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If you're still relying on ROAS, CPA, and other in-platform metrics to gauge the success of your marketing efforts, you may be setting yourself up for failure in the long run.
In today's privacy-first, omnichannel world, these traditional metrics simply don't cut it anymore.
They provide a narrow, often misleading view of performance that fails to account for the full customer journey and the metrics that truly matter for your business.
Here’s how our Head of Traffic Strategy, John Moran, puts it:
"ROAS doesn't matter. In-app CPA doesn't matter. Nothing matters because everything's going to attribute wrong. What does matter is your top line and bank account."
It's time for a fundamental shift in how we think about marketing measurement—a shift towards metrics that align with real business outcomes, not just in-platform performance.
Metrics like ROAS and CPA have long been the go-to for digital marketers looking to prove the value of their efforts.
But when you really dig into it, these metrics have some serious flaws:
1. ROAS & CPA only show a snapshot in time.
ROAS and CPA tell you how a specific campaign performed in a specific window, but they don't reflect the full customer journey or their lifetime value. A campaign with a high ROAS may drive a lot of one-time purchases but fail to create loyal, high-value customers.
2. In-Platform Metrics rely on inaccurate attribution.
Platforms like Facebook and Google are incentivized to take credit for as many conversions as possible, often leading to double-counting conversions or ignoring the impact of other touchpoints. You may think your Facebook ROAS is 5x, but the reality is likely much different.
3. They incentivize short-term thinking.
When you're judged by in-platform metrics, it's tempting to focus on tactics that juice those numbers in the short term, even if they don't lead to sustainable growth. You might pour money into retargeting to boost ROAS while neglecting upper-funnel efforts that drive long-term brand equity.
4. Platform reports don’t account for cross-channel impact.
In-platform metrics treat each channel as a silo, failing to recognize how different touchpoints work together to drive conversions.A YouTube ad with a low ROAS might be critical for driving awareness and demand that later converts through search or email.
While ROAS, CPA, and other in-platform metrics can be useful for optimizing specific campaigns, they shouldn't be the North Star by which you guide your overall marketing strategy.
For that, you need to look at metrics that are more closely tied to the health and growth of your business.
So if in-platform metrics are flawed, what should marketers be focusing on instead?
At Tier 11, we believe the answer lies in a set of business-centric metrics that provide a more holistic view of performance:
1. New Customer Acquisition Cost (nCAC)
This measures the cost to acquire a new customer, factoring in all marketing and sales expenses. By focusing on nCAC, you ensure that you're investing in sustainable growth, not just quick wins.
2. Media Efficiency Ratio (MER)
MER looks at the revenue generated per dollar of advertising spend, taking into account all touchpoints across the customer journey. This gives you a more accurate picture of your marketing ROI.
3. Lifetime Value (LTV)
LTV predicts the total revenue a customer will generate over the course of their relationship with your brand. By understanding LTV, you can make more informed decisions about how much you're willing to invest to acquire and retain customers.
The power of these metrics lies in how they work together.
For example, by comparing nCAC to LTV, you can determine whether you're acquiring customers at a sustainable cost.
If your nCAC is $100 but your average LTV is $500, you know you have a profitable growth engine.
On the flip side, if nCAC exceeds LTV, that's a red flag that your marketing is headed in the wrong direction.
Adopting these metrics requires a shift in mindset.
Rather than getting caught up in the day-to-day fluctuations of in-platform metrics, you need to step back and look at the bigger picture of how your marketing efforts are impacting your bottom line.
This means aligning your marketing goals and measurement with your overall business objectives around profitability and growth.
This method means embracing a more holistic, cross-channel view of performance.
Different marketing channels and tactics impact different stages of the customer journey, and that's okay.
A YouTube ad with a terrible ROAS might be critical for filling the top of your funnel and driving cheap awareness.
An email campaign with a high CPA could be key for nudging high-intent leads over the finish line.
By looking at business-centric metrics like nCAC and MER, you can understand the true, cross-channel impact of your marketing efforts and optimize for what really matters: profitable growth.
Evolving your measurement framework from in-platform metrics to business-centric metrics won't happen overnight.
It requires buy-in from leadership, alignment across teams, and often, new tools and processes.
But it's a shift that every business will need to make sooner or later to succeed in the privacy-first era.
Here are a few key steps to get started:
1. Audit your current approach
Take stock of the metrics you currently rely on and how they're influencing your strategy. Identify where there may be gaps or misalignments with your business goals.
2. Define your North Star metrics
Work with finance and leadership to agree on the key business-centric metrics that'll guide your marketing efforts.Make sure everyone understands how these metrics are calculated and why they matter.
3. Implement measurement systems
Put in place the tools and processes to track your North Star metrics across the full funnel.This may require updating your analytics setup, integrating data from different sources, and establishing new reporting cadences.
4. Optimize your strategy
With your new measurement framework in place, revisit your channel mix, campaign tactics, and budget allocation.Refocus your efforts on the activities that are driving improvements in nCAC, MER, and LTV.
5. Educate and align your team
Make sure everyone—from the C-suite to the front lines—understands and buys into this new approach.Provide training and resources to help your team adopt this new mindset and make data-driven decisions.At Tier 11, we've helped countless clients navigate this transition and unlock new levels of profitable growth.By focusing on metrics like nCAC and MER, they're able to make more informed investment decisions, drive more efficient growth, and build more valuable customer relationships.
The shift to business-centric metrics isn't just a fleeting trend—it's the future of marketing measurement.
As privacy regulations tighten and consumer behavior evolves, the old playbook of relying on in-platform metrics and last-click attribution will become increasingly obsolete.
The businesses that'll thrive going forward are those that align their marketing efforts with their core business goals and KPIs.
They'll use tools like media mix modeling and incrementality testing to understand the true impact of their marketing across channels.
And they'll focus relentlessly on acquiring and retaining high-value customers at a sustainable cost.
At Tier 11, this is the approach we champion.
We believe that by embracing business-centric metrics and challenging the status quo of digital marketing measurement, businesses can achieve transformational results.
Another way to wrap this up, from John Moran:
"What does matter is your top line and bank account."
In other words, the metrics that matter are the ones that directly impact your business's financial health and growth.
So if you're still clinging to ROAS and CPA as your main measures of success, it's time to rethink your approach.
The future of marketing belongs to those who focus on the metrics that truly move the needle for their business.
Ready to make the shift to business-centric marketing measurement?