KPIs and Targets

Digital Marketing - Study Notes:

What are KPIs?

A key performance indicator (KPI) is a specific metric that helps you to measure and track the progress you’re making towards delivering against a strategic objective or business goal. KPIs also provide insights by helping to determine what works, or doesn’t work, to help achieve a specific benchmark. And many organizations use KPIs to help assess the value added by specific costs or expenses and to support data-driven decision-making.

Managers, business owners, and stakeholders value KPIs, as they are measurable data points that demonstrate the advantages of your strategy. KPIs should always be included in your strategy document. In particular, they should be included as part of your objectives, audiences, channels, and measurement sections. You may also hear KPIs referred to in relation to Critical Success Factors (CSFs). CSFs are elements that a business must achieve to hit its objectives. KPIs are the quantitative evidence that these CSFs have been met.

To help organize your KPIs throughout your strategy document and presentations, you can categorize them into different KPI groupings. This will help stakeholders to remain focused on the KPIs that are most relevant to them when you are presenting your plan.

Organizational KPIs include:

• ROI
• Profitability
• Number of customers

Customer KPIs include:

• Net Promoter Score ( or NPS)
• Customer Satisfaction (or CSAT) level

Digital marketing campaign KPIs include:

• Conversion rate
• Clickthrough rate
• Cost per lead

Targets

Targets are what you hope to achieve with your strategy. They are expressed as numerical values, such as number of number customers or percentage increase in engagement. You can use them as indicators of success or failure before, during, and after your strategy.

Your targets are generally outlined in the SMART goals that you set before you start preparing for the implementation of a digital strategy. For example, your goal might be to improve your clickthrough rate to 30%, when the current benchmark is 10%. Following SMART criteria, this information is both specific and measurable. You should have also attached a timeline to it. So, your target is to increase your clickthrough rate by 20% over a three-month period.

It is important to set realistic, measurable targets for KPIs and to set a specific timeframe for each. Your KPIs are the metrics you use to see if you are on track to achieve your overall SMART objective. Oftentimes they are related to time, so by the time you are 50% through your strategy, what metrics do you expect to have achieved by this point? This way, as your strategy progresses, you will be able to see if you are on track or ahead or indeed behind, so you can make the adjustments required to get back on track rather than waiting for the end of the campaign to see if you achieved your goal. KPIs alert you to the success of your strategy while it’s live rather than waiting until the end when it is too late so you can use KPIs data to make decisions while you still have enough time to influence the performance and achieve your goals.

Measuring targets

‘Baked-in’ measurement is measurement that is decided upon ahead of any activity. At every step, a campaign and the activities surrounding it are designed with measurement in mind, and specifically baked-in measurement.

Once you identify how you’ll measure an activity before it goes live, you can then include measurement throughout the asset creation process.

You can create your own scale of measurement for a KPI, ahead of an activity or campaign.

Firstly, set the time period for measuring the KPI. This could be one of three options:

• Repeating time period: This takes place at intervals over a one-year period. For example, the KPI may be measured on a daily, weekly, or monthly time interval over the course of a one-year period.
• Rolling time period: This is measurement that occurs over any continuous amount of time, such as a 30-day period.
• Fixed time period: This refers to measurements conducted on specific dates in the year.

Ensure that digital marketing actions and tactics are measured consistently using one of these three time periods. This will enable you to determine if you are on track to delivering strategic objectives.

You can also use tools such as GA4, Google Ads, or Meta Ads Manage to report on the metrics that you’re tracking. These reports can demonstrate the successes or failures of your digital marketing actions and tactics. For example, a report could include metrics that highlight your best and worst performing campaigns and creative messaging. You can also report on which campaigns or ads drive the most conversions, or potentially drive none at all. Reports can also highlight which ads generated an unacceptably high cost per conversion. With these tools and insights gleaned from your reports, you can prioritize the best performing actions and withdraw the worst. Typically, this type of optimization leads to better results for your budget and resource investment.