“If you can’t measure it, you can’t manage it”
The success and growth of digital marketing can be explained by a number of factors: its effectiveness compared to traditional marketing, its ability to reach highly targeted audiences, and the benefit of being able to accurately measure ROI from all digital marketing channels. But it’s this last factor which is perhaps the biggest reason why digital marketing spend has grown exponentially in recent years, namely because marketers can measure in minute detail the exact impact of their activity.
All this is made possible by precise metrics that are far more accurate than trying to measure traditional (offline) marketing activities. There are a whole host of different metrics that can be analysed, which span multiple digital channels. However, it first makes sense to define what exactly is meant by the term Digital Marketing Metrics.
Digital marketing metrics are used to measure how successful your marketing strategies are. The metrics you decide to use will depend on your marketing goals, but they should all help you to measure the performance and value of your campaigns on either a low or high level. Many organizations use these metrics to establish KPIs for employees or suppliers, for example, they may set a KPI of a minimum conversion rate of 2% across a specific channel.
Why are Digital Marketing Metrics Important?
Without digital marketing KPIs, it can be difficult to know whether your online activities are actually generating results. And even if you know your efforts are bringing in sales or boosting your web presence, you might not be aware of all the ways your strategy could be improved if you’re not tracking metrics.
Digital marketing metrics help you to stay competitive in an ever-changing space. You’ll be able to keep an eye on strategies that are no longer performing as they should and produce better sales forecasts depending on historic seasonal dips in traffic. KPIs will also help you to set better targets and realistic goals for your team, giving you something to aim for when devising your next big campaign.
If you’re new to tracking digital marketing metrics, or want to widen your focus, this list of the top marketing metrics will help you identify which ones are right for your goals. Remember, your KPIs may change as your business grows, so be flexible and ready to adapt as the market shifts.
The way you measure your conversion rate will depend on the page you’re analysing and the specific goals you have for it. This is because conversion rate is measured by the number of users that complete an action, but that action isn’t always the same. Some actions that you could measure to determine a webpage’s conversion rate include:
· Completed sales
· Newsletter sign-ups
· Clicks on a specific link
· Downloads of gated resources
· Submissions of an on-page form
Think about what it is you want users to do when they land on a particular webpage, and if there’s more than one option, include them all as separate metrics rather than lumping them together. If one action is being performed by a lot more users than another, it could help you to change your focus or give you clues on how to change your webpage. For example, if users on your product page are signing up for your newsletter rather than making a purchase, you may need to optimise their buying journey.
To calculate your conversion rate, you’ll need to take the amount of traffic you get and divide it by the number of those users that actually convert. Typically, the higher your conversion rate the more successful your marketing efforts have been, as this indicates the people finding your website are getting enough value from it to go ahead and perform a desired action.
The amount of traffic your website receives will help you to understand how many users are finding your website and which pages they’re visiting the most. Paying attention to the volume of traffic you’re getting is especially useful if you’re using a strategy like search engine optimisation (SEO) to improve your business’s visibility online. If your strategy is working correctly, you should expect to see an increase in your website traffic in the months after you’ve deployed it.
In general, the more traffic your website gets, the more successful your marketing strategy. However, you need to pay close attention to what that traffic is doing as well, which is where metrics like conversion rate come in. Getting traffic to your website is the first part of the battle, so once you have a good number of regular visitors, you can start thinking more about how to encourage users to take action and convert into paying customers.
However, more traffic isn’t always a good thing. If you’ve noticed your website gets a lot of visitors that very rarely convert, it could be a sign that you’re not targeting the right audience or there’s something on your website stopping them from moving further down the buying cycle.
While looking at the volume of traffic your website receives is key to measuring growth, the channels that this traffic comes from can help you to understand which of your marketing strategies are working the best. If you’re utilising social media marketing, sending out e-mail newsletters and partnering with news outlets as part of a PR push, it can be valuable to know which of these channels is generating the most interest.
If certain channels are driving more traffic than others, you may want to invest more money into the strategies you know are working, while trying to work out why other channels aren’t moving in the direction you’d hoped. In some cases, it could be because the market is very saturated or your target audience doesn’t use those channels, in others it may be to do with how you’ve approached your campaign.
Measuring your click-through rate (CTR) is key if you’re running any kind of adverts online. Adverts can take up a huge part of your marketing budget, especially if you’re operating within a competitive industry, so it’s crucial to make sure your money is well spent. Ideally, you want as many people in your target audience as possible clicking on your adverts, as this will take them to your website and bring them closer to making a purchase.
You can calculate your click-through rate by dividing the number of impressions your advert gets by the number of people who actually click on it. Similarly to traffic, you do want to make sure the users that are clicking on your advert actually go on to complete an action, especially if your adverts are pay-per-click (PPC). Otherwise, a large number of clicks will end up costing you more without any reward.
On the surface, a high bounce rate appears to be a bad thing, as it measures the number of people that leave your website after viewing the page they landed on. Most of the time our goal is to keep visitors on-site so that they can explore more and convert into customers.
However, in some instances, a high bounce rate is to be expected. For example, if your page is an educational blog post that helps your website to build authority, many users are likely to leave once they have the answer to their problem. Similarly, if users land on a contact page with a phone number, they may leave your website but go on to give you a call.
But if your bounce rate is high on a page designed to lead users to other parts of your website through calls to action and internal links, it’s a good idea to investigate what’s going wrong.
New and Returning Visitors
If you’ve been paying close attention to your traffic volumes, the next logical step is to divide those users into new and returning visitors. A high number of new visitors can indicate your business is in a time of growth, or it may be as a result of a recent outreach campaign that spread awareness of a new product or service. Lots of returning visitors indicate that your website is offering value to the users who land on your site. This may be in the form of educational blogs or extensive product offerings, but you’ll be able to see exactly which pages attract returning visitors upon closer examination of your traffic.
If your traffic is made up of mostly new visitors and very few returning users, it could be a sign that you’re either attracting the wrong people to your website in the first place, or that your website isn’t engaging enough for your audience to connect with it.
Costs per Lead
If your digital marketing strategy is generating new leads, that’s always a source of excitement, especially when you can see some of those new leads becoming subscribers or paying customers. However, it’s important to calculate exactly how much it’s costing your business to generate these new leads and whether your investment is actually paying off.
To work out your cost per lead (CPL), you’ll need to take the total amount you’ve spent on your marketing campaign and divide it by the number of leads you’ve generated. Of course, you’ll need to keep in mind all of the other positive benefits your campaign has had when looking at this data. Sometimes your cost per lead may seem high, but if you’ve succeeded in generating traffic or awareness, these may also be valuable results that you can justify spending money on. This is why digital marketing KPIs should always be considered together, as very few of them exist outside of the wider network, meaning same level of interconnectivity is inevitable.
Your customer acquisition cost focuses on a slightly different journey than your costs per lead. Where lead generation is just about finding those interested users who may in time become customers, acquisition looks at the whole customer journey from the moment a user lands on site to when they actually pay for products or services.
The costs per acquisition (CPA) calculation is very similar to the way you work out CPL. You simply divide your marketing spend by the number of users that have converted into paying customers, but remember to be really targeted with the users and costs you include. Try to divide your marketing costs into individual campaigns and analyse which users were caught by these efforts. Follow their journey on your website and identify whether they became paying customers or took a different path.
Return on Investment (ROI)
Your return on investment is arguably the most important digital marketing KPI, as it gives you an idea of whether the money you put into your marketing strategy has paid off. Senior managers and company shareholders will be especially interested in ROI, particularly if they need to decide how much of the yearly budget will be allocated to similar activities in the coming quarter. However, if you’ve only just started a new marketing strategy, a negative ROI or one that’s lower than expected doesn’t necessarily spell disaster. Some digital marketing campaigns take time to reap results, so it can be best to consider ROI after a longer period of time.
To start calculating ROI, divide your total profits by the amount you spent on marketing before multiplying this figure by 100. This will give you a percentage that you can compare with other marketing campaigns as well as historic ROI to help you understand which of your marketing strategies are most worthwhile.
Start Tracking Your Business Performance with Digital Marketing KPIs
Whether you’re part of a marketing team or are growing your own small business, digital marketing KPIs are going to be key in scaling your strategies and making sure you’re reaching your goals.
Regardless of the type of digital marketing you’re currently using, you can find a huge range of tools online, such as Google Analytics, to help you track all of the metrics discussed above. Join thousands of digital marketers on the journey to improving your overall marketing performance and seeing real results while tracking metrics.