Nov 28, 2022
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 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 a practical overview of essential KPIs for digital marketing and how to choose them for your initiatives, campaigns, and communications.
The term KPI refers to a 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 for digital marketing 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 which area of your business or target goal you need to prioritize to choose the indicators that will be most effective..
First, you’ll want to take a few measures to choose the right KPIs, then look deep at your goals, and figure out how to fill that gap.
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.
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.
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.
Stick to a strict reporting and review schedule while establishing long-term, sustainable targets that align with your specific marketing goals.
KPIs are integral to digital marketing success as these particular metrics offer measurable values applied to key promotional objectives.
For instance, you may set digital marketing KPIs based on return on investments (ROI), conversion rates, and customer lifetime value, among others.
By using KPIs to track your digital marketing campaigns, you’ll give your data direction, meaning you’ll gain a clearer understanding of which metrics will best benefit your initiatives and omit any that are surplus to requirement.
Start with just a few key metrics that you know are strong indicators of your business health such as conversions or visitor rates, then figure out whether or not you have an analytics tool to manage the metrics or if you have to calculate them yourself.
To help steer you towards analytical success, here are four essential KPIs for digital marketing you need to track.
This KPI will give you an accurate gauge of the percentage of website traffic earned through organic search.
It's possible to attribute traffic flowing to your site generated by organic searches to your search engine optimization (SEO) strategy. If your organic traffic is healthy, your content is performing well due to its value, relevance, and engagement.
These KPIs will help you to understand where your organic traffic is coming from and allow you to make changes to produce more SEO-rich, relevant branded campaign content, like:
Whether you've developed a dedicated (and great) landing page as part of your campaign or you're directing prospects to specific pages on your website, understanding how each is performing regarding conversions is essential.
Gaining a picture of your conversion rates and comparing these metrics to other pages on your site, will help you identify potential weaknesses or capitalize on strengths. In doing so, you’ll be able to replicate this success elsewhere.
These metrics will also help you gain an understanding of how engaging, user-friendly, and value-driven your content is to target consumers:
CPC is a valuable digital marketing KPI as it offers a clear-cut pricing model that will help you to make your campaigns as effective and cost-efficient as possible.
This KPI will help you to visualize your average spend on your various paid marketing activities including pay-per-click (PPC), display ads, and retargeting.
The aim is to drive your CPC steadily over time which will result in more effective, efficient, and economical campaign activities.
In this arena, here are two additional KPIs that you should track:
As a data-savvy marketer, you will understand the importance of tracking the ROI for each and every one of your initiatives or activities. Your digital marketing ROI dictates how efficiently you are spending your budget on a particular campaign. By drilling down into this all-encompassing metric, you’ll be able to tell if your investments are yielding tangible results.
In this case, the higher the ROI, the better. A solid ROI means that your campaign spend is effective. Should your ROI prove to be low, you’ll be able to drill down into your weakest areas and adjust accordingly.
Read: Targets and KPIs: your essential toolkit for more practical steps on working with the right KPIs for digital marketing.
KPIs for digital marketing that don’t matter (or offer little value) 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.
Take Google Analytics for example. Some 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 an action? Not necessarily.
Sales conversions, on the other hand, give you a reason 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.
One of the best ways to succeed with KPIs for digital marketing is knowing what to avoid. Here are the five types of vanity metrics you should take with a huge pinch of marketing salt.
More website visits imply your marketing team did something amazing, right? Not always. More visits to your website is usually a good thing, but it’s hard to determine what actually made the spike happen-and to replicate it.
A lot of times, you’re guessing without the right metrics in place. Was it something you did? Something someone else did? A share by an influencer? A piece of content or story from years ago that resurfaced? You see how a vanity metric like this can lead you astray. Plus, it doesn’t really matter how many visitors come to your website; it matters how many convert into customers.
Social media followers can be purchased by any individual or brand with a little extra cash. They don’t mean much. While it’s true that having a large audience can suggest that your brand is posting valuable and helpful content, your followers’ intentions can also be very diverse.
Even less valuable to your business is your number of impressions on social media (the number of times people saw your content, whether they engaged or not). It’s great if a lot of people see your content, but it really doesn’t mean anything. Instead, measure content shares (which show confidence in your brand and value in your content) and the number of customer conversions generated by social media (using UTM parameters to track the source).
Read: Improve Your Campaigns With These Critical KPIs to boost brand awareness and grow your audience the right way.
Like sharp increases in website traffic, lead volume can look far better than it is due to an increase in advertising spending.
In general, your marketing team should be focused on finding customers, not leads. If you stuff low-quality leads into your funnel, your sales team will eventually take notice. Instead, focus on the number of qualified leads you’re delivering. You want your marketing efforts to attract prospects who actually have a need for your products and services.
Subscriber growth has often been misused as a measure of company growth, without any attention paid to the resulting leads or revenue that comes from these new subscribers. Many newsletters are launched without a coherent strategy for the long-term. You can’t just ask for sales in your newsletters; they’re more about education and nurturing your audience with content they care about. Instead of focusing on your number of newsletter subscribers, measure the number of new leads you generate each month as a result of them.
To drive engagement and put readers on the path to conversion, make sure there are purchase CTAs within the newsletter and any landing pages to which they link.
Share of voice is a metric that measures how frequently your brand is mentioned in comparison to its competitors. This metric is used to understand brand awareness, trustworthiness and audience preference. But, there are a few issues with this metric.
First, you’ll probably need to use advanced tools to accurately track share of voice. These are often expensive and still not completely accurate. It’s also easy to manipulate the share of voice figures. As an example, a company may get a completely different share of voice figures from its tools, PR team(s), and internal calculations; it’s just difficult to track accurately across the board.
Now that you know what to avoid, let’s look at the metrics that will help make your next digital marketing campaign a success.
Brand campaigns are a long-term proposition to achieve broad reach and to reinforce the central message of your company and products. A brand building campaign consists of regular, consistent messaging and helps a company develop its brand reputation. A good example is Coca-Cola. The brand needs to come up with regular creative campaigns that reinforce the Coca-Cola brand and encourage you to choose it over competitors.
If Coca-Cola stopped investing in brand development, competitors such as Pepsi would swoop in and erode its market share. When planning a brand digital campaign, the types of metrics you should focus on are:
Read: ‘10 Ways to Grow Your YouTube Channel’ for some essential brand-boosting tips.
Direct response campaigns are those that include calls-to-action, and the main aim is to prompt immediate customer action. The goal of direct response campaigns is to generate immediate business.
Direct response campaigns are typically trackable. That is, when someone responds, you know which advert and which medium was responsible for generating the response. This is in direct contrast to brand marketing, where no one will ever know what advert compelled you to buy a can of Coca-Cola. Since direct response campaigns are measurable, you know which adverts are being responded to, how many sales you’ve received from each advert, and exactly how effective each advert is. You then drop or change adverts that are not giving you an ROI.
A good example of a direct response advertiser is the online travel agent Booking.com. Booking.com is concerned with getting you the best deals – and less concerned with building brand image. When it comes to direct response campaigns, some of the metrics you should be optimizing your campaign for are:
To sharpen your data-driven marketing skills and take your campaigns to the next level, enrol in DMI’s industry recognized web and data analytics course.
You will gain the knowledge and confidence to put data-driven theory into practice at a pace that works for you. It’s time to get ahead of the pack by understanding how to use data to drive leads and sales.
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