How to Know If Your Ads Are Actually Working

Short answer

Your ads are working if they're generating leads or sales at a cost lower than the lifetime value of a customer. Measure cost per acquisition (CPA), not just clicks or impressions.

The metrics that actually matter

Cost per acquisition (CPA)

The most important metric. How much does it cost to get one paying customer?

CPA = Total ad spend ÷ Number of customers acquired

If you spent $500 and got 5 customers: CPA = $100

Is that good? Depends — if each customer is worth $1,000, yes. If they're worth $80, no.

Return on ad spend (ROAS)

Revenue generated ÷ ad spend. A 3x ROAS means you made $3 for every $1 spent.

Click-through rate (CTR)

What % of people who saw your ad clicked it. Low CTR = your creative or targeting needs work.

Google Search CTR: aim for 3%+
Facebook/Instagram CTR: aim for 1%+

Conversion rate

What % of people who clicked your ad became customers. Low conversion rate = landing page or offer problem.

Setting up tracking properly

Without tracking, you're guessing. Set up:

Google Ads conversion tracking — track purchases, form fills, calls
Meta Pixel — track actions on your website after clicking Facebook/Instagram ads
Google Analytics 4 — see the full customer journey

How long before you can judge results

Facebook Ads: 7–14 days (algorithm learning phase)
Google Search Ads: 2–4 weeks
SEO: 3–6 months

Don't make decisions based on 2 days of data.

Signs your ads aren't working

CPA is higher than customer lifetime value
You're getting clicks but zero conversions (landing page problem)
Your ad spend keeps rising but revenue stays flat
CTR is below 0.5% (targeting or creative problem)