The only way to know how your digital marketing efforts are performing — and if you’re on target to hit your marketing goals — is to track your progress through key performance indicators. Key performance indicators (KPIs) are metrics that quantifiably measure the success of business activities and are used by sales, marketing, human resources, accounting and other divisions.
When you define and track digital marketing KPIs, you can:
- Drive data-driving decision-making: Digital marketing KPIs clarify gut instincts to inform actions.
- Shift tactics: When you measure marketing activities, you can keep doing those that deliver and improve or replace those that underperform.
- Amplify marketing spend: When KPIs show campaigns or channels aren’t driving results, you can shift money to those that do.
Digital Marketing KPIs to Monitor
There are many digital marketing KPIs you could monitor. While every business will monitor a different set of digital marketing KPIs, the following are KPIs every business should.
Website Traffic
As your digital storefront, your company website is a trove of data that can give the marketing team great insight into your site’s reach. Google Analytics is one of the most popular, free website analytics tools. You can track the following KPIs, among others:
Site visitors: This is the number of visits to your site over a defined period. This digital marketing KPI helps you understand the reach of your site. The metrics are a more accurate representation of customer and prospect visits if you exclude the IP addresses of employees and web service providers. It will count the same person multiple times if they visit multiple times over the defined period.
Unique visitors: New people or people who haven’t visited your site within a given period are tracked as unique visitors. When your site has a high number of unique visitors, it means your site is reaching new people.
Time on site: The time a user is active on your site is measured as a session. It begins when they arrive on your site and ends after 30 minutes of inactivity. Another engagement metric is pages per session; it shows the average number of pages users interact with per session. When you review the average session duration metric, you can see the average length of time per session. Tracking the time on site shows how users engage with your site and what content they find useful.
Bounce rate: Marketing teams must also keep an eye on their website’s bounce rate — when someone lands on your site and leaves the site from that same page. A high bounce rate might mean users aren’t getting what they want from your website and they weren’t engaged enough to stay.
Conversion Rates
Conversion rates for your digital marketing initiatives are the percentage of people who completed the action you wanted them to. For instance, they came to your website because of a Google ad or social media post, and they signed up for your newsletter or completed a form to get a demo of your product. Conversion rates are calculated by dividing the number of conversions by the total number of visitors and then multiplying that by 100. When you understand conversion rates, you can assess the success of your marketing campaigns. The goal is to have a high conversion rate.
Click-Through Rates
Another digital marketing KPI you want to track is the click-through rate (CTR). Calculate a CTR by dividing the number of clicks a link or ad receives by the number of impressions (the number of times a piece of content was displayed to users) and then multiply that number by 100 to get the percentage. Use CTRs to assess advertising campaigns and content performance. If you have a high CTR, it likely means your audience finds your content relevant. CTRs vary by industry, but generally, you should expect a CTR between 2-5% depending on other campaign parameters.
Return on Investment (ROI)
The KPI the C-Suite is usually most interested in is the return on investment (ROI). To calculate the ROI of a marketing activity, subtract the cost of the marketing activity from the revenue generated because of it, to determine the profit. The goal is to have a positive return.
Leads, Sign-Ups and Sales
Ultimately, digital marketing activities should keep the marketing funnel full and move prospects through it so they convert. A lead is a business or person who could become your customer or has expressed interest in something you offer, such as signing up for a webinar.
More leads can result in more sales. It’s a best practice to track which marketing channels and campaigns bring in leads and sales so you can continue investing in those.
Measure Your Marketing Success with Digital Marketing KPIs
It can become overwhelming when you start tracking digital marketing KPIs. However, if you start small with the ones we listed here and remain consistent over time, digital marketing KPIs can highlight marketing activities that work and which ones you need to re-think.
Want to learn more about analytics and how your business should be measuring KPIs, we’re here to help. Schedule a consultation with an expert from Campfire Digital today.
