Being a digital marketer involves rapid decision-making. With constantly evolving online platforms and channels, you must ensure you’re up to date on market trends and consumer behaviors.
Analyzing your efforts and prioritizing the right data requires focusing on key performance indicators (KPIs)—quantifiable measures for evaluating whether you meet your marketing objectives.
Here’s a breakdown of why identifying KPIs is vital to your digital marketing plan, along with common metrics you can use and how to measure them.
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KPIs are crucial to your digital marketing plan because they reflect your strategy’s effectiveness. By setting clear, quantifiable KPIs, you can evaluate progress toward specific marketing objectives.
Despite their importance, only 23 percent of marketers are confident that they track the right KPIs.
“It isn’t enough to measure the final outcome alone,” says Harvard Business School Professor Sunil Gupta, who teaches the online course Digital Marketing Strategy. “You also need to track intermediate metrics to understand where consumers might be getting stuck—essentially bottlenecks in the marketing funnel.”
The term “marketing funnel” refers to the three customer journey stages:
KPIs are pivotal to evaluating your success at each stage.
During the awareness stage, marketing KPIs—such as website traffic and impressions—help you understand how to attract potential customers.
For the consideration stage, metrics such as time spent on your website, pages viewed per visit, and social media interactions become more relevant and reflect how well you connect with your target audience.
In the decision stage, your main focus should be KPIs like conversion rate and sales revenue. Those reveal how well your marketing strategy drives tangible results, such as sales or leads.
By continuously monitoring and analyzing KPIs, you can make data-driven decisions, optimize your strategy, and achieve more successful outcomes.
Here are seven KPIs for measuring your digital marketing plan’s success.
Impressions are the number of times your ad or organic content is displayed or viewed—regardless of whether it garners clicks. While this KPI doesn’t reflect how many customers engage with your content, it helps boost brand awareness.
It’s often used interchangeably with “reach,” but it’s crucial to understand the difference between the two. Impressions track the number of times users see your content—and include multiple views by the same individuals—while reach only considers the number of users who see your content.
To measure your brand’s impressions, you can use Google Ads or social media platforms’ analytics tools to track and report how frequently your content appears to users. By analyzing impressions data, you can gauge your targeting strategy’s effectiveness in the awareness stage and adjust it accordingly to maximize exposure.
Most customers will likely discover and decide to purchase from your company online. There are over 2.6 billion online buyers worldwide—more than 33 percent of the world’s total population.
To ensure you reach a large online audience, your website needs to appear at the top of search engine results pages (SERPs). Its rankings directly influence your brand’s visibility and accessibility to potential customers in the awareness stage.
Tools like Google Analytics and specialized search engine optimization (SEO) tools provide valuable data when measuring search engine rankings, including:
Monitoring those metrics can help you understand your SEO strategy’s performance and any necessary adjustments, such as improving website loading speed or creating more relevant content for your target audience.
Click-through rate (CTR) is a critical KPI for assessing online advertising campaigns and search engine results. You calculate it by dividing the number of clicks your ad or link receives by its impressions and then multiplying that number by 100 to get a percentage.
To measure and analyze CTR, you can use digital marketing tools like Google Analytics to gain detailed insights into ad, keyword, and content performance. No matter the marketing asset, each CTR can impart how well you communicate with customers.
The average CTR is approximately 6.6 percent for search and 0.6 percent for display, but every company has its own baseline. For example, a high CTR often means your content is relevant and appeals to your target audience.
The best way to determine your goal CTR is by analyzing industry benchmarks, historical data, campaign objectives, and your target audience’s specific patterns and preferred advertising platforms.
Marketing KPIs aren’t just about measuring engagement with potential customers; they can also indicate changes you should make to your digital marketing budget.
For example, cost per click (CPC) is a KPI that considers the amount you pay each time a user clicks on your paid advertisement. You calculate CPC by dividing the total cost of your ad by its number of completed clicks. For instance, if you spend $100 on your ad and it receives 50 clicks, the CPC would be $2.
This KPI helps you assess online advertising efforts’ financial efficiency during consideration. A lower CPC indicates a more cost-effective campaign, allowing for more clicks within your budget.
You can track and measure CPC using tools like Google Ads that provide real-time advertising performance data.
One of the most important consideration-stage marketing KPIs is conversion rate—the percentage of visitors to your website or digital platform who take a desired action, such as making a purchase, signing up for your newsletter, or filling out a contact form.
You calculate it by dividing the number of conversions by the total number of visitors and then multiplying that by 100. For example, if your website receives 1,000 visitors and 50 of them complete a purchase, the conversion rate is five percent.
You can measure conversion rate using digital tools like Google Analytics that track user interactions and behavior—including how and what they convert on.
Understanding conversion rate is essential to assessing your marketing campaigns because it focuses on customers’ actions. A higher conversion rate indicates more successful engagement with your target audience. If your website has a low conversion rate, you might need to find new ways to entice customers to act.
You’ve probably heard the phrase, “It costs more to acquire a new customer than retain an existing one.” While acquiring new business is marketing’s main objective, it comes at a cost that you must measure and monitor.
Customer acquisition cost (CAC) is a marketing KPI that calculates the total expense incurred to acquire a new customer. You calculate it by dividing the sum of all marketing and sales expenses over a specific period by the number of new customers acquired during it.
One example is tracking marketing and sales expenditures through accounting software and analyzing customer acquisition data via customer relationship management systems like HubSpot and Salesforce.
Monitoring CAC helps you make data-driven decisions to optimize marketing efforts and allocate budget to ensure you spend money on the right customers.
For example, if your company aims to attract a new, sustainability-driven target audience, that might prove too expensive if ad copy about business sustainability has a low conversion rate.
Return on investment (ROI) is a KPI that can provide crucial insight into marketing initiatives’ anticipated and actual results.
Check out the video below to learn more about ROI, and subscribe to our YouTube channel for more explainer content!
ROI specifically analyzes the customer journey’s decision stage. While other cost-oriented metrics focus on earlier stages, ROI compiles profit-related information into a single metric that helps communicate overall performance.
You calculate ROI by subtracting your marketing efforts’ cost from their generated revenue. You then divide that number by the cost of your marketing efforts. For example, if your digital marketing campaign costs $1,000 and generates $3,000 in revenue, the ROI would be 200 percent.
Google Analytics and marketing automation software are common tools for tracking campaign revenues and costs. It’s crucial to note that if you don’t monitor KPIs early in the marketing funnel, it can be hard to determine if your efforts contributed to your campaign’s success or failure.
By analyzing marketing initiatives’ ROI, you can identify your most profitable tactics, allocate resources more effectively, and make decisions that maximize your budget.
Measuring your marketing efforts shouldn’t be overwhelming. With the right tools and metrics, you can determine which aspects of your digital marketing strategy work or need revising.
One of the most effective ways to identify metrics for each customer journey stage is by enrolling in an online marketing course, such as Digital Marketing Strategy. Through real-world case studies, you can learn which KPIs are best for monitoring your marketing objectives.
Do you want to learn more about digital marketing KPIs? Explore Digital Marketing Strategy to discover how to measure campaigns’ success. If you’re interested in exploring online education but aren’t sure where to start, download our free guide to online learning success.
