How to Know If Your Ads Are Working

This lesson was peer-reviewed for accuracy and clarity by experts from Galactic Fed.

As a founder, you don’t have time to get lost in dozens of metrics. You just need to know: is this ad working or not? Think of it in two layers:

1. Your Goal (success or failure).
2. Storytelling Metrics (clues to why it’s working or not).

Step 1: Start With Your Goal Metric

This is the one number that tells you if your ad is successful. For most brands, it’s usually:

• Cost Per Acquisition (CPA): How much you pay to get a new customer.
• Or ROAS (Return on Ad Spend): How much revenue you earn for every dollar spent.

Ask yourself: Am I hitting my target?

• Yes: Great, keep running the ad and collect more data.
• No, but I don’t have enough data yet: Let it run longer. Ads need time and budget to stabilize.
• No, and I’ve spent enough to be confident: Time to pause it and test something new.

Keep this step very simple. If your goal metric is off, that’s your answer.

Step 2: Use Storytelling Metrics to Learn

Once you know whether the ad is working, you’ll want to figure out why. This is where secondary metrics help. They don’t give the full answer, but they provide clues to guide your next creative test.

Key Storytelling Metrics

• Click-Through Rate (CTR): Are people interested enough to click?
• Conversion Rate (CVR): Once they click, do they actually buy or sign up?
• Cost Per Click (CPC): Are clicks expensive, or is the problem further down the funnel?

For video ads, you can also check:

• Thumb-Stop Rate: Do people pause when they see your video?
• Hook Rate: Do they watch past the first 3 seconds?
• Hold Rate: Do they stick around until the end?

Think of these as detective tools. They won’t tell you the exact reason, but they give you evidence to form hypotheses. For example:

• Low CTR = maybe your creative doesn’t grab attention.
• Low CVR = maybe your landing page doesn’t match the promise of your ad.
• High CPC = maybe you’re targeting too broad or too competitive an audience.

Step 3: Turn Learnings Into Action

Don’t just measure, act. Use your results to guide what you test next.

• If CPA/ROAS looks good: Keep running the ad and test small variations (headline, image, opening frame).
• If CPA/ROAS is bad: Use storytelling metrics to decide what to fix. Is it the creative? The offer? The landing page?
• Always be testing: Every ad gives you a new clue. Use that to form a hypothesis for your next creative.

Quick Recap

For busy founders, here’s the shortcut:

1. Goal Metric: Is my CPA/ROAS on target? Yes or no.
2. If no: Look at storytelling metrics for clues.
3. Act: Kill weak ads, double down on strong ones, and test new creative based on what you’ve learned.

Stay focused on what matters. Avoid drowning in vanity metrics. Ads are an ongoing experiment—measure, learn, and iterate.

Phase 1: Learning (Month 1–2)

• Expect your cost per customer (CPA) to be 2–3x higher than your target while platforms learn.
• A click-through rate (CTR) above 0.8% shows your creative has potential.
• Focus on collecting data, not efficiency.

Phase 2: Optimization (Month 2–3)

• CPA should start moving closer to your target (within ~50%).
• CTR will stabilize—look for ads that consistently perform.
• Begin testing variations of your strongest ads.

Red Flags

If you see these, it’s a sign your ads need rethinking:

• CTR stays below 0.3% after 1,000+ impressions.
• CPA is consistently 3x higher than your target after real spend.
• CTR drops steadily over time (creative fatigue).

Learning From Your Ads

Week 1: Just gather data. Don’t change anything yet.

Week 2–3: Look for winners. Ask:

• Which headlines get the most clicks?
• Which visuals drive engagement?
• Which calls-to-action convert?
• For video: Which openings stop scrolls? Which formats keep attention?

Week 4+: Build on what works.

• Use similar visuals with new copy.
• Try the same offer with different hooks.
• Expand winning ads to new audiences.
• For video: Reuse successful hooks in fresh content.