Nov 24 | Categories: Info
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If you look at any advertisement related to an increase in business, you’ll probably see an arbitrary line graph or plot whose little upward arrow indicates growth. However, most graphics seem to exclude which variables the graph is actually showing off. When you see one of these graphs that represent growth, even if you don’t have the metrics right in front of you, you can piece together if the graph is positive or negative.
These advertisements are meant to suggest that the business in question is doing so well that it’s growing. But what happens when you actually put those graphs into practice in your own marketing strategies? Welcome to Marketing Key Performance Indicators, also known as KPIs.
In this post, we’ll take a look at what marketing KPIs are and how you can learn to read, understand, and use your own KPIs to make conscious marketing decisions for your business. Digital marketing KPIs are your friend, so it’s time to get acquainted!
Here is one of the most common KPI questions we hear: What is a KPI in digital marketing?
KPI stands for Key Performance Indicators. KPIs are used in digital marketing to track your marketing efforts.
By definition, they are quantifiable measurements that can show how your marketing campaign performed. Based on your KPIs, you can evaluate your return on investment (ROI) and other key components to your marketing spending, budgeting, and overall performance. KPIs are a resource you can use to continue with or improve your future marketing campaigns and strategy.
Your marketing KPI is tied directly to tracking your digital marketing goals and metrics. KPIs can include tracking results from all marketing sectors, including:
KPIs are a tool used to put numbers into practice to get a calculable value on almost any aspect of your marketing strategy. Though they can be applied to all sub-marketing strategies, the best KPIs for marketing are those that will be most efficient for your business goals. Focusing your efforts on what will drive your business may be better for your company than stretching your focus to include less important metrics.
The trickiest part of KPIs and choosing which marketing KPIs to concentrate on is ensuring that you pay attention to the most pertinent values while not missing out on the whole picture by choosing to focus on just one KPI that may seem like the most important takeaway from critical data. That’s why being tactical about your digital marketing KPIs is crucial for peak efficiency.
Successfully choosing which KPIs to focus on means first evaluating your business’s goals. Before you start tracking any KPI marketing metrics, you need to assess where your digital marketing tactics are focused, what the intentionality behind your marketing strategy should be, and how you want to build a marketing strategy to begin with. Looking at your current marketing foundation will give you a base value of where you want to grow. Depending on where you want to focus your marketing energy, you can decide on which KPIs will be best for your business.
As a digital marketing agency, Metric Marketing knows that digital marketing intersects with facets of itself. You cannot just practice one form of digital marketing without impacting the other portions of your marketing strategy. However, it’s important to have attainable goals. It can be easy to stretch efforts too thin and lose marketing stamina—and thus positive outcomes. Yet, by concentrating on specified aspects of your marketing, you can take it to the next level.
When discussing key performance indicators, marketing decisions are better formulated when they are data-driven. Quantifying your marketing goals can make for a strong, established marketing strategy.
A tip about digital marketing KPIs: You can make more informed decisions when you track your marketing efforts over a period of time. It’s also important to analyze these metrics and discuss with your team if you think you have the capacity to add more KPIs or if you should instead be focusing on one above all others. When it comes to your marketing KPI, consistency is key.
When considering which digital marketing metrics to track, the most important tracking method is to focus on what will produce the most actionable results. The best KPI marketing topic to focus on will differ from business to business, depending on your unique goals. To best decide which KPIs are most important, you need to take a subjective look at your business needs and which KPIs you will benefit from the most. Let’s take a look at the eight best KPIs for digital marketing and some marketing KPI examples.
ROI KPIs indicate the amount of profit you generate from your marketing campaigns. ROI is the difference between how much you spent on a campaign and how much you made from the campaign. The official formula to measure your digital marketing ROI is:
ROI = (sales growth – marketing investment) / marketing investment
Every business wants a positive ROI. A positive ROI means that your marketing efforts are bringing in more money than you are spending on them. Knowing your ROI is a great place to start—and continue—with digital marketing KPIs. Knowing the exact value of your marketing efforts can show you what’s working, what you should continue with, and how to readjust moving forward.
There are also ROIs that are quantifiable outside of finances. Of course, you are putting time, effort, and money into your business’s marketing efforts. However, some ROIs can be measured in:
In theory, each of these can be its own KPI that can also be used to track your long-term ROI. Your returns do not necessarily have to be financially tangible for them to be considered a marketing KPI. By tracking your audience awareness and then comparing them to your sales—or other variables—you can combine KPIs to see a full-scale ROI.
There are quite a few SEO digital marketing metrics to keep track of, but we want to capture them in one umbrella KPI, which is SEO KPI. We firmly believe that SEO is one of the most crucial digital marketing practices your business can work on so that you have a successful, growth-oriented online presence.
SEO, which stands for search engine optimization, is an intentional effort to increase your online presence and digital quality, achieved through data-driven analysis. At Metric Marketing, we pride ourselves on using data and analytics to increase SEO. And SEO KPIs are one of the tools to base our research on. SEO KPIs include:
Each component of SEO KPIs can be measured and used to implement new and improved SEO strategies for growth over time.
Keyword KPIs track the use of keywords in your content by looking at valuable keywords, phrases, and the frequency they are used. Looking at how your keywords rank over time will show you how well your content/site is doing—or not doing—based on your purposefully placed keywords.
Search traffic KPI marketing will show you just that: your search traffic. As there are multiple ways that people can reach your website, you can see:
Your bounce rate is the number of people who, after landing on your webpage or webpages, immediately leave. A bounce is a single click away from the page the visitor just landed on. Bounce rate KPIs will show you what pages have the highest bounce rate, which means there is a high volume of users who immediately click away. If users immediately leave a particular page, the user’s attention was drawn elsewhere, or the page did not meet their expectations.
You will also be able to see the lowest bounce rates, which means your visitors liked what they saw and wanted to continue engaging with your site.
Comparing bounce rates between pages will show you what’s working and what is evidently deterring people from staying for a longer period of time on a given webpage. Knowing your bounce rate KPI can provide information that will help you better attract website visitors and maintain longer views.
An essential SEO tool is building backlinks. Backlinks are links from another website to your website. Other types of links include:
If you have a backlink from a reputable website, your SEO can increase. Tracking backlinks is especially important because you can see who is linking to your site and how many websites are linked back to yours. You can also see how these backlinks are affecting your website traffic.
Using social media is a way to both have direct contact with your audience and grow your online presence. It’s a way to develop and evolve your business’s brand and users. Social media gives you the power to humanize your business for your followers. You can engage with those who already know you and those who want to get to know you.
This is why social media marketing KPI tracking can be useful to developing your social media tactics. Social media marketing KPIs can be used to see both how your social media is growing and affecting your overall business goals.
Metrics to track from your social media include:
Pro Tip: Every social channel you’re active on should have its own social media marketing KPI. This way, you can compare the metrics on each channel. Different social media platforms have their own tone and audience, so variance of strategy between platforms is essential and a great way to track which channels generate the most conversations.
Your traffic-to-lead ratio measures how many website visitors become actual customers/leads. Lead generation is directly correlated to the prosperity of your company, so it’s crucial to know what’s working and what’s not working in the pipeline from traffic to leads.
Some factors to consider about website leads and traffic include:
Your traffic-to-lead ratio will show if there is a disconnect—meaning the user decided not to follow through with a lead—and where in the marketing flow the exit occurred.
Tracking the traffic-to-lead ratio will help you decide when and where website changes need to happen. Maybe content needs to be changed to better answer the questions your potential leads may have. Maybe there is a formatting issue with a specific page. Whatever the issue may be, tracking your traffic-to-lead ratio will reveal how well your digital marketing and digital presence is doing in regards to lead generation.
Didn’t we just talk about leads and evaluating losing leads? Yes, we did! So here’s the difference between traffic-to-lead ratio and lead conversion rate:
Your conversion rate is one of the best digital marketing metrics to track because it is the final step of your sales funnel. You can understand how your sales performance is achieving goals and which marketing strategies have contributed to your sales success.
Lead conversion is calculated using the following formula:
Lead Conversion Rate = (# of leads converted in x time / # of leads created in x time) X 100
Lead conversion rate KPIs will track your conversions overall and within certain periods of time. You will be able to see your overall conversion rates based on date/time and marketing strategy.
Your customer lifetime value (CLV) KPI measures the expected value that a customer will contribute to your company’s profitability over the entire relationship with that customer.
The ultimate goal is to increase the customer lifetime value to maintain the relationship and engagement, while also increasing their satisfaction. Increasing your customer lifetime value means producing lead nurturing campaigns. Essentially, keeping your current customers satisfied provides you value in several ways:
Having personal relationships with loyal customers can help increase your CLV.
There are several ways to calculate CLV. We like to use the following equation. And remember, when you work with Metric Marketing on your KPIs, our team can do the math for you.
CLV= customer value X average customer lifespan
Customer value = average purchase value X average number of purchases in a given time frame
This is one of the most valuable marketing performance metrics because it is a measurement based on how your relationships with current customers may continue.
Let’s now take a look at leads as an individual asset. Your cost per lead (CPL) marketing KPI is how much you spend on digital marketing to generate your leads. The costs attributed to cost per lead can help you with your budgeting for advertisement and type of advertisement.
For a marketing metrics example, let’s say you have an advertisement that you put out on two platforms. You get 50 leads on platform A and 25 leads on platform B. However, you spent the same amount of money for paid advertisements on both platforms. Based on the CPL KPI, you can make an informed decision about whether you should:
Analyzing your cost per lead will give you an idea about how you should prioritize your marketing efforts or redesign the ones that lack positive outcomes.
To calculate CPL, you can use the following formula:
CPL = cost of your lead generation effort / total number of leads for your lead generation effort
Follow this formula for each one of your lead generation efforts to see the variance between your CPL outcomes per advertisement. Following your marketing KPIs will also reveal factors about what’s working over time, and, if some factors clearly aren’t working, the efforts you need to refocus on.
CPL KPIs are powerful tools for looking at each individual marketing campaign on a singular level.
A significant portion of SEO growth is found in the user accessibility of your web pages by making your site mobile-friendly. 85% of Americans own smartphones, meaning access to the internet via smartphone is significantly higher than it was even just five years ago.
That’s why knowing the activity happening on your site via mobile phones can reveal how effective your site’s mobile capabilities are, which will ultimately affect your SEO and overall digital marketing efforts.
There are a number of mobile KPIs to focus on, the main three being:
Tracking smartphone KPIs can put you ahead of your competition while optimizing your users’ mobile experience, thus establishing trust and accessibility for your business.
Tracking your internet marketing metrics is not a one-and-done situation. Simply checking once does not show you value and worth over time. Being consistent and diligent about tracking KPIs gives you the power and capability that comes with awareness.
When you are aware of how your digital marketing is performing from a quantitative metrics perspective, you can make better data-informed decisions. Analyzing data gathered from your marketing performance metrics will dictate any decisions you need to make about changing future marketing efforts.
Here at Metric Marketing, we pride ourselves on achieving strong results through data analysis and avid research. Our research and decision-making is based on KPI marketing. Our team is made up of digital marketing experts who know the ins and out of all things marketing KPI. If you would like help with your KPI questions, measuring metrics, and/or deciding what to do in response to your metrics, contact our team today. You can call us at (734) 404-8714 or fill out an online contact form. We look forward to hearing from you!
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