Most small business owners know their ad spend. Almost none of them know their ad ROI. That's the gap between businesses that scale their marketing and ones that keep running the same broken campaigns forever.
The Metrics That Actually Matter
Forget impressions and reach. For a local business, there are exactly four numbers that matter:
- Cost per lead — what you pay for each phone call, form submission, or booking inquiry
- Lead-to-customer conversion rate — what percentage of leads become paying customers
- Average customer value — what the average customer spends over their lifetime with you
- Return on ad spend (ROAS) — revenue attributable to ads divided by ad spend
How to Track Calls From Ads
Use a call tracking number specific to each ad campaign. Free tools like Google's call tracking or paid services like CallRail let you see exactly how many phone calls came from your Facebook ad vs. your Google ad vs. your website. This alone changes how you allocate budget.
How to Track Online Bookings From Ads
Add UTM parameters to every link in your ads: ?utm_source=facebook&utm_medium=paid&utm_campaign=spring2026. Your booking system or Google Analytics will show you exactly which campaigns are driving appointments.
The Math: What's a Good ROAS?
For most local service businesses with margins above 40%, a 3x ROAS breaks even. 5x is solid. 8x+ is excellent. For restaurants and food businesses with lower margins, you need 4–6x just to break even on ad spend.
The Hidden ROI: Lifetime Value
A new customer who visits your salon once is worth $60. A new customer who returns monthly for 3 years is worth $2,160. Your ad ROI calculation should use lifetime value, not first-visit value. A campaign that costs $200 to generate one new customer and looks terrible on first-visit math might have a 10x return over 12 months.