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E-Commerce Metrics

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Digital Marketing - Study Notes:

Key metrics

So, on a very regular basis, I will go into Google Analytics and look at some key metrics to understand how our site is performing. So, a very basic level, I'll go in and look at how many people do we have coming to our website on a given day, over a given period.

Where are those people coming from? So you can see the traffic sources that they're coming from. Are they coming from paid advertising? Are they coming from SEO? Are they coming from Facebook? Are they coming from the emails that we've been sending out?

Then I'll look at what our overall conversation rate is at a total level, but also at our individual level for the traffic sources, to see which ones are converting best.

And then also, you can see the total revenue being generated. And that's just a very quick snapshot that we can see. Are we getting more people than we had this time period versus last time period, or this time versus last year? Are they coming from similar-type sources? And are we selling more product? If there are trends there that are surprising, there's a huge amount more data that you can use from Google Analytics to dig into what is driving those differences to what you expect.

Custom reports

Let's look at a few more of the metrics that are available through Google Analytics.

Cart abandonment rate

You can get very detailed funnel analysis of your checkout. So, from the 100% of people that put something in their cart, what percentage of people eventually go through to purchase?

And you can see at which stages of the checkout process that they drop out. If they're dropping out at adding in your delivery address, or adding in your shipping address, or adding in their payment details, and if there's a major blocker at any of those stages of the checkout, it's going to have a significant impact on your conversation rate. And through using Google Analytics to see where that blocker is, you can then do further investigation and hopefully solve that.

New customer sales versus returning customer sales

You can already see where people are coming from. But you can also split that by whether they're new customers or returning, and see whether they behave in any different ways. You can also split the audience who are coming to your site in terms of demographics, splitting in terms of location, splitting in terms of the devices they're on.

There are a huge number of different ways that you can divide up the audience into smaller segments to get a more detailed view of how they're behaving.

Product affinity

You can see which products are being bought with other products on your site. Again, this can be very useful for deciding how you should lay out your products on your web page, which accessories you should offer with other products, which checkout deals that you should offer, which cart deals and uplift deals, that we spoke about earlier, you should be offering, based on the product affinity.

Product revenue

You can also look at the revenue per product and see which your top-selling products are. That might impact where you display those products on your site and what range you want to be developing, going forward.

Day parting

You can also look at day parting, so you can see when in the day people are making most of their transactions. And again, this can be very useful in determining when you should be doing most of your advertising efforts, and when you should have most customer service people on hand.

Cost per acquisition

You can feed in information about how much your overall advertising is costing, and then see how many sales that advertising is driving to get to a cost per acquisition. And this can be really important in helping you identify which sales are profitable and which ones aren't, so that you can spend more time and more effort driving the profitable sales to get more of them, and you can cut out sales that you're not making any money from, to make your overall business more profitable.

Return on ad spend (ROAS)

This just allows you to look at the amount of sales you are getting back for the ad spend that you're putting in. We can also look at the relationship between these e-commerce metrics and other data, and we can use this to evaluate how effective our advertising is being at driving profitable sales. And we can also use it to evaluate which channels and which type of advertising we’re using and which of those are driving the best results for our overall website.

Detailed analysis

So I can go into a little bit more detail on that. So for example, in Google Analytics, you can see all the different traffic sources. So you can see at a top-line level how much of your traffic is coming through from pay-per-click advertising, you can also see how much is coming from SEO, how much is coming from email, how much is coming from direct traffic to your website, and you can also break most of those down into a more granular level. So within email, you can see exactly how much traffic is coming from each email and how much revenue is generated from that traffic, and as a result, what the conversion rate is and even see which pages people visit as a result of going to those emails.

Likewise, with Facebook advertising, you can put Google Analytics tracking links in your Facebook advertising, so that when someone clicks on that Facebook advert, they come to your page. And Google Analytics captures that’s where they come from, and saves all the data from the people that have clicked on that link into a particular campaign. You can then analyze how many people you’re getting, what behaviors those people are going on to take, and whether they are going on to buy? So then, comparing this information with some of the other advertising channels, you can get an overall sense of how much money are we spending on these different channels, which of them are driving the most traffic to our website, and which of those traffic are most of those going on to buy. So you can get a really good end-to-end analysis of how profitable your advertising efforts are being and which ones are driving the right consumer behaviors.

Google Analytics can allocate responsibility or attribute sales in a number of different ways to advertising campaigns. So the most simple way it does it is through Last Click, so it effectively says the last click that someone clicked on before they came to our site or as they came to our site was from one of these channels, so organic, direct, paid, Facebook, email, and so on. And so you can see that, yes, there’s a split of people selling or buying products is based on those channels. However, it can go more detailed than that as well. It can also show you whether people bought or have been through any of those channels and then came back on a different channel to buy. So you can get a full breakdown of all the different ways that people have come and gone from your site, which pages they’ve been to, and so on, and then how they’ve gone on to purchase. You can get an overall sense of the value that the different channels are providing. A good live example of that might be that you might find that you’re doing a lot of Facebook advertising, and it’s driving lots of traffic to your website.

When you look at it on a last-click basis, the conversion rate is very bad, so people are coming to your site from Facebook, having a look around, and then not buying. Because if you just looked at it on that basis, you might decide, “Actually, Facebook is not a very good marketing channel for us. Let’s not spend our money on it.” However, if you look at the multichannel attribution of those Facebook advertising, you might find that, actually, Facebook is a big contributor to the first visit, and then lots of those people who didn’t buy come back through direct or through organic or through paid and go on to buy in the end. And so actually, Facebook is being the first introduction to your brand. They’ve had a look around, they’ve seen what it’s all about, they’ve gone off and done more research, they’ve thought about it, and then come back and bought in the end. And so that level of additional detail that you can get out of Facebook and out of Google Analytics helps you make the right decisions for your overall business and the overall profitability of your ad campaigns.

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Graeme Smeaton

Graeme Smeaton is the founder of Royal & Awesome. Along with a proven track record in defining and delivering marketing strategies that drive significant growth and create real shareholder value, Graeme is highly commercial. He has extensive experience managing PLs and other key financial statements, while being an operational board director of AFG Media Ltd, and has experience negotiating with suppliers, distributors and licensing partners.

By the end of this topic, you should be able to:

  • Identify the channels and formats used to generate e-commerce customer interest including e-commerce websites
  • Analyse user behaviour on an e-commerce platform
  • Critically assess opportunities for creating e-commerce conversions

    Data protection regulations affect almost all aspects of digital marketing. Therefore, DMI has produced a short course on GDPR for all of our students. If you wish to learn more about GDPR, you can do so here:

    DMI Short Course: GDPR

    The following pieces of content from the Digital Marketing Institute's Membership Library have been chosen to offer additional material that you might find interesting or insightful.

    You can find more information and content like this on the Digital Marketing Institute's Membership Library

    You will not be assessed on this content in your final exam.


      Applied E-Commerce
      Graeme Smeaton
      Skills Expert

      Marketing strategist Graeme Smeaton will introduce the key concepts of effective e-commerce and will teach you how analytics allows for refinement of the model. You will become familiar with the elements of a successful e-commerce website and the process of traffic generation. Graeme will also introduce you to various sales tactics, including channel selling. Finally, you will recognize how the e-commerce Customer Relationship Management (CRM) systems can help you maximize user experiences.