Online marketing has introduced unparalleled possibilities for marketing teams to collect precise and relevant data. Using this data, digital marketers can track performance and follow a data-driven approach over a subjective or intuitive one. This presents several benefits, such as:
- Ability to make data informed decisions
- Strengthen results from marketing campaigns
- Improve conversion rates
- Achieve greater efficiency
- Report the marketing performance to key stakeholders.
Confused which metrics to track for your digital marketing campaigns? In this blog post, we'll break down ten essential marketing metrics that you can measure.
10 digital marketing metrics to monitor
Impressions capture the number of times the content asset from your campaign has been "shown or displayed" on a website or app to potential or existing customers.
While impressions indicate how many prospects are exposed to your marketing efforts, it's critical to note that "shown" doesn't always imply "seen" by an actual human. That's because bots generate almost 40 percent of website traffic today, and the number of impressions doesn’t differentiate between those traffic sources.
The number of clicks is a basic measure capturing how many people click on an ad, to go to your website or webshop. Google Search Ads, Display ads, email links and social advertisements can all bring in clicks, and all these campaigns will show the number of clicks each campaign is getting. This becomes especially important to track if you pay per click for a campaign!
3. Click Through Rate
The Click Through Rate(CTR) is a measure of engagement and quality. If your CTR is higher, it usually means your content is more engaging to your audience. It is measured by tracking clicks in proportion to impressions. This number is often readily available in most platforms' Analytics Dashboards, providing valuable clues on how persuasive your campaign's copywriting, visual impact, and placement are.
Seasoned marketing professionals acknowledge that while many people see your content, only 3.17% of the target audience clicks on it (for Google ads in 2022). And for many social platforms, that number can be lower as well.
Because other than with search marketing, social, display and video aren’t intent-based. This means that the users who see your ad might not be looking for your product or service.
It is also key to realize that a good click-through rate must be followed by an optimized landing page experience to garner the desired action from the prospect.
Besides mapping the attention of prospects, you also need to explore how many prospects take the next desired step and convert.
Now, you may wonder, what are conversions?
Effectively, the number of conversions in digital marketing can be counted as the number of people undertaking the activity that you, as a marketer, define as the finish line.
- Signing up for your newsletter
- Completing an online purchase after seeing a paid ad
- Booking a demo with your sales team.
Tracking conversions requires following the customer through the different media channels and monitoring the outcome.
Setting up conversion measurements can vary across platforms, but once set up, it provides a clear indication of the ROI of your campaign. Tools like Google Analytics allow you to clearly identify and track these conversion goals.
5. Conversion rate
The conversion rate is an efficiency metric that captures the number of conversions as a proportion of the clicks you gather. Studying it helps ascertain aspects like whether your Call To Action and offer are performing well and if there's a disconnect in the customer journey between your landing page and ad creatives.
Conversion Rate = Number of conversions / Number of clicks received
6. Cost Per Conversion
Another important metric for tracking your campaigns is the cost per conversion, representing an average of your conversion costs. First, however, it is critical to define the right conversion action as per the stage of your business. A simple formula can help you calculate the cost per conversion:
Cost Per Conversion = Total spend / Total number of conversions
It is a critical performance marketing metric because it clearly shows which campaigns are efficient and which are not fetching adequate returns. Using this insight, you can plug in laser-targeted efforts to improve underperforming campaigns with experiments around campaign copy, visuals, CTA placements, landing page optimization, etc. Alternatively, you can decide if it's better to shift your digital marketing budget to other marketing channels where your campaigns perform better.
If you define the conversion activity as lead acquisition, then Cost Per Conversion is the same as Cost Per Lead (CPL) and captures the expense of turning prospects into leads or potential customers. Again, this can be irrespective of the lead source, derived from organic traffic or advertising activities.
Also read: Performance marketing strategies
Most marketers consider their campaigns effective when their Average Cost Per Lead is lesser than the Average Amount Spent by a consumer. In other words, when average revenue exceeds the average cost.
However, it's also worth pondering over the conversion quality since not all conversions are equal. For example, consider a converted lead cost of $100, using which a sales team can generate $10K of revenue. This is better for the bottom line than a cheaper $1 lead cost fetching a mere revenue of $10.
7. Search Impression Share
Search Impression Share is a performance marketing KPI that seeks to capture the frequency at which your campaign shows up in percentage terms. It’s relevant for Search Campaigns that are driven to enhance visibility for certain keywords.
Usually, the goal is to get this as high as possible regarding branded searches. However, in the case of generic searches, having a high Search Impression Share only makes sense if the ROAS (discussed below) is good.
It can be calculated as:
Search Impression Share = Impressions achieved on a search network/Estimated number of total searches
A 63% search impression share means that your ad showed up 63 times out of 100 times.
To improve this, you can experiment with increasing the relevancy of your ad copy, higher budgets, or adding more specific keywords. With time you can also understand the impact with other partners with outranking percentage that tells how often your ad ranked higher in the auction than another advertiser's ad or if your ad showed when theirs didn't.
8. Customer Acquisition Cost (CAC)
CAC is certainly on the list of key marketing metrics. Especially for SAAS businesses. CAC is a metric to measure the price your business pays (on average) for a user to convert into a paying customer during a particular period. This is captured by Customer Acquisition Cost and can be calculated as follows:
CAC = Sales and marketing cost / Number of customers acquired
Optimal CAC levels depend on the sales potential and business strategy. For instance, suppose that your manufacturing company has a $50 CAC on average, and a new customer could be worth thousands of dollars to your enterprise. However, the same $50 may be unsustainable if the average customer spends only about $ 25 per purchase.
9. Return on Ad Spend(ROAS)
ROAS helps assess the effectiveness of advertising efforts and how they affect the bottom line. In the simplest terms, it's the equivalent of ROI for ad spending. You can calculate it using the formula:
ROAS = Revenue / Advertising Spend
Any number greater than one suggests that the marketing campaigns are fetching more dollar inflow than outflow. Thus, it's helpful to effectively measure performance and guide future spending, strategy, and overall marketing direction.
However, it's crucial to realize ROAS is not the holy grail of marketing. That's because the sales cycle length varies and can be longer or shorter than the period for which ROAS calculations are done. So in those cases, tracking conversions using ROAS can be an inadequate representation.
Moreover, since ROAS is a fraction, it reveals effectiveness but not decisive impact. For instance, a social media campaign that fetches $100 of revenue with a $10 ad spend would have the same ROAS as another paid ad with a $20,000 revenue generated revenue with a $2,000 ad spend. The latter is a heavier addition to the bottom line.
10. Customer Lifetime Value (CLV)
CLV calculates the total dollar value a paying customer can bring in their entire life cycle with a brand, thereby assessing a customer's value from a wider lens. Understanding this helps to focus on more lucrative segments in the long run. It can be calculated using the formula:
CLV = Average Customer Value x Average Customer Lifespan
The components have subjective calculations. Value is usually determined by studying the pricing model, whereas lifespan uses historical data.
Disclaimer: Brand metrics and Performance Marketing Metrics differ
When you track performance marketing metrics, you must clarify what you’re trying to achieve. Performance marketing KPIs can look bad if you’re focused on brand marketing. There are other metrics to look at, though they are harder to measure! We’ll cover that in a different blog post.
Is there any list of ‘best’ metrics to capture digital marketing performance?
Setting things straight, there's no “must-track” checklist of metrics you should be tracking to measure digital marketing performance.
There are many digital marketing platforms. You can run different campaigns on each of them, and their respective performance marketing KPIs shall vary accordingly.
For instance, performance marketing campaigns could run across Pay-per-click (PPC) advertising, Social media marketing, Email marketing, Ad retargeting, etc. Their key metrics vary and can include the number of clicks, likes, brand mentions, leads generated, website visits, the average value of sales, etc. Each of these metrics has its significance.
Thus, a proper way to measure campaign marketing performance is first to define marketing goals and build a holistic digital marketing strategy in sync.
This can always involve the use of multiple channels as a strategy to attain the underlying goal. The next step is determining the relevant KPIs for each of the campaigns.
Not all metrics are equally important for your marketing team
Suppose that your marketing goal is to increase sales leads by x percent, and your strategy involves running lead-generating campaigns across Facebook and Instagram. There are many metrics to measure: Likes, Follows, Brand Mentions, Leads Generated, and so on. However, since your goal is sales, the number of likes qualify as vanity metrics, as they don't impact sales. In such a case, metrics like the number of leads and cost per lead would be more helpful. Likes would be relevant if the goal were to increase brand awareness.
Want to work smarter with digital marketing data?
Let’s face it, as digital marketers, it is essential to demonstrate results from our digital marketing efforts. However, given how complex the digital marketing realm has turned today and the fact that it requires multichannel campaign approaches, this can imply juggling mind boggling volumes of marketing metrics and kpis.
Platform measurement is becoming less and less reliable, and all of the platforms tend to over-attribute conversions to themselves. It makes sense: platforms try to take credit for more conversions, which would mean higher ROAS and lead you to keep spending your marketing budget with them.
Now, if you do siloed reporting, this will definitely become an issue, and at some point you will compare conversions from the platforms to the actual business you generated and you will see a mismatch. That's why it's crucial to look at performance holistically.
Tools like Funnel help you quickly and accurately make sense of the enormous amount of information. Using the sophisticated yet easy-to-use platform, you can import data from the varied platforms you're on in one place. After that, make proper sense of it, leveraging its automation capabilities for complex calculations with peace of mind.