Auction Math Diagnostic

The auction math chain

Every paid platform sells one thing: impressions. Everything after that is your creative and your offer doing the work. The chain runs:

CPC = CPM ÷ (1000 × CTR)
CPA = CPC ÷ conversion rate
ROAS = AOV ÷ CPA

Worked through the defaults: an €8 CPM with a 1.2% CTR means each 1,000 impressions costs €8 and produces 12 clicks, so a click costs €0.67. At a 2% conversion rate you need 50 clicks per order, which puts the CPA at €33.33. On an €80 order that is a 2.4x ROAS. Four inputs, and the entire economics of the account fall out of them.

Why this framing matters

When ROAS drops, most people react at the ROAS level: cut budget, change bids, blame the algorithm. But ROAS is the last number in a chain, and it can only break in three places. Either impressions got more expensive (CPM), the ads stopped earning clicks (CTR), or the clicks stopped converting (CVR). Each failure has a completely different fix, and applying the wrong one wastes weeks. Bid changes do nothing for a creative problem. New creative does nothing for a broken landing page.

How to use the three bars

Each bar checks one lever against practical benchmarks: CTR healthy at 1.2% or better, CPM healthy at €8 or under (note that for CPM a fuller bar means more expensive), CVR healthy at 2% or better. The verdict picks the weakest lever, worst state first, and if two levers share a state it takes the one furthest from healthy in relative terms. Fix that lever, re-enter your new numbers, and see what became the constraint. Accounts improve fastest when you work one bottleneck at a time instead of changing five things at once.

Pull your real inputs from a 7 or 14 day window in Ads Manager, not lifetime numbers. Recent data reflects the auction you are actually buying in today.