You invest in your marketing efforts every day. You hire people with the right skill sets and experience. You carefully hone plans for various products and services. You pay for the tools to deploy your strategy. You align your day-to-day objectives with your business goals.
But how do you know if the investments you make are actually paying off? This is where key performance indicators (KPIs) enter the picture. These metrics provide insight into what’s working — and what’s not.
What is a digital marketing KPI?
Any marketing team knows that their efforts amount to little to nothing without the data to back them up. KPIs are one critical form of that data. They are metrics that allow you to see how your activities, initiatives, and campaigns are performing.
KPIs are quantifiable, measurable values and are used to track your various endeavors. As we will dive into below, they can be applied to a range of activities and areas of your marketing and business initiatives, such as social media engagement, website visits, email opens, and much more.
“Marketing agencies and teams use KPIs to track performance and measure the success of their various initiatives. They formulate their overarching goals upfront and leverage these statistics to gauge whether they have successfully reached them.
Why do you need to track your KPIs?
KPIs are integral to your digital marketing strategy. In order to meet your marketing goals and, more to the point, know that you have met them, you must have clear metrics and quantitative data that provide insight to that effect.
KPIs allow you to see how well your marketing campaigns are succeeding. Not only will you see whether your efforts are paying off, but you will also have a better idea of where the results are coming from. From there, you can make alterations, repeat initiatives that have proven to be sound, and focus on the marketing channels that are driving the greatest results.
Ultimately, this will enable you to hone your vision and determine what to target and why. Your strategy, therefore, will be more cohesive and better informed.
What KPIs should you be tracking?
1. Search engine optimization (SEO)
SEO is a tricky concept. For one, there is no obvious formula to “solve” the puzzle of optimizing your content to make it rank higher in search engine results. Search engines are constantly evolving, too, and changing their ranking systems. But you can still measure how well your SEO efforts are paying off, using, of course, KPIs.
You can, for instance, measure keyword rankings. The KPI you use will dictate which keywords you’re targeting, and you can evaluate their success over time to determine how you’re positioning them.
Search traffic, too, will allow you to evaluate critical data like the organic traffic to your web pages driven by search engines. Meanwhile, domain authority — the amount of authority and value search engines like Google grant to your website — is another metric that helps determine the “importance” of your content and material.
An additional SEO-related KPI is core web vitals, which allow you to assess the performance of individual pages, effectively measuring the user experience you offer through your content.
2. Social media
Social media is integral to our lives — and to marketing. That’s why social media KPIs have such a prominent presence in any marketing strategy.
Engagement on social media platforms like Instagram, Facebook, Twitter, and LinkedIn is measured with values such as likes, comments, shares, number of follows, growth in follower count, clicks, and views.
When you track this information, you will, again, be able to understand the kind of content that appeals to your audience. Considering how important social media is to your overall marketing plans, this is vital for honing and refining your strategy — and growing your brand and audience.
Social media marketing KPIs, therefore, give you the fuel you need to adjust your plans.
3. Paid search engine marketing (SEM)
Going hand in hand with SEO is paid SEM. Through this strategy, marketers use tools like Google Ads to ensure that searches for content relevant to their brand, services, and products land them at the top of results. You’ll pay for clicks to your website or landing page. But simply shelling out the money won’t necessarily yield results.
There are several different KPIs you can use to track the performance of your SEM campaigns. For example, search engines assign a quality score to your ads; a stronger quality score will lead to higher-ranked results.
Cost-per-click (CPC) is another tool to assess performance. The lower the cost, the better you’re doing. This is true if you’re using a pay-per-click (PPC) strategy.
Finally, click-through rate (CTR) is another KPI that is frequently used to evaluate your SEM results. Of course, you want more clicks per view — this means your ads are speaking to consumers, who are responding to them and engaging with them.
4. Email marketing
Email marketing campaigns yield a wealth of information that will help you hone your marketing efforts. Signups, for instance, can give you insight into external efforts and CTAs. Meanwhile, open rates allow you to assess the quality of your subjects and preview lines, while click-through rates (CTR) enable you to evaluate the content of your emails.
There are also several negative email marketing KPIs to track — that is, metrics you want to be lower. Those include, for example, bounce rates, the number of emails that were undelivered, and unsubscribe rates.
5. Return on investment (ROI)
ROI is a critical metric to consider when evaluating your digital marketing performance. It can be applied to the other KPIs on this list, but it also has the ability to stand alone as a singular metric as well. Essentially, it measures the profit you generate from customer acquisition and the sale of services or goods against the cost of obtaining them.
As a marketing tool, ROI evaluates the profitability of your various endeavors and campaigns, such as ads. It allows you to assess your routine performance — quarterly, monthly, annually, and so on. This will not only guide your future efforts, but will also assist you with budgeting, planning, and many other activities that inform your marketing plans and aid you well into the future.
6. Number of leads
The total number of leads you accrue is one of the greatest resources for evaluating your marketing efforts. This is what will create real profit.
Whether a visitor fills out a form on your website, a professional stops by your booth at a conference, someone enters a contest you’re hosting on Instagram, or a casual peruser sends you a social media message, these seemingly small actions are all creating leads.
Of course, all marketers know that they need to spearhead efforts to generate more qualified leads that they or their sales team can use. By tracking your activities, in terms of both the volume of leads and the quality of them, you will see how the investment is paying off. That’s why lead generation KPIs are so important to your overall marketing strategy.
7. Conversion rate
Leads on their own are not of any real value to you. Instead, you should consider how many of those leads actually become real customers. This is your conversion rate — the proportion of people or businesses that have filled out a form, contacted your business, responded to your efforts, and so on who actually end up purchasing something from you. And it’s an important KPI to measure and track.
On the opposite end of this spectrum is the idea of churn — the rate of consumer loss. This refers to customers who stop using your service or product, and it’s another KPI that should be on your radar. While every business loses customers from time to time, if you notice a pattern in when and where these customers are leaving, you can glean meaningful insights and adjust your strategy.
8. Cost per acquisition
Customer acquisition cost (CAC), as you can probably tell from the name, is a KPI that tracks how much money you’re spending on converting leads. By evaluating this metric, you will be able to see the ROI of your strategies and determine whether your efforts are valuable. You can also find ways of reducing the costs associated with attaining new customers.
Consider, for instance, the tools and technology you’re using to generate and track leads. Also, account for the professionals, including sales staff, who are actively obtaining leads, along with overhead costs. Don’t forget that advertising and marketing efforts cost money, too.
9. Brand awareness
Most marketers aren’t strictly looking to promote products and services through their efforts. They are also aiming to build brand awareness. Recognition is critical for achieving your goals and growing your organization.
How, then, can you formulate and track KPIs related to brand awareness? Because it’s not a tangible entity, this can be a little tricky. But there are still ways to measure it. For example, you can deploy surveys to find out how prospective and current consumers who visit your website, landing pages, social media channels, and more first learned about your business. Referrals, too, are another means of achieving — and measuring — brand awareness.
Brand awareness is also connected with retention. This, of course, is another KPI you should be tracking — consumers you keep and the ones you lose over time.
10. Website traffic
Your website is rich with data and metrics to track. Using tools like Google Analytics, you can, for example, assess inbound traffic, looking at how many visitors came from outside sources to visit your site. CTR through your site, too, is a KPI that marketers so frequently track.
Bounce rate, the number of people who visit your site and immediately click out of it, is another important metric to consider. It’s related to content marketing KPIs, which have bearing on the quality of the content you offer on your website. If you see that your bounce rate is high, you should consider what to change to make your site more appealing.
Another aspect of your marketing plan to consider is the promotions that drive users to your website. How well are they leading customers to your content? Are your landing pages connecting to that content successfully? How can you better streamline these marketing materials and provide a path that makes them respond even better?
What NOT to track
There is a risk of over-tracking your marketing efforts. Digital KPIs will inevitably assist you, but you shouldn’t waste time tracking KPIs that are only disguised as KPIs — that is, they don’t actually measure performance in an optimal way.
Don’t spend time and resources assessing digital marketing KPIs that don’t actually have meaningful value to your organization. Moreover, you shouldn’t invest in tracking KPIs that don’t allow you to take real action. If you can’t change anything that has to do with the KPI, then it’s not something you should be measuring.
When you’re going about determining which KPIs you’re going to track, consider what metrics will generate critical information that will allow you to evaluate your efforts and ultimately improve your bottom line.
Essentially, if a particular KPI doesn’t align with any campaign you’re currently working on, then it has no particular value to your business.
Managing your KPIs effectively
In order to effectively manage your KPIs, it’s important to consider your business goals. This is the first step toward considering which metrics are central to your operations. As a team, select the values that will best serve these objectives.
Remember that your KPIs should be quantifiable. It’s in your best interest to make them SMART (Specific, Measurable, Attainable, Relevant, and Time-Bound), just as you should any goal for your operations.
Your marketing activities, in turn, should always exist to meet these central objectives.
Additionally, use these guidelines:
- Evaluate existing data to understand your baseline.
- Take advantage of templates.
- Track your progress over specific timeframes.
- Generate reports — and read them — to understand how your efforts are paying off.
Remember, too, that honing your digital marketing strategy and KPI metrics is never finished. You should continue to evaluate your goals, objectives, mission, and marketing efforts to ensure that your strategy and marketing metrics continue to apply to your brand.
KPIs are the smarter approach to managing your digital marketing team and your efforts. Using them strategically will not only allow you to assess progress but ensure that you’re working toward common, collective goals.
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