Chances are, you already track certain KPIs but aren’t entirely sure about which ones are most significant for your marketing campaigns. The truth is, understanding key marketing metrics is crucial to the growth and success of every company because you’re more informed on areas that need improvement to make your next endeavor better each time.
What is a KPI in digital marketing? KPIs—or key performance indicators—are the metrics you use to track and measure your results. They are quantitative benchmarks set to track progress towards specified goals. According to Think With Google, metrics are a for leading businesses. As many as 89% of leading marketers use strategic metrics, like gross revenue, market share, or customer lifetime value (CLV) to measure the effectiveness of their campaigns. This is significant because the only way these businesses—and your business—can proceed to grow is by taking what you’ve learned from one campaign via digital marketing KPIs and continuously improving on the next with the results.
How to Define Your Key KPIs for Marketing
Before digging into each key marketing metric, you’re probably curious about which ones actually matter to your team, department, or company as a whole. Marketing KPIs measure how well your strategies are performing. So, it’s essential to define and delegate which KPIs mean the most to your strategies, long-term goals, and so on. There are a couple of fundamental questions to ask when defining your organization’s most important KPIs:
Whether measuring KPIs in one department or company-wide, objectives and long-term goals are something to think about. Next, you’ll want to choose KPIs capable of gauging and measuring the progress of your objectives.
Let’s discuss some digital marketing KPIs, their relevancy, and what they will reveal about your campaign.
Marketing Revenue Attribution
A marketing revenue attribution is important for businesses looking to optimize their future budgets by connecting their customer sales to advertising, resulting in this increase in revenue. Essentially, this attribution pinpoints what ads are working best and where you would do better to allocate your budget. This KPI answers two important questions for you:
With this information, you will be able to keep an eye on what is and what isn’t working in your content marketing and other digital marketing efforts. Better yet, this attribution will that isn’t performing well—from blogs and articles to social media platforms. You can track most of your efforts with this digital marketing KPI and measure how your pursuits affect your sales.
Marketing Attribution Reports
Known as a reporting strategy, marketing attribution gives sales and marketing teams more insight into the effectiveness of certain marketing actions on a sale or similar goal. However, a marketing attribution report uses pre-built models to show customers’ journey from when they interact with their first advertisement from you until they are converted. This gives insight into the efforts helping you get the sale and how marketing efforts are working together to make it happen. HubSpot suggests if you want to “decide which pages and/or marketing channels drive the most conversions.”
Customer Acquisition Cost
Customer acquisition cost is a digital marketing KPI that shows the total sales and ad spend needed to gain a new consumer. This can be a significantly helpful metric to track and measure since it will help you ensure you’re not overspending on acquisitions. It will also allow your marketing team to that can boost your number of acquisitions. This marketing digital KPI can be used to answer the question: How much does it cost to acquire a customer through digital marketing?
From there, you can choose a timeline to measure customer acquisition costs—yearly, monthly, quarterly—and start calculating that cost against customer lifetime value (CLV) to determine a ‘good cost’ (i.e., typically a ratio of 1:3 but varies).
To calculate customer acquisition cost, you’ll need:
The formula is:
Total Cost divided by the number of New Customers gained = Customer Acquisition Cost.
Digital Marketing ROI
Do you want to know what your return on investment is? Well, you must know ROI to assess campaign performance and maximize your efforts and results. ROI will tell how well you achieved specific objectives and help determine where you want to improve for better results next time.
Start by picking measurable objectives like awareness, site traffic, engagement, online sales, in-store traffic, or lead generation. From there, you want to stick to those goals and use ROI to determine the success of meeting those objectives.
Digital Marketing ROI formula:
(Sales Growth — Marketing Investment) / Marketing Investment = ROI
ROI is Important For Determining Budget
Depending on the ROI of your digital campaign, your marketing budget can increase or decrease with performance. This knowledge will be great for planning future campaigns and making more informed decisions to maximize your digital advertising budget. For instance, if a particular area of your digital marketing campaign—say, social media—is contributing the most to your ROI. Chances are you would do well to increase your budget in that area and vice versa.
Landing Page Conversion Rates
Landing page conversions are important for marketers interested in learning more about how many leads have converted (i.e., the number of visitors that completed your call-to-action compared to those who visited your landing page and did not take action).
Sales qualified leads (SQLs), in particular, are leads considered to be sales-ready. This means that they have officially taken action to contact a sales representative. Landing page conversion rates will show if your campaign is capturing these leads or not and better understand your close rate. This will also allow you to identify and evaluate the results to adjust your tactics for more appealing results.
When it comes down to successful landing page conversions, you have to be able to adjust your marketing at the drop of a hat to lead to better conversion rates. This marketing digital KPI will allow you to do that.
Lead to Customer Ratio
Likewise, the lead-to-customer ratio gives you more insight into whether your landing page is converting. If you notice that your landing page is getting a lot of traffic but not converting—this tells you that you need to make adjustments and change something to get it back on track.
Landing page A/B testing can be significant for showing you what needs to be done to improve conversions. This is where you only make small changes at a time, so you can identify and evaluate what was holding you back from conversions and make adjustments where necessary. This can include making adjustments to your:
Data Visualization is an important digital marketing KPI that uses visual elements to tell a story within data. This form of graphic representation is important for identifying trends and patterns that are more easily seen visually.
For this reason, you’ll find this KPI in the following visual formats:
The key to success with this digital marketing campaign KPI is to choose a data visualization that helps you communicate information the best way you can for your brand and team. After all, that’s for whom the information matters most. For instance, uses data visualization platforms like Motto and Cannabx:
A Few Important Things to Remember
Regardless of what digital marketing campaign KPIs your organization tracks, keep campaigns fresh and updated. One way to do this is by updating ad creative every few months. Another thing to keep in mind is that audience and audience preference can change frequently, so be sure to keep up with them and give them what they want. If you can, try to mix up your media by choosing different marketing tactics that complement each other for example a video that links to a recipe. Finally, don’t forget to keep thing real and to make sure you have a “human touch” by keeping eyes on feedback and performance.
An Agency Can Make All The Difference for Your Campaign
The importance of being nimble with campaigns cannot be stressed enough in marketing. When something isn’t working, you need to pivot quickly and adjust to ensure you’re getting the most out of this campaign and continuously improving where you can. Working with an ad agency like MNI can not only help you track, measure, and but can ensure you’re using the most up-to-date and beneficial best practices to maximize your results.
About the Author
@Janine Pollack is the Integrated Marketing Director at MNI Targeted Media and self-appointed Storyteller in Chief. As content lead for MNI’s Insight Lab, she leads numerous webinars to bring to life the brand’s commitment to knowing more so we can do more. Prior to MNI she worked with Fortune 500 companies and world-renowned institutions on thought-leadership events and content.