Feb 19, 2018

Digital Marketing KPIs: How to Choose and Track

by Digital Marketing Institute

You probably already know that digital marketing KPIs (Key Performance Indicators) are a key part of measuring performance through your digital marketing strategy. But with so many options to choose from, and with so many businesses going through digital transformations, how do you know where to start or what to shift if you need to try something new?

Read on for an overview of what KPIs are and how to use them in today’s world of digital marketing.

What is a KPI?

The term KPI really just refers to a specific metric that you use as a baseline to measure performance. They may be referred to in a digital or non-digital context and are typically numbers that may refer to any area of business, including financial structures, productivity, or consumer behavior.

The right KPIs will inform your future strategy, so it’s best to start out determining what the best KPIs are for measuring digital performance from the get-go. You will need to establish first which area of your business or target goal you need to prioritize to choose the indicators that will be most effective in informing your strategy.

You’ll want to take current measures first, then look at your goals, and figure out how to fill that gap.

  • Keep it clear: Make sure that you choose objectives that are crystal clear – this is about metrics, data, and you’ll have to use objective not subjective numbers that you have now in order to set goals and forecast your future numbers.
  • Keep it simple: Anyone in your organization should be able to see and understand exactly what you’re doing with the metric. This isn’t complicated math – it’s basic business and analytics, so it should be easy to communicate what you’re doing with the rest of the team.
  • Stay action-oriented: There are plenty of metrics floating around that you could focus on if you wanted – but the ones that matter the most are typically linked to a specific action, rather than just a value.
  • Timing counts: Stick to a strict reporting and review schedule while establishing long-term, sustainable targets.

Choosing the Right KPIs

One thing to bear in mind with KPIs is that they don’t all matter, and this is especially the case these days with traditional metrics in the digital world. For instance, page views and visitor rates are something that you may want to keep an eye on, but they don’t give any information as to what’s actually going on behind the scenes.

On the other hand, looking at site traffic stats on a day that you have a specific marketing event, then comparing these in relation to conversions on that day versus other days, for instance, would be a way of applying these numbers to directly inform strategy for your next campaign.

Start with just a few key metrics that you know are strong indicators of your business health, then figure out whether or not you have an analytics tool to manage the metrics or if you have to calculate them yourself. Make sure that you are focusing on customers and business, not website “traffic” per se.

Vanity Metrics

KPIs that don’t really matter are sometimes referred to as “vanity metrics.” These are numbers that you might want to change, but they don’t actually tell you a lot about actions that you can take to make decisions that help you meet your business objectives. A general rule of thumb is to stick with action-based metrics that tell a story about customer experience. You can choose them by starting out with some key business objectives.

Let’s take Google Analytics for example. Some of these metrics, like page views and impressions, could be considered vanity metrics – we all want “more” of them, but are they actually giving you enough information to take action as is? Not necessarily. Sales conversions, on the other hand, give you cause to act: if they’re low, we need to see why. Is the checkout feature on our e-commerce site working properly? Is there something down on the website? Has an Amazon listing dropped in ranking? And so on.

Conversion Rates

Conversion rates are, of course, key to framing your future lead generation sales strategy activities, and you can use them as part of other metrics such as lead and sales ratios. There are more specific conversion rates to track as well, like keyword conversion rates and metrics that point to different parts of the lead generation and sales funnel process. You may want to use a tool like Alexa or SERanking to check conversion rates of your competitors and come up with an internal benchmark loosely based on those.


Everyone knows that revenue indicators are key, but as stated above, you need to know about the details behind your revenue in order for it to be useful information. So you’ll want to have an idea of things like subscription length, average order value, lifetime value, cost of customer acquisition, customer retention rates, and so on.


Is most of your traffic paid or organic? What social sites or marketing activities seem to have the most impact on lead generation? At what point in the sales funnel are you noticing changing numbers? You want to take a look at what customers are doing (or not doing) and then dig into those gaps to improve their experience.

Setting KPI Targets

Some questions to consider as you’re figuring out what measures to use:

  • How is the measure related to a specific business goal? Make sure that you have one measure for each goal.
  • What exactly is it that I’m measuring?
  • What other factors might this measure relate to?
  • How frequently does it need to be reported?
  • Who will be in charge of running the part of the campaign that supports this reporting?

All you are really doing here with your KPIs is measuring your short and long-term performance, but the value of these numbers is in what they tell others about where you’re at and where you want to be headed – in other words, your targets can say a lot about your overall business goals and strategy.

Understand how KPIs Relate to Your Goals

When you’re looking at an organization from the inside, you’re essentially taking these performance indicators and understanding how you can specifically benefit from it. But what you also want to look at is those indicators that related to customer experience, such as YouTube subscriptions and repeat purchase rates.

When you are setting targets with an external, human focus, you have a better overall overview of what direction to take. And don’t forget to account for the human resources end of things – employee turnover and skills gaps can also impact your ROI.

Digital Transformation KPIs

When a company undergoes a digital transformation, it takes a series of steps which affect the way that it sees and uses its metrics. KPIs, too, will need to be reconsidered in the context of the digital landscape. It is not going to be useful to stick with the old, pre-digital KPIs because metrics will have different values.

Regular marketing KPIs usually don’t transfer smoothly into digital ones, in part because businesses tend to be less compartmentalized in the digital sphere. For instance, as integrated marketing campaigns are rolled out that involve a combination of Twitter, YouTube videos, live events and virtual reality experiences, it would be hard to measure the success of that campaign in terms of basic revenue.

Digital metrics need to be monitored and applied continuously in order to give useful information to business managers as to what needs shifting. These numbers and tactics will be different in each business and industry, but in most cases, customer or client relationships should remain front and center.


Focus on long-term KPIs like customer lifetime value to work on retention as you go through your digital transformation – this will help to ensure that you’re not losing customers from the change out of traditional media.

What’s best for business? Metrics that tell a story. You want to focus on KPIs that help you focus on sustainable, actionable strategy that will not just boost your ROI but actually improve customer behavior and experience. The main thing to remember is always to be asking yourself whether or not a given set of numbers is directly related to an important objective, and helping you make specific decisions about that objective.

This can be a bit of a trial-and-error process that is about constantly fine-tuning the numbers and trying out different angles through A/B testing and such. It would be unusual to get no one ever has it “exactly” right. So don’t be scared to jump in and experiment a little – it’s all about tweaking, adjusting, and trying a few different things before seeing success.

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