Both if you do a better job qualifying user behavior and user patterns to increase conversion rate through analytics that either predict patterns or respond to pattern analysis.
That's the correct answer in that there is no right answer (other than it's definitely not the original ad). However, the objective is to pick one and back-up your answer.
That matlab equation someone else did is only one measurement that person created. If you're an internet marketer, it's not something they would regularly use.
CPC (cost per click) over total revenue is one of the standards people use. So is bounce rate, conversion rate, etc.
I'll make this a prize. $10 to someone's paypal account for the most complete answer, backing it up with rationale and stats, not generalized opinion.