If you do not track your digital marketing efforts, then how will you know whether they are working the way you intended or not? This is where Key Performance Indicators or KPIs come into play. Digital marketing KPIs help you track your marketing efforts. Also, help you to channel them the correct way if they don’t perform well.
Digital Marketing KPIs help you measure the metrics that matter the most so that you can scale up your business.
But first, let us understand what actually Digital Marketing KPIs are? Furthermore, why it is crucial to track these KPIs in your marketing campaign?
What is a Digital Marketing KPI?
A Key Performance Indicator or KPI is a quantifiable measure or metric used by organizations to gauge many aspects of your business. Different departments have different KPIs to measure their success. From operations and sales to employee performance, evaluation is easy with these KPIs.
Similarly, digital marketing KPIs are those metrics that are used to measure the results of any specific strategy. We have classified the Digital Marketing KPIs into the following major groups:
1. Sales growth KPIs,
2. Brand awareness KPIs,
3. Search engine optimization (SEO) KPIs,
4. Lead generation KPIs.
These KPIs can be further classified into sub-classes. For instance, New account signups, Get a quote requests for Lead Generation, and Keyword Ranking in SEO KPIs. We have discussed the five most important KPIs that you can use to scale your business.
Why there’s a Need to Track KPIs?
Simply said, to attain your marketing goals by clearly understanding the performance of digital marketing efforts.
You need to track your digital marketing metrics to have a better idea of what is working and what is not. If your digital marketing plan is generating a profit, but you don’t know where exactly it is coming from and what strategy is causing you loss. This is where you need to place KPIs so that you can apportion your marketing budget accordingly.
For instance, your SEO strategies might be bringing all the traffic and leads while throwing away money on other digital marketing platforms like PPC ads, which are not profitable.
These days, nearly everything is possible to track. So that you can identify where exactly your customers are coming from. e.g., SEO, CPA, CPL, or email marketing. This way, you can spend your budget on the most profitable marketing channels.
Most Critical KPIs to Track
While the set of KPIs for your digital marketing team depends on the nature of the business and precisely the channels that you are targeting in your digital marketing campaigns.
We have discussed the top five KPIs that almost every organization should keep track of, that have a presence digitally:
1. Digital Engagement
We are all aware of the fact that social media holds substantial power to engage customers. So you need to make sure that the content that you are producing is relevant, worthwhile, and valuable. Understanding the type of content that is bringing the audience is essential. For instance, why spend more resources to develop another Instagram photo while the reel that you posted last week is still trending?
One of the biggest challenges that brands come across is the ever-changing digital marketing trends. So it is really important to understand your target audience and what type of content drives the most visibility, action, and engagement.
It is one of the essential digital marketing KPIs because it allows your brand to have the reach that you desire by putting forth efforts into what drives the most engagement.
2. Click-Through Rate (CTR)
Click-Through Rate or CTR is the KPI that is most used by digital marketers to evaluate the performance of a specific campaign. It is calculated by dividing the number of clicks that your ad receives a click by the number of times it is shown.
Along with understanding how many people see your message, this metric also helps to see how many people are taking action and expanding their digital experience with your brand.
This metric provides you with healthy insights to understand how your content is performing and evoking actions from current and potential customers. Generally, a CTR over 1% is good. Optimal CTR is also dependent on other factors like audience, quality content, and call to action.
3. Conversion Rate
Conversion Rate is a KPI that gives insights into the final stage of your funnel, i.e., the action or the completion. This KPI can be applied to any industry and any marketing strategy. If you have provided a top-notch experience to your customer, the probability of meeting this KPI is high. It is about getting the user performs the desired action.
The conversion rate is the number of people who performed an action divided by the number of people who performed the previous step. For example, if you are into an email-acquisition campaign and out of the 500 people that clicked the button to sign up, 50 of them provided their email. It means your conversion rate is 10%. This KPI shows the overall picture by showing how your marketing efforts are performing.
4. Keyword Ranking
Keywords are still one of the most important factors for Search Engine Optimization (SEO) success. That is why they include in the list of essential digital marketing KPIs too. Search engines are designed to advocate groups of relevant content and keywords to help represent a digital context.
It is another vital KPI because this is how you are initially seen by the people searching for the product or service you are offering. It deals with determining if your web page is in the position that you want. The goal is to rank your page in SERP by optimizing the web page by keywords, page content, heading tags, etc.
Also, read this article: A 10-Step SEO Audit Checklist that Guarantees Your Ranking (2022)
5. Customer Acquisition Cost (CAC)
Among the most important digital marketing KPIs, this KPI identifies the total amount incurred to turn a visitor into a customer. This metric is generally used during a paid advertising analysis. Simply said, it is calculated by dividing the total marketing expenditures by the total number of customers acquired.
This metric is broadly used in eCommerce, B2B, and retail websites. This is often the most crucial stat in deciding how effective a campaign is at bringing back revenue-generating customer acquisition. Determining CAC in your digital marketing campaigns helps you identify the scale of your advertising efforts compared to the customers you’re acquiring.
Measuring your digital marketing performance by means of KPIs is essential for the success of any digital marketing campaign. An excellent digital marketing expert keeps an eagle eye on the KPIs related to his domain and channel.
In this article above, we discussed the concept of KPI, its importance, and the most critical KPIs that every marketer should consider in their campaign.
If you find any difficulty during the process of digital marketing or in measuring KPIs for your campaign, contact us! Our team of digital marketing experts has many years of experience.