Matt Paulson argues that 30-day Return on Ad Spend is the only metric that matters in advertising. Cost per lead is meaningless without knowing the revenue those leads generate. His benchmarks: break even in 60 days, hit 3× ROAS within a year.
The first one is, what advertising metrics do you care about most and why?
Yeah, there are a lot of metrics that you could care about. The one that I care about the most, like in our space, people will worry about cost per lead, and like that's not a good metric because it doesn't really matter what the cost is. It matters what you pay versus like what you get back. So for me, 30-day ROAS is very important. Like if I spend $100,000 on Google Ads or YouTube Ads during the month of May, I want to know by the end of June how much money did I spend on those people and then what did I make off them. Then like if I know that, like I know where my profitability curve is going to be over time. Typically I'm looking for a 60-day break-even. By the end of 12 months I'm looking for 3x ROAS on my ad spend. If I get those 2 numbers, I'm happy. And like everything else that's like underneath that of like— Cost per lead, activation rates, stick rates, sales, clicks, open rates, conversions, all of that really ties into your ROAS. That is the number to care about more than anything. Yeah. Because what I've learned is there are some channels where you can get really high quality leads. You might pay $12 for a lead. But you're like, the return is there. And there are other places where you're paying a dollar a lead and like you're not making any money at all. It's like you have to focus on just the revenue versus what you spent. And like some of the other numbers that people focus on are not important.
