Basics · also called key performance indicator
KPI
A KPI (key performance indicator) is the specific, measurable metric an advertiser or publisher chooses in advance to judge whether a campaign or business is succeeding.
A KPI is the scoreboard you agree to use before the game starts. For a brand-awareness campaign it might be reach, viewability or brand lift; for a performance campaign, CPA or ROAS; for a video campaign, video completion rate; for a publisher, eCPM or fill rate.
Good KPIs are tied to real business outcomes and hard to game. The problem with easy KPIs such as CTR or cheap CPM is that optimisation algorithms and some sellers will find the cheapest way to hit them, which often means low-quality, made-for-advertising sites or fraudulent inventory. Chasing a low CPM KPI is one of the most common ways budgets end up funding bots.
Mature advertisers pair a primary KPI with guardrails: for example, target CPA plus a maximum IVT rate, a minimum viewable rate and brand suitability rules, and validate the whole thing with incrementality testing.
Think of it like this
A KPI is like choosing whether a diet is judged by weight, waist size or blood pressure: pick the wrong one and you can hit the number while missing the point.
An example
A streaming service sets its campaign KPI as cost per new subscriber under US$40, with guardrails of 70%+ viewability and under 2% invalid traffic.
Related terms
CPA (cost per acquisition)
CPA (cost per acquisition) is the average advertising cost of getting one desired action, such as a sale, sign-up or app install, and also a model paying only for those actions.
ROAS (return on ad spend)
ROAS (return on ad spend) is the revenue generated by advertising divided by the money spent on that advertising, usually shown as a ratio like 4:1 or 400%.
CTR (click-through rate)
CTR (click-through rate) is the percentage of ad impressions that result in a click, calculated as clicks divided by impressions, multiplied by 100.
Campaign
A campaign is an organised set of ads with a shared goal, budget, audience and time period, run across one or more channels and measured against defined KPIs.
Incrementality
Incrementality is the extra result, such as sales, installs or visits, caused by advertising that would not have happened without it, usually measured by comparing exposed and unexposed groups.