Are you in the world of marketing? You’ve definitely heard the term Key Performance Indicators (KPIs). Identifying the correct ones to utilize can be one of the unexpectedly tricky aspects of doing this kind of work. After all, depending on how these numbers pan out can often make a huge difference in how and where marketing resources are focused.
In this article, we’re defining the term KPI and breaking down 10 essential KPIs you should know, as well as how to track them within a campaign.
What is a Digital Marketing KPI?
At its core, a KPI measures performance. It is a quantifiable value that marketers use to evaluate the success of their campaigns and compare performance across channels. These indicators are mostly universally understood across the business world, and used to communicate to external stakeholders the viability and results of specific marketing efforts.
The KPIs chosen by marketers depends on their specified end goal. Are the looking for consumers to make a purchase? Visit a website? Fill out a lead form? Each of these call for a different KPI. The primary category KPIs can be broken down into are:
- Lead Generation
- Website and Traffic Metrics
- SEO Optimization
- Paid Advertising
- Social Media Tracking
Here, we’ve highlighted the top two most widely used across each of these categories. With the note that any individual campaign might call for variations or additional metrics. Overall, it’s important not to lose sight of the “K” in KPI. Overdoing it on the report side can obscure or distract from important findings. The ability to zero in on the most relevant KPIs indicates your understanding of a given campaign and its target audience.
Lead Generation KPIs
Cost Per Lead
What Is it and Why it Matters: The amount of money you spent to acquire one new lead. An important number that varies by sector and channel, you can use to benchmark your progress against the industry average. The bottom line for evaluating the profitability of marketing activities.
How to Measure: The total amount of dollars spent divided by the total number of leads acquired is your Cost Per Lead (CPL).
Lead Conversion Rate
What Is It and Why It Matters: The number of leads or visitors to your site that complete a desired action (or “convert”). This is an important measure of the success of your landing page or “call to action” towards your target audience. Successful lead volume combined with an unsuccessful conversion rate might indicate an issue with your sales strategy rather than the marketing efforts. This is another metric you can use to benchmark against other competitors in the space or industry averages.
How to Measure: The number of leads converted divided by the total number of leads.
Website and Traffic Metric KPIs
Page Click-Through Rate
What Is It and Why It Matters: More than just the total number of visitors, this metric indicates if your content is compelling enough to drive visitors to spend time on your site. The CTR through the landing page and lead capture process also illustrates how successful you are at getting users to complete conversions and can illuminate any pain points in the information gathering stages.
How to Measure: Your CTR is your total number of clicks divided by your total number of impressions. It can be viewed using back-end tools like Google Analytics.
What Is It and Why It Matters: The definition of bounce rate is the percentage of visitors that leave a webpage without taking a desired action, such as clicking on a link, making a purchase, or filling out personal information. A high bounce rate of course means users are not converting, which could indicate problems with site experience, in the page layout, copy or UX. Maintaining a low bounce rate is also important, as it’s used as a factor in Google’s ranking.
How to Measure: Single page sessions divided by all sessions, the percentage of all sessions a user only viewed a single page with no requests. This metric can be viewed using back-end tools such as Google Analytics.
SEO Optimization KPIs
What Is It and Why It Matters: Did you know there is a numerical value assigned to every website that determines how it will rank on search engine results pages (SERP)? The score, developed by Moz, ranges from one to 100 and uses factors such as backlink profile, copy on page and user experience to calculate a number with machine learning. A higher score corresponds to a greater likelihood of appearing at the top of search results, a vital goal for any marketer or SEO specialist.
How to Measure: Use SEO tools such as Moz or SEMRush to view your own and competitor sites’ domain authority.
Keywords Driving Traffic
What Is It and Why It Matters: In other words, what are people searching for when they land on your site. The more high ranking keywords you have, the more traffic you get to your site. Keep in mind, users aren’t likely to click past page one on Google, so it’s critical to rank in the top ten for as many keywords as possible. This metric is a great measure of user intent and can help direct your content strategy.
How to Measure: SEO tools such as Moz and SEMRush easily break this data down over time, so you can view trends and check your progress.
Paid Advertising KPIs
Cost of Customer Acquisition (COCA)
What Is It and Why It Matters: On a per customer basis, how much money are you spending in order to earn a sale? When it comes to communication with stakeholders, it’s key to understand the relationship between marketing costs, revenue and overall profitability. If you’re spending more money to acquire a customer than they spend on your products or services, that results in a net loss for your organization.
How to Measure: The total marketing investment divided by the number of customers acquired. You can calculate this KPI on a month-over-month or week-over-week basis to see how trends change over time.
Lifetime Value of a Customer (LTV)
What Is It and Why It Matters: While this calculation can seem a bit intimidating, it’s possible to determine exactly how much a customer can be worth to your business over a lifetime relationship. Given the lower cost it takes to keep an existing customer rather than acquiring new ones, increasing this value is a great way to drive business growth. Knowing your CLV can be a major help in developing retention strategies and new product or service offerings. This metric is most helpful for companies that enter in multi-year relationships with its consumers, i.e. any type of subscription or long-form contract.
How to Measure: Customer Lifetime Value = Revenue X Gross Margin X Average number of repeat purchases (the last part of the equation can be removed for single purchase scenarios).
Social Media Tracking KPIs
What Is It and Why It Matters: Posting to social platforms can sometimes feel like screaming into a void. It’s difficult to cut through the noise and deliver a message that resonates. Measure your success by monitoring your engagement– shares likes, clicks– and comparing it as a percentage of your total number of followers. A high engagement rate on specific posts is a leading indicator that your audience craves more of that type of content.
How to Measure: Social Media Marketing tools will calculate this metric for you across multiple platforms, like Facebook, Twitter, Instagram and TikTok. Industry leaders include Hubspot and Buzzsumo.
What Is It and Why It Matters: The last thing you would want is for a conversation to be happening online around your band that you are not a part of. It’s actually possible to monitor how people speak about your brand online, positively or negatively, and see how the conversation is evolving month over month. The best type of content will evoke conversation, and staying proactive towards any negative feedback is the best way to mitigate any potential brand harm.
How to Measure: Look for specific mention tracking tools like Sprinklr and Qualtrics, and be sure to adjust your parameters and keywords to provide accurate and useful reports.
How to Track and Report KPIs
The ten KPIs listed here only represent a small fraction of the measurement choices marketers are faced with on a daily basis. Consider the following each time you are tasked with setting up KPIs for a new project
Ask the Important Questions
Before deciding on any tracking metrics, you must understand the relationship between your current project and revenue generation, along with defining reasonable goals based on your businesses capabilities. Keeping the end in mind will lead you to identifying what KPIs are most important to track throughout.
Connect Leading Indicators
No KPI exists in a vacuum. Consider the full sales funnel: each pain point a consumer might encounter could be a KPI. Impressions, clicks, leads, cost per lead, click-through rate, cost per acquisition and overall web traffic are just a few indicators that work in tandem to provide a full picture of the success of your marketing efforts.
Consider the Channel
As you can see based on the above examples, your KPIs should change based on channel. Measuring success for your SEO strategy is totally different from PPC, which is totally different from organic social and so forth. Metrics will change based on what you intend on measuring, as will industry-standards you use as a benchmark.
Find the Right Tools
After selecting your KPIs, you’ll have to choose various analytics platforms that are able to pull the data you need and create useful reporting. Tableau and Microsoft BI are two popular softwares in which you can create intuitive dashboards powered by AI. For some of the metrics we highlighted above such as brand mentions or tracking website traffic, you’ll need tools specially designed for that purpose.
Learn More About Digital Marketing
Selecting and tracking KPIs accounts for just one of many aspects in the life of a digital marketer! Check out additional resources on the subject at codingbootcamps.io!
- Our complete guide to the top digital marketing bootcamp offerings online and in-person
- An overview of careers in digital marketing and adjacent fields, such as graphic design, web development and search engine optimization
- Read about the most popular digital marketing platforms and top digital marketing tools
- Our interview with a digital marketer