ROAS and ROI do not answer the same question, and must never be presented as two separate successes.

CPL (cost per lead)

CPL is the cost of getting a contact.

CPL = ad spend ÷ number of leads

It is a diagnostic indicator, not a result. A low CPL says nothing about the quality of the contacts: a lead who never answers is cheap and worth nothing. Cost per lead in detail.

Lead and qualified lead

A lead is a person who left their details. A qualified lead is a lead whose situation matches what you sell: right area, real project, compatible budget. You move from one to the other with questions asked in the form.

CPA (cost per acquisition)

CPA is the cost of getting a customer, not just a contact.

CPA = ad spend ÷ number of sales

It is the figure that really counts for a service business, and you work it out by tracing back to the signature.

CPM (cost per thousand impressions)

CPM is the price of showing your ad a thousand times.

CPM = ad spend ÷ impressions × 1,000

It reflects the competition for your audience and the perceived quality of your ad. When it climbs for no apparent reason, it is often a sign of an ad wearing out.

CTR (click-through rate)

CTR is the share of people who clicked after seeing the ad.

CTR = clicks ÷ impressions × 100

It tells you whether your ad makes people want to go further. A low CTR with plenty of impressions points to a creative or a message that does not hold.

Impressions and reach

Impressions count the number of times the ad was displayed. Reach counts the number of distinct people who saw it. One person seen three times counts as three impressions and one person of reach.

Frequency

Frequency is the average number of times a person has seen your ad.

Frequency = impressions ÷ reach

It climbs as your audience saturates. It is one of the first signs of ad fatigue, visible before the cost per result degrades.

Hook rate and hold rate

Hook rate is the share of impressions that led to at least three seconds of viewing. It tells you whether the start of the video stops the scroll.

Hold rate sets the longer views against the three-second views. It tells you whether the rest of the video keeps the promise of its opening.

The two are read together: a clickbait hook lifts the first figure and flattens the second.

Meta pixel

The pixel is a small piece of code on your site that tells Meta what visitors do: a page viewed, a purchase, a form sent. It relies on the visitor's browser, and so misses whatever that browser blocks. The detail is here.

Conversions API

It does the same thing from your server rather than from the browser, which avoids losing blocked events. It complements the pixel rather than replacing it. The detail is here.

Attribution

Attribution is the rule that decides which ad a sale is credited to. Meta credits itself with the sale if the person clicked an ad within a given window of time, for example seven days.

It is why Meta's figure and the one in your accounts almost always differ: Meta claims sales it watched happen without having caused them. The solid reference remains what you actually take in.

Learning phase

When you create or heavily change an ad set, the algorithm calibrates its delivery. Meta states it needs around fifty conversions a week per ad set to leave it. Below that, results swing widely and mean little.

Lookalike audience

A lookalike audience is built from a list of your existing customers: Meta looks for people who resemble them. It needs a contact list large enough to work.

Retargeting

Retargeting means showing an ad to people who have already interacted with you: watched a video, visited the site. On long purchases it is a campaign separate from prospecting, with a different message.

Campaign, ad set, ad

The campaign carries the objective. The ad set carries the audience, the budget and the schedule. The ad is the creative shown. Three levels, found in the ads manager.

Average order value and conversion rate

Average order value is the average amount of an order or a signed job. Conversion rate is the share of visitors, or contacts, who become customers. Both, combined with your margin, determine the cost per customer you can afford.

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Further reading: Why a pixel alone is no longer enough and Meta Ads for an e-commerce brand.

A figure in your account puzzling you? Book a 30-minute call. We set it against your margin.