Here’s a glossary of terms you should know:
CPC (cost-per-click): If you use cost-per-click pricing, you only pay when someone clicks on your Facebook Ad.
CPM (cost-per-mille): With cost-per-impression you pay when Facebook shows your ad 1000 times. (Impressions are the number of times your ad is shown to a user on Facebook).
CPA (cost-per-action): This allows you to track and optimize how much you spend to get someone to take an action (or convert) on your website after clicking your ad.
CPL (cost-per-like): This allows you to track and optimize how much you spend to get someone to “Like” your Facebook Page after clicking your ad. Learn more about how to increase Facebook Likes using Facebook Ads.
Cost-Per-Customer: Cost-Per-Customer is the one number you need to watch. It is the cost of getting one person to buy from you. All of the other cost numbers are just parts of the equation for calculating your final cost of getting one new customer.
Average Value Per Customer (AVC): AVC is the average order amount of each customer. If you have a one-time payment business model, meaning someone pays you a one time fee for each product or service, this is the equation you use to calculate the average order amount: Total Sales Revenue / Number of Customers.
Conversion Rate: The percentage of visitors who take a desired action. The desired action can take many forms, varying from site to site. Examples include sales of products, membership registrations, newsletter subscriptions, software downloads, or just about any activity beyond simple page browsing.
Clickthrough rate (CTR): The percentage of individuals viewing a web page who click on a specific advertisement that appears on the page. Click-through rate measures how successful an ad has been in capturing users’ interest. The higher the click-through rate, the more successful the ad has been in generating interest.