ArticleThe Creative Performance Metrics That Matter in 2025
I hope you’re all doing well & enjoying the final few weeks of 2024 (what a year, am I right?). Between Holiday campaigns, 2025 planning, year-end client meetings and gearing up for the 2025 conference season, the past week has felt like a whirlwind – our team found time to launch our Whiteboard series (and by series, I mean one episode). There’s a ton of overlap between the whiteboard topic + this newsletter, so I’d definitely appreciate it if you checked it out here(disclaimer: we’re figuring out the shooting/camera/logistics/mics – we’ll get better, I promise!).
With the intro out of the way, let’s dive into this week’s topic: the creative metrics I’m focused on for 2025 (and beyond). This framework applies globally – B2B, B2C, B2G, D2C, eCommerce, you name it – if you are investing dollars into advertising, this is a topic that should matter to you; if you’re in an industry/sector/vertical where creative has not historically been a focal point, it matters even more, as the advantage you will gain is that much larger + more significant.
From Oracles To Formulas:
For as long as advertising has existed, creative has played a two-fold role: (1) to differentiate one advertisement from another and (2) to compel the audience to do something (buy, visit, inquire, shop, learn, view, whatever). This is as true today as it was in the 1500s.
What has changed is both the process by which we identify the winning creatives AND the scale at which we advertise.
For much of the past 100 years, creative has been dominated by “Oracles” – creative agencies, copywriters, photographers/videographers – the ad men. In return for (oftentimes very) hefty fees, the Oracles would examine the brand and the audience, tap into their knowledge of psychology, historical performance and the day’s Zeitgeist, sprinkle on some magic powder (usually in the form of a powerpoint) and voila! A creative was born.
The problem with Oracles today is the same as it was during the time of Leonidas: for all their divine powers, they are wrong quite a bit. While the impacts of those wrong predictions have changed – in ancient times, a wrong prediction could result in a famine, plague, defeat, revolution or worse; today, an oracle being wrong results in a lot of ad dollars being squandered (and a CMO getting fired).
While leaders have stopped (for the most part) heeding the advice of Oracles, marketers were far more reluctant to change – at least, until recently. The catalyst? The trinity: Digital platforms (especially Meta), Machine Learning & LLMs.
Until those things came on the scene, there was no good way for a marketer or brand to validate the expected performance/efficacy of creative – sure, there were focus groups (which were just decentralized Oracles with some statistics sprinkled on top), testing panels (focus groups on steroids), sneak peaks, creative gurus – but all of those came with price tags as hefty as (if not heftier than) the Oracles themselves. But with Meta, ML + LLMs, the cost of creative validation has gone from sky-high to near-zero. Social algorithms can identify signals across trillions of data points, predict which ads are most likely to generate an expected result on an individual level with heretofore unheard-of precision.
Today, anyone can log into Meta, upload a bunch of ads, set a cost cap / bid cap, sit back & observe: the system will serve the ad(s) with the highest probability of obtaining the results within the parameters set, and it will mothball the rest. Instant creative validation—completely free, aside from the time it takes to load your ads (which depends on Meta Ads Manager’s mood).
This leads to an inescapable conclusion: the time of the Oracles is over.
Predictions are valuable only when obtaining the data otherwise is too costly (either in the form of risk, actual cost or a combination). There’s no need to rely on esoteric guesses, intuition and gurus when marketers/brands have the tools to brute-force solutions for a fraction of the cost and in a fraction of the time.
Obviously not all brands will take advantage of this. But the ones that do will find their ad accounts scaling, their businesses growing and their market share expanding; those that do not will slowly fade into obscurity.
Power Laws & Creative
Ad creative – like many things – exhibits a winner-takes-most dynamic: your top 10%-20% of ads (or keywords, or audiences) generates a disproportionately large share of your total results (often 80%, 90% or more).
That’s a power law in action. If you’re curious, I wrote about it here.
These ads are your “hits” – the ones that perform orders of magnitude better than the rest. Hits – by their very nature – drive a large share of positive events at a lower cost-per-event than the other creatives or KWs), making them the key to scaling your ad account. The more hits you have, the more you’ll be able to scale your account AND sustain the scale going forward. The fewer hits you have, the higher the risk profile of your account (and thus, your business).
If you’re curious, you can actually see how reliant your business/ad account is on hits using the “Hit Index”:
First, identify the hits. I use this definition, but feel free to adjust it accordingly. A hit is an ad/creative that meets the following three criteria:
- It produces at least 25 conversions (optimization events) within a 30-day period
- It spends at least 25x your target cost per conversion (if you’re using tROAS, that’s your AOV for the product/service divided by your tROAS)
- It produces those conversions at or below your target cost per conversion
You may have to adjust this definition slightly depending on your brand/account, but it gives a good starting point – and it’s industry/vertical agnostic. It doesn’t matter if your objective is leads, sales, sign-ups, downloads, whatever – the math is the same.
Once you’ve identified the hits for a period of time (let’s call that “P”), determine: (1) the total number of conversions that occurred across your entire account during P AND (2) the total number of conversions that were generated by all ads fitting the “hit” definition above.
Now, calculate your Hit Index:
[# of conversions from “Hit” Ads] / [Total # of conversions from the Account]
The result will be between 0 and 1; the ideal is somewhere between 0.6 and 0.9. If it’s near-0, that likely means that either: (i) you’re not spending enough; (ii) your creative is all terrible; (iii) you have a product-market fit problem; (iii) you’re not experimenting enough; and/or (iv) your account has a bigger issue, like bad conversion tracking.
On the other hand, if the ratio is >0.9, it’s likely that (i) your performance is overly dependent on a few hits – such that if one stops working, you’re going to be in a world of hurt and (ii) you’re probably not taking enough (or big enough) swings in your experimentation and testing.
If you’re in the happy zone, congratulations! Keep it up.
Why Hits Matter:
The single-most-frequent question I get from CMOs, brand owners, investors and marketers is: how do I scale my [ad account/channel/business] profitably? And the answer is always the same: hits.
You need hit products. You need hit creatives. You need hit channels.
Virtually every business operates like a venture fund at some level: a small fraction of the people/services/SKUs generates a majority of the positive outcomes. What great businesses tend to do is they stack hits. They recognize that hits (the financial, audience and brand advantages they provide) compound over time.
Bottom line: given that hits = growth, then the faster you can find the hits, the faster you can grow.
This makes three metrics incredibly important:
- Cost Per Creative: creative budgets aren’t unlimited. Every dollar sunk into creative is a “non-working” dollar – meaning it’s going to something other than the ad account (and, as a result, the ad account needs to work that much harder in order to get you to a positive contribution margin position).
Formula: [Total Cost of Creative] / [# of Creatives Produced]
- Hit Rate: the rate at which ads you create/launch turn into “hits”.
Formula: [# of Hits Created] / [Total # of Ads Launched]
- Creative Velocity: the rate at which you are adding new creatives to your ad account, expressed as “Creatives Per Day”
Formula: [# of Creatives Added] / [# of Days]
The first metrics above can be combined to create a fourth metric: Cost Per Hit
Cost Per Hit = [Cost Per Creative] / [Hit Rate]
Cost Per Hit is an incredibly simple metric, but it’s one that’s often ignored. It captures the amount of investment required to unlock another growth lever (aka a hit ad). The more expensive it is to produce another hit, the greater the share of an existing hit’s performance will go to off-set creative costs.
Here’s a simple illustration of Cost Per Hit in action.
Let’s assume we have two near-identical brands. Both sell widgets for $100. Both have a Cost of Delivery + Cost of Goods Sold of $30. Both have a CAC of $20. Simple math tells us that each time one of these brands sells an item, they will generate approximately $50 in Contribution Dollars ($100 – $30 – $20 = $50).
Both brands also spend $5,000 per month in creative costs.
Brand A produces 10 creatives per month at a ~30% Hit Rate. Quick math says this is $1,667 cost per hit ($500/0.3 = $1,667).
Brand B produces 100 creatives per month at a ~10% Hit Rate. This is a $500 cost per hit ($50/0.1).
That may not seem like a huge difference. But it is:
Every time Brand A produces a “hit” ad, the first 34 sales ($1,667/$50) go to “pay back” the cost of the hit ad. Every sale from that hit after 34 drops is then available to pay for other fixed costs, operational expenses, R&D, headcount, profit, etc.
Brand B, on the other hand, has a dramatically shorter payback period: $500/$50 = 10 sales. That means that 24 sales’ worth of contribution dollars are available to Brand B that are not available to Brand A.
Here’s the rub:
This isn’t just a financial advantage. It’s a risk advantage. It’s a business advantage. And all of these advantages compound.
Over the course of a year, Brand B will have produced 100*12 = 1,200 ads, of which ~120 are hits. Brand A, only 10*12 = 120 ads, of which 36 are hits. This means Brand B has tested 1,080 more ads than Brand A. They have more data on what works and what doesn’t. They likely have unlocked a broader audience pool as a result (Meta + G both serve ads on a personal level – so the more creative diversity you have, the more likely Meta will “find” an ad that’s likely to perform).
If a dozen of Brand A’s hits stop performing, the ad account – the customer acquisition engine – will likely experience substantially higher costs, while the team will likely take longer (again, since data is limited) to create and ship enough ads to recover. Brand B, on the other hand, has a much higher probability of being able to handle a dozen hits suddenly cratering in performance – they’ll still have 108, and they’ll be able to replace those in about 5 weeks at their current hit rate + creative velocity.
In short: Brand B has a huge advantage over Brand A – not simply due to the financials (which are nice), but because of the structural advantage they’ve built by focusing on minimizing cost per hit and maximizing creative velocity.
All of that leads me to this matrix, which I posted on X earlier this week:
Brand B is somewhere in the green zone. Brand A is likely in the red zone.
Where people usually have questions are the other two quadrants – yellow and orange.
Orange might be the most volatile: high creative volume (meaning you’re testing a lot) and high cost per hit (meaning you’re either spending way too much on creative, or you’re struggling to find product-market-offer-creative fit). The good startups are usually here for a bit (they’re iterating rapidly, trying a thousand things, and eventually either (a) something works or (b) they run out of money). There’s also a lot of “creative gurus” in this space – people/groups/agencies that are resource-intensive, that produce a ton of ads, but are pretty terrible at creating hits.
The very nature of the orange zone tends to result in it being a temporary thing – either the brand figures out some creative formulas, audiences + offers that work (and moves right into the green zone), or they stop shipping so much creative because the cost is prohibitive (and they fall down into the red zone).
The yellow quadrant, on the other hand, is one of the most intriguing. These are the brands that ship new creative infrequently, but (for whatever reason), they hit at a high rate and/or they’ve found ways to keep their cost per creative exceptionally low. The commonality among many brands in the yellow quadrant is that they have Founders/Execs/CEOs/Presidents producing low-res creatives on iPhones or with basic setups (read: ring light, white board + no production value). The simple reality is that most of these people are incredibly knowledgeable about their product/service/solution, they’re passionate about their brand, and they’re (generally) able to communicate the benefits to their audience in a way that resonates – all of which usually leads to high-performing ads.
The downside? Most of the time, the Execs/Founders are BUSY. They don’t have time to create new ads every week, let alone every day – so the marketing person (let’s not pretend it’s a team) makes do with what they get, and tries (usually in vain) to get more. Result? Low cost per hit (since the creative cost is virtually nil) and low creative velocity (since they might only get 3-4 videos per month from the exec/founder). The irony of this situation is that the founder/exec (in his/her mind) is trying to do everything possible to help the brand succeed – but is failing to realize that simply dedicating 10 minutes a day to producing 1-3 creatives would exponentially accelerate the growth of the business.
Generally, all that’s needed for a brand to move from the yellow zone to the green zone is some structure, process + commitment – a structure to give the Exec/Founder clear guidance on what to produce, a process to templatize the output (think the Whiteboard Friday series from Moz), and a commitment from the individual to block out 10-20 minutes a day to execute.
Reducing Cost Per Hit
Lowering your cost per hit (and thus getting closer to the yellow or green quadrants) is – at its core – a result of two things: either (a) you reduce your cost per creative or (b) you increase your hit rate.
Most brands – mistakenly – try to do it via (b). That typically looks like expensive creative agencies, bringing in creative strategists (who are expensive AF), using expensive production houses, scheduling more studio time, etc. – all things designed to up the production quality and (thus) the hit rate.
Those tend to be (very expensive) mistakes. To understand why, let’s talk baseball for a minute.
In baseball, the highest possible batting average (calculated by the number of hits divided by the number of at-bats) is 1.000. The same is true for hits – your maximum number of hits is limited only by the number of creatives you’ve put into market. There’s nothing that says a MLB player couldn’t hit 1.000 for a season – it’s theoretically possible. There’s no rule against it.
But it has never happened. In fact, no hitter in MLB history (since 1900) has ever hit 0.500. The highest single-season batting average is 0.426 (Nap Lajoie in 1901). If you were to hit 0.360, you’d win the battling title in any of the last 10 years. Put another way: if you *only* got out 640 times out of every 1,000 at-bats, you’d be among the greatest hitters in the long, storied history of professional baseball).
Batting averages have a “soft cap” – a point at which the rate of improvement begins to significantly diminish, despite substantial energy, effort + expenditure. So, too, do hit rates. Every brand gets to a point where, despite all of the resources invested into producing better creatives, the rate at which ads become hits stops improving, while the expense starts to skyrocket.
That’s the soft cap.
Volume, on the other hand, doesn’t have a soft cap. Contrary to what your parents (or your grandparents) told you, more really is more. Yes, more ads means you’ll have more misses, and you’ll likely miss on a greater percentage of your ads than a brand that’s investing a staggering level of resources into improving its hit rate.
BUT
If you can decrease cost per creative at a faster rate than your hit rate declines, you will make more money. If you can do that AND increase creative velocity, you will print money.
How do you do that?
Here’s a few ways:
- Leverage LLMs + AI-powered creative platforms. Machines can’t (and won’t) completely replace humans in the creative process, but they can accelerate the rate at which brands/marketers produce ads. Platforms like Canva offer ready-built templates + “AI assisted” features that remove backgrounds, manipulate shapes and iterate concepts. ChatGPT/Claude/Gemini can spit out dozens, hundreds, even thousands of hooks/value props/ad variations. Some of these will be absolutely terrible. Some will be quite good. You’ll need to curate + refine many. But the total time spent per creative will decline as you use the platforms.
- Don’t Reinvent The Entire Wheel. Most marketers think ad creative needs to be made from “whole cloth” – from scratch. Nothing could be further from the truth. Platforms like Google, YouTube, Meta + TikTok have published ad libraries, where anyone can view what ads various brands have in-market, along with (in some cases, like the Tiktok ad library) the relative performance of those ads. Use that as a starting point. Don’t copy verbatim or steal, but do take notes. This is free data. Use it to accelerate the rate at which you produce ads AND the rate at which those ads hit.
- Double Down on Winners. This is a tip from Cory Henke that’s absolutely brilliant – when you find a creative – particularly a video creative – that works, load the script into ChatGPT/Claude/Gemini and ask it to produce another 10 (or 100) hooks/angles/scripts. Turn all of those into ads. If that video used a creator or influencer, send those scripts to that individual (or individuals) and have them make all of those variations. If you’ve found success with one influencer, load their profile into SparkToro and find the other 50-100 profiles that people who tend to follow this influencer also tend to follow. Reach out and have them create content for your brand as well.
- Think Modular. I’ve shared our creative matrix on several occasions, but it bears repeating here. The single-biggest expense (in terms of time + money) in any shoot is the prep – the lighting, setting up the scene, getting the cameras in the right place, etc. The actual take is often less than 5% of the total time required in capturing a scene – so doing 3 different variations of a single scene (for instance, 3 different hooks or 3 different value props or 3 different audience callouts or 3 different pain points) requires little incremental time. Capturing 3 (or more) variants of each aspect of your ad (hook, pain point, feature/benefit, proof point, value prop, closing) doesn’t just give you 3 ads – it gives you the potential for 729 different ads from a single shoot.
- Repurpose + Iterate On Winners. Most brands have an abundance of under-utilized content. Repurpose that content into new creative assets, then ship. A blog post can (easily) become a handful of video ads. A white paper can become a dozen carousels and/or 5-6 video ads. Don’t feel compelled to always build from scratch – use what you have to accelerate the rate at which you produce ads.
- Leverage Virtual Studios Where Possible. The days where brands (especially eCommerce/DTC brands) need to pay through-the-nose for creative assets are over. Virtual studios like Soona are producing downright incredible assets for a fraction of the cost as a freelancer or creative agency – and doing it in a fraction of the time (turnaround in days). Layer that on top of the fact that virtual studios have performance data on millions of assets across thousands of brands that’s used to inform how they create assets, and it’s a no-brainer.
- Use AI to reveal insights. AI doesn’t just have to be used for creative production – it’s also pretty good at uncovering insights about what drives creative performance. Upload your best-performing hits and prompt it to identify commonalities across those winner ads. You’ll likely find that the ads that work share some characteristics – so build those into future ads to increase hit rate without sacrificing creative velocity.
I firmly believe that this topic will be one of the most important ones in the years to come – and the brands that get ahead of the curve today will be in prime position to win tomorrow. If you haven’t figured out where you are in the creative matrix above, I’d encourage you to start thinking about it. And if you’re wondering where to invest your creative dollars in 2025, start with lowering your cost per hit.
Cheers,
Sam
