The best metric depends on your business model, but evaluating keyword performance using CPA, ROAS, and customer lifetime value (LTV) together provides a more complete picture.
- CPA: Measures how much you spend to acquire a conversion or customer. Useful for controlling acquisition costs.
- ROAS: Measures revenue generated for every dollar spent on advertising. Best for evaluating immediate revenue efficiency.
- LTV: Measures the total value a customer generates over time. Helps identify keywords that attract more valuable long-term customers.
For lead-generation campaigns, prioritise cost per qualified lead and customer acquisition cost rather than raw CPA. For ecommerce, use ROAS alongside LTV to understand both immediate returns and long-term profitability.
The strongest approach is to identify keywords that generate profitable customers, not simply the cheapest conversions.
