2 Metrics That Reveal If Your Meta Ads Are Failing

📊 Before you make your next move on Meta Ads—scaling, pausing, or doubling down—ask yourself:

Are you looking at the right metrics?

Most advertisers obsess over ROAS.

It’s easy to track and sounds impressive. But let’s be real: ROAS can lie.

A high ROAS might still mean you're losing money if your overall costs (not just ad costs) are too high.

In DAS #10 – Why Facebook Ads ROAS Is a Misleading Metric, we broke down why ROAS can be misleading. It doesn’t account for actual business fundamentals like profit margins, overhead, churn rate, or team costs.

In other words: ROAS is a revenue metric—not a profit metric.

This week, we’re getting practical. Let’s look at the two business-focused metrics that help you make smart, CFO-level decisions on Meta Ads.

Let’s dive in.

The Metrics SMBs Look at (and Why They’re Not Enough)

If you're a small business owner, you’ve probably glanced at your sales, maybe your traffic, or if you're more advanced, ROAS.

That’s a good start.

But here’s the problem: most of these numbers don’t tell you if you're actually making money.

They show activity, not profitability.

👉 Likes ≠ Attention
👉 Sales ≠ Profits
👉 Traffic ≠ Growth
👉 ROAS ≠ Success

This is where many SMBs fall short.

They’re not looking at their real numbers—the ones that can tell you if you’re on the right track or just spinning wheels.

Know Your Margins First

Before these two metrics can help you, you need to know two things:

1. Your product/service margins—both gross and net.

2. Your business strategy—what you’re optimizing for: growth, profitability, LTV?

Too often, I meet founders who don’t know their margin structure or their break-even point.

If you’re not crystal clear on your numbers, Meta ads won’t save you—they’ll just expose the cracks. (See: DAS #57 - Meta Ads Will Scale or Expose your Business)

Once you’re solid on that front, here are the two Facebook Ad metrics to plug into your strategy.

1. Gross Profit Margin (per Conversion) - GPM

Formula: Average Order Value (AOV) – Cost Per Acquisition (CPA)

This metric tells you how much profit you're making per order after ad costs.

Example:
AOV = $100
CPA = $60

→ GPM = $40 (before operating costs)

A simple way to check: Is it even worth it to buy ads?

🛠️ How to use it: 

First, create a custom metric in Ads Manager, and set it up in your custom columns. Check it every week and break it down daily.👇🏻

📎 See DAS #01 – Facebook Ads Metrics: What Matters and What Doesn't for how to create custom metrics and set up your dashboard.

🔍 Why it matters: It’s easy to increase ROAS by cutting spend—but if your gross profit drops, you're scaling losses, not growth.

2. Total Profit Volume - TPV

Formula: Total Revenue from Ads – Total Ad Spend

If gross profit margin tells you how profitable each order is on Meta, Total Profit Volume tells you how profitable your entire campaign is.

Example:
Revenue from Meta Ads = $10,000
Ad Spend = $2,500

→ TPV = $7,500

It helps you answer:

✅ Are we making enough profit to justify this ad spend?

✅ Should we scale?

✅ Is this a sustainable engine?

🛠️ How to use it:
Add this custom metric to your columns in Ads Manager. Review it weekly with daily breakdowns to see which days are actually profitable.

💡 Pro Tip: 

For the most accurate numbers, track your total revenue and AOV directly from your website backend—because even the Conversions API isn’t 100% reliable. That way, you’ll get a clearer picture of your GPM and TPV.

🍩 Snackable Challenge

Review your current Meta Ads Manager and add these two custom Metrics:

1. Gross Profit Margin per Conversion (GPM)

2. Total Profit Volume (TPV)

When you’re ready share it with me, hit reply and show me:

📤 Your old view vs. your new one.

Let’s make sure you’re tracking what actually matters.