Ian Brodie
Among the multitude of digital marketing efforts across different channels you can do, we often question ourselves: What works best? What activities are harmful, and what should we do to improve to bring better results? The short answer is that you should start measuring your key performance indicators — digital marketing KPIs.
What is the KPI in Digital Marketing?
KPI in digital marketing stands for Key Performance Indicator. It is a measurable value that shows the success of marketing activities.
Peter Drucker once said, ‘If you can’t measure it, you can’t improve it,’ and we couldn’t agree more.
So the real questions are: What are the most important digital marketing metrics and KPIs? Where do you start? How do you plan your next moves?
That’s why we’ve prepared a list of the best KPIs for digital marketing that your business will need to survive in the next couple of years. Thus, without further ado, let’s dive right into the details.
Internet Marketing Metrics
There are many types of digital marketing metrics based on different incoming data. Except for commonly used KPI relative indexes and formulas, we can measure marketing activities using absolute values or even abstract logical deductions.
Customer Happiness
For example, customer happiness is a metric that doesn’t have a numerical expression. Nevertheless, you can measure it by tracking customer reviews on marketplaces and feedback. These customer overviews need to be counted to create a common picture of customer satisfaction and count the percentage of positive reviews.
Conversion Rate
This digital marketing KPI shows the percentage of converted interactions. That means you must take the total number of tracked interactions and compare it with the total conversions during the same period. To do it, use the formula:
What is the good number of conversions? The value between 2 percent and 5 percent is considered to be a good result of digital marketing efforts.
Website Traffic Sources
One of the business goals of your website is lead generation, so you need to understand what channels people use to find your website.
Google Analytics is a marketing tool that is used for this purpose. With its help, you’ll collect traffic data divided by traffic sources and put it in a document to provide an in-depth overview. Consequently, you’ll examine your weak points, change your digital marketing performance, and plan your ads and marketing costs.
Website traffic refers to digital marketing key performance indicators, which include several types of Website Traffic Sources such as:
- Organic traffic;
- Direct traffic;
- Referral traffic;
- Paid search;
- Social media;
- Email Marketing.
Digital Marketing KPIs Examples for Outlays
Cost Per Acquisition (CPA)
Since you need customers to generate more sales and, consequently, revenue, you need to know how much you spend to gain a new prospect. The idea behind this formula typically includes the amount of money paid to the staff, expenses on marketing material, software required, and fees for other services involved.
You can calculate the cost per acquisition separately for inbound and outbound marketing channels. You can also figure it out in general or for specific activities you need to do for each campaign you organize.
Knowing all these little expenses and activities will help you estimate the effectiveness of your marketing. Proper calculations will let you distribute the budgets for different marketing channels based on the received numbers.
Customer Lifetime Value (CV)
Customer lifetime value is an important and helpful KPI for digital marketing that lets you determine how much revenue you will receive from a customer over the course of their relationship with your business. Using a simple formula (down below), you can compare the cost per acquisition versus the amount of value to extrapolate.
If the difference is slight or the price of gaining a new prospect is too high, it indicates that you should pay more attention to retaining existing customers and keeping them happy.
Inbound Marketing ROI (IM ROI)
Return on investment, or simply ROI, is perhaps the most well-known and crucial marketing KPIs a company can track. The core reason you need to measure it is that it either proves or disproves that the results/revenue received are worth the money spent on marketing campaigns.
The formula is also quite simple:
And that’s it. You now have enough information to start budgeting effectively. These metrics are indispensable for future planning because they help differentiate functional activities from bad ones.
How to Choose the Right KPIs to Track Customer Engagement?
Website Traffic to Lead Ratio (WTLR)
The WTLR indicator is particularly important to businesses that use their website as an effective customer acquisition tool. Just tracking the number of unique visitors is not enough. Your website’s growing popularity can easily fool you, as that doesn’t mean you’ll be getting positive financial changes.
Instead, you need to monitor how the targeted audience performs by examining the number of converted leads per visit. Suppose the ratio is 2-4%. That means your content strategy is working to attract the right customers.
If you see plenty of people on your website but no conversions, we suggest you check your analytics system.
Analyzing your website traffic will ensure you are making the most of your marketing dollars. The best way to do this is to segment your traffic by source—organic, direct, referral, social media, etc. This will help you determine which channel brings the most visitors and conversions.
Landing Page Conversion Rate (LPCR)
You make so much effort to drive a potential customer down the funnel, but they end up leaving your site right on your landing page. It’s a puzzle. What went wrong? Was the message poorly communicated? Was it the site’s performance that affected the sale? Or maybe it was something else entirely?
Well, your landing page conversion rate might know the answer. Head over to your analytics page, and if you see a conversion rate below 10%, you know your page is not performing as it should.
Many factors might affect the page’s performance. Sometimes, it’s a slight alteration in the design; sometimes, it’s the CTA wording. We suggest using A/B testing to determine precisely what the problem is.
Once you find a working combo, don’t stop. It should be a continuous process since there is no such thing as perfection.
Email Marketing Performance (EMP)
Suppose you’re working on email marketing as one of the means to convert leads into customers. How do you measure whether it is successful or not? Well, there are several markers for each email campaign you can keep an eye on. Chief among them are as follows:
- Open rate;
- Click-through rate;
- Conversion rate.
By comparing and analyzing these metrics, you can identify possible drawbacks in your email campaigns and work on a plan to improve them.
What drawbacks? Let’s say your Open rate is reasonable, but the Click-through rate is low. The message is open, but the prospect didn’t hit the CTA button. This means that your message has an enticing enough headline and a not-so-good inside text, let alone a CTA message. You don’t need to fix the headline, only the content.
Work smarter, not harder.
Social Media Engagement (SME) – Another Marketing KPI
Does your boss consider your SMM efforts a total waste of time and marketing spend? Well, it is time to prove him wrong and demonstrate the value you bring by introducing him to the following list of data your work helps generate:
- Show how much traffic is coming from social networks;
- How your traffic relates to other traffic sources;
- Show how many visits from social media are converting into leads;
- Which social media channel is the most profitable in terms of conversions?
Even if your boss doesn’t ask you for this information, knowing the numbers can still help.
You see, KPIs for digital marketing can help you single out social media channels with the most significant potential in your niche. This will allow you to maximize the channel’s effectiveness as you will no longer spend hours on end using ineffective media.
Mobile Traffic Conversions (MTC)
We don’t have to tell you how more people are starting to use their phones to access the Internet. You probably already know the figure is cosmic. However, what you should know is how you can use MTC data to your advantage.
Each industry has its device preference when it comes to visitors. Some use phones to access your site. Others might be using PCs. Knowing what kind of traffic you are getting will allow you to adapt your content to their needs. So, make sure you track the following:
- Percentage of traffic from mobile devices;
- Bounce rates from mobiles;
- Conversion rates from mobiles;
- Compare mobile to PC traffic figures.
These numbers will be an excellent ground to decide whether it is cost-effective to invest in making your website mobile-optimized. Or should you focus more on the desktop experience? And if you are getting a 50% to 50% split, tackle both to not lose on prospects.
How to Track Your Digital Marketing Key Performance Indicators?
Before dealing with digital marketing key metrics, you need to collect relevant data. Therefore, digital marketing managers should use appropriate documents and reports to get marketing budget information.
As mentioned before, marketing tools can also be helpful. Nowadays, every marketer uses Google Analytics and email campaign tools where you can gather relevant statistics.
You may also use Semrush, Moz, BuzzSumo, or other platforms for digital marketing manager users so that the data can be taken from here as well.
Besides, check your positions on the marketplace and read your clients’ reviews on a regular basis. Also, contact your unhappy customers to learn the reasons for their dissatisfaction and ways you can improve your product and service.
By the way, try to talk with those who are rejected; their words also matter. These checks will provide valuable insights, and it’s always nice to have an extra lookout on deck.
The Most Important Digital Marketing KPIs to Estimate Your Team
Sales Team Response Time (STRT)
If you take a look at how long it takes for a sales team to respond in a B2C scenario, we get an average of 5 minutes. However, when it comes to B2B leads, the time the sales team needs to form a reasonable response is not even in the realm of minutes. We are talking hours, if not days, for a reply.
So much so that a Harvard Business Review study points at a 42-hour mark, which is forever in B2C. Worse yet, lead quality usually drops over time, resulting in wasted commerce time.
This is why you need to pay close attention to this KPI in digital marketing. See how fast your competition responds and compare it to how fast your team works. See whether it is a staff problem or a tech one. Having answers to these questions will point you in the right direction.
You might find another method to make any of your internet marketing metrics more accurate. The more relevant data you get, the faster you’ll be able to count the effect of your digital marketing strategies.
MQL to SQL Ratio
This particular Internet marketing metric will allow you to learn how your marketing and sales strategies cooperate. If neither team is in the know, you’ll expect a low figure, which is a problem as it leaves the customer in a difficult spot, or rather, confusing even.
Why? Each team should play the same song using different instruments, not the same instruments but different songs. One must power the other.
See whether your marketing team generates a ton of qualified leads and whether your sales team can handle them all. There’s usually a disconnect between the two groups. Your job is to make them work in tandem.
KPIs for Digital Marketing – Final Thoughts
Knowing where to look for problems in your marketing campaign means learning how to improve them. No business can survive or appear, for that matter, without a well-developed advertising plan. These digital marketing KPIs will help you keep your efforts in line with your goals.
Learn about online marketing KPIs and stay ahead of the competition with data-driven insights.