Digital Marketing KPIs are used by companies of all sizes to measure their web marketing results: here are the 5 most popular metrics you should monitor to gauge the success of your online strategies.
Digital Marketing KPIs are used by companies of all sizes to measure their web marketing results: here are the 5 most popular metrics you should monitor to gauge the success of your online strategies.
In a way, working with digital marketing is like being in a relationship: you should always ask, "What have you done for me lately?"
Not because it is an unreliable method-the reason is that you need to measure the results to see if you are using the most effective strategies for your business.
The beauty of web marketing, in fact, lies precisely in the fact that almost anything can be monitored.
If you're doing a digital campaign, for example, you can't simply rely on your idea of how it's being perceived-the only way to determine whether you're achieving your goals is to monitor quantitative data.
However, it may seem to you to be a far from simple undertaking....
Digital marketing campaigns are often complex, with many social media platforms, emails, Web site pages, blogs and other online tools to help you make connections with your target audience.
It does not seem easy to figure out what works and what is a waste of time and money.
What's more, the data you might collect is useless if it is not related to your business goals.
So here's where they come in: the Digital Marketing KPIs, That is, the key performance indicators of web marketing strategies.
They are critical for measuring campaigns with quality and accuracy: they show you the performance of actions taken, so you have a broader view of what your efforts are generating.
By tracking the right KPIs for your business, you will be able to measure the most meaningful analytics and make more informed marketing decisions.
So read on: you will find out what Digital Marketing KPIs are, why you need to consider them, and what are the main metrics you need to monitor for the success of your business.
What is a Digital Marketing KPI?
As I have already explained in this article, KPI stands for Key Performance Indicator: translated, they are the key performance indicators, i.e., measurable values useful for evaluating some aspect of your company's performance and activities.
KPIs can be related to any part of your business; you need them to monitor the progress of your strategies and to understand whether or not you are achieving your goals.
Specifically, Digital Marketing KPIs are those metrics you need to measure and monitor the performance of a particular digital marketing strategy, campaign or channel.
They can be, for example, KPIs of lead generation, KPI of brand awareness, KPI of sales, KPI of search engine optimization (SEO) and so on, and can come from multiple types of tools and platforms (social channels, PPC tools, web analytics tools such as Google Analytics, lead conversion tools, etc.).
They then show the performance, in numbers, of a specific action in digital marketing-their function is to make you aware of how close or far what you are doing is from getting the results you want.
In fact, the selection of KPIs must match your objectives: you can use the ones you prefer (and as many as you like), what matters is their effectiveness in helping you analyze the strategies you execute.
What are the most important Digital Marketing KPIs?
Choosing the right Digital Marketing KPIs is not a one-size-fits-all decision: the best metrics to monitor for one company are not necessarily the same for another.
To choose the best KPIs for your business, you need to look at your goals and work backwards. For example, if the follow-up of the lead is performed entirely over the phone or face-to-face, there is no need to track KPIs of the content marketing.
Regardless, it is important that the values you choose meet SMART criteria: that is, they must provide a specific outcome that can be measured, that can be identified once achieved, that is relevant to your goals, and to which a time frame can be applied.
In general, consider selecting both those KPIs that we might say of "effectiveness," that is, that show you the overall contribution that digital marketing is making to your business, and those of "efficiency," which help you check how well your funnel is working.
At the same time, it is important that you know what not to monitor.
The ease of tracking any digital marketing KPI can in fact be a double-edged sword and lead you to check things that are not really valuable, wasting your time and energy.
When deciding which metrics to monitor, consider whether the resulting information will provide useful insights into how to improve your bottom line.
If it's something you can't have an impact on and can't change, it's probably a so-called vanity metric (like likes on Facebook without a targeted campaign behind them), so there's no point in controlling it.
Why measure Digital Marketing KPIs?
In a Digital Marketing plan, first define the goals, and only then choose the strategies-that way the results will attest to whether your choice was the right one.
To do this, KPIs are indispensable.
So here are some reasons why you should consider spending some of your time identifying and monitoring web marketing metrics:
- You will be able to reach the specific target audience for your business more easily;
- You will know when and how to target your strategies because of the feedback gathered from the data;
- Watching your metrics will help you save money in your marketing budget by focusing on ads and methods that work;
- Measurement saves you time by showing you where to refine your message to connect directly with potential customers;
- Metrics help you create benchmarks that show real growth and overall return on investment.
Monitoring your KPIs is necessary to get a better idea of performance and have a clear picture of what is working and what is not. If your media strategy generates a profit but you have no idea where it comes from, you will never know where to invest your budget.
KPIs in digital marketing guide you to produce specific results, measure progress, and quantify what would otherwise be intangible benefits-without them, you run the risk of conducting activities without direction.
5 KPIs to Monitor in Digital Marketing
As I told you, there are no KPIs that are better than others in absolute terms.
The choice of the parameters you are going to measure depends a lot on the type of activity you do, the strategies you implement, and the goal you intend to achieve.
That said, there are 5 Digital Marketing KPIs that certainly represent particularly important values that could make a difference in your strategy-here they are.
#1 Click-Through Rate (CTR)
A common key performance indicator is click-through rate or CTR.
This metric refers to any digital campaign in which there is a link that encourages potential customers to click and go to a specific landing page; you then need it to evaluate the success and effectiveness of your communication efforts.
You can calculate it with this formula:
CTR = (Total clicks on the ad / Total impressions) x 100
CTR is important to measure as it is a direct indicator of your customers' engagement with your digital marketing activities.
#2 Bounce Rate
Bounce rate is a marketing metric used to analyze your site traffic.
Expresses bounce rate: describes when users arrive on a page and then leave it without doing anything else, thus showing you potential lost sales.
Said otherwise, the bounce rate is inversely proportional to engagement: it will be higher the lower the user engagement.
This metric can show you when your website is not performing well and may be ready for a change or upgrade.
It is expressed as a percentage, and you can calculate it with the following formula:
Bounce rate = (single page visits/inbound visits) x 100
To learn more, read my article: What is bounce rate? 3 reasons why you need to know it.
#3 Cost per lead (CPL)
This metric shows the individual cost of each earned lead (i.e., each individual who expressed interest in your product or service by completing a goal).In this way, you can understand how much money you spend to get a new contact.
The goal is to assess whether the amount invested is compatible with the efforts applied to obtain the lead.
It is a KPI that thus measures the cost-effectiveness of your marketing campaigns when it comes to generating new leads for your sales team and provides you with important data to use in calculating ROI.
By measuring the cost per lead for different web sources, you can focus on the digital activities that will be most profitable for your business and reinvest your money accordingly.
Cost per lead is a channeling metric that is part of the overall customer acquisition cost (CAC), along with, for example, cost per MQL (marketing qualified lead).
It is just one of the many parameters of web analytics to examine and it is important that you do not confuse it with others, such as the CPA (Cost per Acquisition), the CPM (Cost per Thousand) or the CPC (Cost per Click).
To calculate this, you first need to know the number of leads generated in a given period and the amount of money you spent on that particular campaign. Next, divide the total marketing spend by the number of leads generated:
Cost per Lead = Total marketing spend/Number of leads generated
To learn more, read my article: Cost per Lead (CPL): formula and meaning (+4 suggestions).
#4 Conversion Rate
Conversion rate (conversion rate) tells you how effective you are at converting your online audience into paying customers: it measures the ratio of the number of users who have made a conversion to the total number of visitors.
A conversion is what happens when someone clicks on your ad and then performs an action that you have defined as important (thus referring to the m momento when a user responds to a call-to-action).
This could be the actual purchase, but also the opening of an e-mail, enrollment in your premium newsletter or registration to a free webinar. In short, depending on the type of business you do, this KPI could be measured on different objectives.
The higher the conversion rate, the more effective the content and the more value for money you will get from your campaign.
You can calculate it this way:
Conversion rate = (no. of conversions/no. of clicks) x 100
#5 ROI
This is perhaps one of the most important Digital Marketing KPIs, because it effectively answers the question, "Does this digital stuff work?"
In fact, ROI (Return on Investment) measures the ability of a marketing campaign to generate new revenue, relative to its overall operating cost.
It is a financial metric that compares the gain or loss of an investment against its cost.Among its many applications, in marketing it is one of the most important indicators for identifying the most effective channels for engaging and converting customers, as well as for better managing the budget for your advertising campaigns.
ROI is expressed as a percentage, and to calculate it you simply divide the net profit (or loss) of an investment by its initial cost. Obviously, the higher the ratio, the greater your gain.
Here is the formula:
ROI = (net profit / invested capital) x 100
It thus differs from other metrics such as ROAS, the return on ad spend: the latter is also a profitability index that measures the efficiency of your advertising investments, expressing as a percentage the ratio of revenue generated by an ad to each euro spent on it.
The difference between the two is that while ROAS is specific and focuses solely on the profit generated by direct spending on an advertising campaign, ROI measures the total return on an investment based on the overall ratio of revenue to costs and is therefore a "broader" metric, we might say.
To learn more, read my article: How ROI is calculated and what it is used for (formula with examples).
Conclusion
Although the Digital Marketing KPIs I've just shown you are critical for tracking progress and demonstrating the effectiveness of your digital campaigns, they become essentially useless if you don't use them to make informed decisions about your goals, strategies and tactics.
So I recommend that you use the data you acquire to optimize your actions, using critical thinking to determine why something is not working and acting accordingly to change it.
Finally, I hope this article will help you focus on the right metrics so that you have more visibility into the status of your digital campaigns.
But tell me, what KPIs do you measure?
Let me know in the comments!