7.6: Reading an Ad Report: CPL, CPA, ROAS — Understand the Numbers and Know Where Your Money Goes

For a local shop, an ad report only needs to answer four numbers: how much you spent, how many people contacted you, what each contact cost (CPL), and what each customer who actually came in cost (CPA). ROAS, the revenue earned per ad dollar, is a fifth number if you can track revenue. Impressions and likes are secondary.

Many owners receive a ten-page report full of charts and still can't tell whether the money brought customers. This last post in the series helps you read a report in five minutes and ask the right questions.

"Pretty" numbers and "real" numbers

Every report contains two kinds of numbers.

Pretty numbers look big and feel good:

• •Impressions: how many times the ad was shown.
• •Reach: how many people saw it.
• •Likes and video views.

Real numbers connect to money in the till:

• •Messages, calls and bookings.
• •New customers who came in.
• •Revenue from those customers.

Pretty numbers aren't useless. They show the ad is running. But a report with only pretty numbers is like saying "we handed out 10,000 flyers this month" without saying how many people came in holding one.

Each number explained with one example

Take a nail salon. The figures below are assumptions to make the maths easy, not industry standards.

In one month the salon:

• •Spends $600 on ads.
• •Gets 40 messages and calls about appointments.
• •Of those, 20 people book and show up.
• •Each spends $60 on average the first time.

A "lead" is someone who contacted you but may not become a customer. That's why CPL is always lower than CPA.

Two smaller numbers you'll see:

• •CTR (click-through rate): out of 100 people who saw the ad, how many tapped. A low CTR usually means the image and words aren't appealing (post 7.3).
• •CPC (cost per click): what each tap costs.

If CTR is good but few people contact you, the problem is where they land after tapping (mistake 3 in post 7.1).

What CPA is acceptable? Work it out for your own shop

Everyone asks this. I won't give a table of "standard numbers for Ontario nail salons", because I don't want to quote figures I can't back up. Costs vary by area, season and service.

Instead, you can work out a sensible level for your own shop in three steps.

Step 1. What is a new customer worth over a year?

A good nail customer doesn't come once. Suppose:

• •She spends $60 per visit.
• •She returns 6 times a year.

That customer brings about $360 in revenue per year.

Step 2. How much of that does the shop keep?

Revenue isn't profit. Subtract wages, supplies and rent. Say the shop keeps 30%, about $108.

Step 3. Compare with CPA.

Paying $30 to gain a customer who brings $108 of profit in a year is reasonable. Paying $150 is not.

This also shows why keeping customers coming back matters as much as finding new ones. If a customer comes once and never returns, a $30 CPA on a $60 bill leaves almost nothing.

For a restaurant the maths is the same but the bill is smaller. So the acceptable CPA is much lower too.

Why ROAS often looks low for service shops

In the example, ROAS is 2x. Not impressive. But that counts only the first visit.

Over a year, those 20 customers could bring 20 × $360 = $7,200. True ROAS would be close to 12x, if all of them returned. Of course not everyone does, so the real figure sits somewhere in between.

One more point: ROAS is only accurate if you record which customers came from ads. For a shop that takes bookings by phone and message, the ad system can't know who showed up. That's why "how did you hear about us?" is still the best measuring tool.

For reference: the commitment Wizy publishes on its service page is a CPL under $20 CAD and ROAS of 3x or more. That is a target Wizy sets for itself, not a market average.

The management fee and ad spend are two separate costs

When you hire someone to run ads, you pay two things:

1. •Ad spend: paid to Google and Meta.
2. •Management fee: paid to the person or agency who sets up and watches the campaigns.

A clear report separates them. And when you work out your own profit, add both. In the example above, if the management fee is $500, total cost is $1,100, and the true cost per customer is $55, not $30.

Seven questions to ask whoever runs your ads

A decent agency can answer all seven without dodging.

1. •Whose name is the ad account in? It should be your shop's. If you change agencies later, the data and history stay with you.
2. •What was the actual ad spend this month, separate from the management fee?
3. •How many leads, and what do you count as a "lead"? A like is not a lead.
4. •What were CPL and CPA this month, compared with last month?
5. •Which ad did best and which did worst? Why?
6. •What will you change next month?
7. •Can I log in and see the account myself?

If the answers are all impressions and reach, keep asking until you get a number of customers.

A one-page monthly report

You can draw this table in a notebook or Google Sheets, or ask your agency to fill it in.

Nine lines. Two columns side by side tell you whether things are improving.

Summary, and a wrap-up of the whole series

• •Four numbers to know: spend, contacts, CPL, CPA. Add ROAS if you can track revenue.
• •Impressions and likes are secondary. Don't let a report stop there.
• •Work out your own acceptable CPA from a customer's yearly value and what the shop keeps.
• •Separate ad spend from the management fee. The ad account should be in your shop's name.
• •Use the seven questions and the one-page monthly report.

The six posts form one path: find where money leaks (7.1) → aim at the right people nearby (7.2) → make images and words that stop the scroll (7.3) → choose Google or Facebook (7.4) → remind people who didn't book (7.5) → read the numbers to see where the money goes (7.6).

Wizy sends a weekly report, detailed down to each campaign. See our Google & Facebook Ads service or book a free 15-minute consultation. Bring your current report and we'll read it together.

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✍️ About the author: Do Ngoc Hoan Founder of Wizy.ca, a marketing agency for Vietnamese businesses in Ontario. I write to make marketing simple for busy shop owners — no confusing jargon. More at dongochoan.com.