Know Which Digital Marketing KPIs to Measure
The best thing about digital marketing is that we can measure everything.
The worst thing about digital marketing is that we can measure everything.
Fortunately, you don’t have to measure every bit of data you get. There are, however, a handful of digital marketing KPIs that you truly need as a baseline.
Consider these marketing metrics your starting point – they’re like the vitals your doctor takes at a checkup. If any of these metrics show that something is off, that’s when you should dive deeper into the data, identify what’s happening and course correct.
When you’re measuring digital marketing effectiveness, you need to focus on two types of metrics: Business metrics and marketing metrics.
Business Metrics: Are We Growing the Business?
Real talk: All of your marketing efforts need to tie back to company revenue in some way.
That means every marketing metric needs to ladder up to your business metrics. And every business metric should ladder down to specific marketing metrics. If your marketing strategy isn’t tied to the company’s overall goals, then what’s the point?
Let’s look more closely at the business metrics you should keep on your radar:
Sales Data
Your sales data is pretty straightforward. You’ll want to report on:
Customer Data
For customer data, you should measure:
Understanding Customer Acquisition Cost (CAC)
Remember when we said that business metrics and marketing metrics impact each other?
It’s great to know you’ve closed 16 new customers, but how much did that cost you? Was it done profitably?
Customer acquisition cost is an important business metric because it tells you how much you spend on average to get every new customer. And it’s relatively easy to determine:
Marketing and Sales Costs =
(salaries, commissions, bonuses) + (software, agency fees, advertising spend)
CAC Example:
Marketing and Sales Cost = $2,000
New Customers = 16
$2,000 ÷ 16 = $125 per customer
Take all of your marketing and sales costs (i.e., how much you pay out to employees, software and agency fees, and your advertising expenditures) and divide that by the number of customers you acquire in a given time period.
In most cases, you want a low CAC. But there are legitimate reasons your CAC may be high or trending upward.
For example, startup companies can have high CACs because they have to spend more to acquire every new customer. The same goes for existing companies that launch new products or service offerings. However, if there’s no reasonable explanation for a high CAC, that’s when you start making adjustments.
In other words, you can’t look at your CAC in a vacuum. Measuring over time, monitoring trends, and considering other factors will help you see the big picture.
Now let’s look at marketing metrics.
Marketing Metrics: Are We on Track to Reach Our Business Goals?
Marketing metrics help you understand if your marketing strategy is on track to achieve your business metrics. Think of this data like an early warning system – they help you spot problems before they impact revenue.
Marketing metrics also highlight where you’re hitting it out of the park. That’s where you add more fuel, step on the gas, and surge ahead.
Typically, we recommend tracking marketing data by channel:
You can see from this image that within each channel, there are a number of marketing KPIs you should measure. This is by no means an exhaustive list! Consider these KPIs your starting points to give you a feel for how well each channel is working or not working.
Each channel has specific KPIs to track that can help you understand how effective that channel is.
Website Data
Website metrics focus mostly on sessions and clicks.
A session happens when a user interacts with your site for a period of time. You may have heard the term “visit” – it’s the same thing. During a session, the user may visit multiple pages, interact with the site, make purchases or download content. A session ends when there’s no activity for 30 minutes or at the strike of midnight.
Clicks happen when a user follows a link on your website. You can find that data in your Google Search Console account.
Another helpful metric is bounce rate – how many people visit your website and just as quickly hit the exit. If your website is informative and engaging, the reader will stick around – translating to a low bounce rate. But if your bounce rate is high, that may be a sign people are not engaging with your content. Perhaps look at both your copy and the user experience; maybe people are bouncing because the page is a dead end with no navigation or CTAs?
But wait! What about search rankings?
To be honest, most companies get overexcited about search result rankings. They spend hours poring over sites like Moz or SEMRush, shaking their fists at the companies in the coveted #1 spot.
But, it’s entirely possible to rank on the first page of Google for a great keyword and have zero clicks. In that case … Houston, we have a problem.
It’s not that we don’t think website ranking is a good metric – but it can be misleading. Instead, put context around those rankings by looking at your clicks per queries in Google Search Console. That will tell you which keywords are actually bringing in business.
Inbound Marketing Data
Speaking of keywords, inbound marketing is designed to attract new leads with the information customers are already looking for online.
Organic traffic volume tells you how many users found your website simply by doing a search on specific keywords. This measures your keyword effectiveness.
By tracking website leads that originate from the forms on your blogs, pillar pages, and pillar posts, you can evaluate which of your blog posts and specific content offers are generating more leads – and where you may need to make adjustments by switching gears or even optimizing existing blog posts.
Digital Ads Data
While many marketers like to measure the clicks their digital ads generate, your real goal with digital ads is conversions. Think of clicks as the equivalent to leading horses to water, but those horses have to drink for you to see any results. That’s where conversions come in.
But what constitutes a conversion? Is it a purchase, a registration, a download, a social media like or follow? In order to measure conversions, you need to know what you’re measuring for each digital ad.
Email Marketing Data
With email marketing, we look at clicks as well as opens. Both are important, but the holy grail of email marketing is when the reader clicks on an email link.
By measuring both clicks and opens, you can evaluate the effectiveness of your subject lines, your email content and your CTAs. If you’re seeing low open rates but high click-through rates, it’s probably time for some subject line A/B testing. If you have the opposite problem, the content of your email may be the problem.
Email list growth measures if you’re reaching more people. This metric isn’t even on the radar at many companies, and it should be: A bigger email list means more potential leads, more clicks, more conversions, more sales and more revenue.
Social Media Data
Generally, there are three metrics to focus on with social media. You may not get direct revenue out of likes, but they are a strong indicator of how engaging your readers find your content, which can work in your favor with the algorithms in these platforms, putting your content in front of more people.
Shares are the gift that keeps on giving. Not only do they extend your reach (for free!), they’re a great indicator of how buzzworthy the post is. If you notice a few people consistently sharing your content, you may be able to approach them with influencer or affiliate marketing ideas.
And clicks, as always, are key. Experiment with your messaging and monitor what changes result in better click rates.
Important: Capture Metrics Specific to Your Business
While the data and metrics we recommend makes for a great baseline, you may need other data points.
For example, at Clariant Creative, we have about 90% repeat customers, so the new versus repeat customer business metric doesn’t help us much. However, a software company concerned about customer turnover would find new versus repeat customers an incredibly valuable metric.
The best way to determine which metrics to measure is by looking at the numbers that will tell you whether or not your business is growing, and whether your marketing strategy is truly helping it grow.
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