How do you really truly determine whether or not your digital marketing efforts are a success? This is a challenge for many businesses so we’re gonna help answer this question right here.
According to eMarketer, digital marketing budgets are expected to grow 13.6% in 2021. But the expectations to track Digital Marketing KPIs is even greater with CEOs, sales and more traditional marketing peers.
Whenever you launch a new product, roll out a new marketing campaign, or experiment with a new sales approach, you want to know as soon as possible whether or not things are working.
In order to do so you generally track certain metrics and numbers that shed a light on the performance of the project. These KPIs (key performance indicators) are quantifiable measurements of the success rate of your digital marketing budget.
Most digital marketers are quite familiar with KPIs and understand why they are so important. But a major struggle that many teams have is knowing which ones actually matter.
According to Track Maven’s report on digital marketing, nearly half of all teams stated that their most difficult challenge was aligning KPIs with their greatest challenge. 42% struggled to define which KPIs to track and 33% found it difficult to analyze the data they were tracking.
When it comes to KPIs, a one-size-fits-all approach is not going to cut it for every single project and campaign. It is pointless to only follow the same set of KPIs and expect the numbers to actually prove the success rate of all marketing efforts. So, it is important for you to narrow down your indicators to only the most important and relevant ones.
Digital Marketing KPIs (or key performance indicators) are measures or metrics that show the success of digital marketing activities.
These metrics typically line up to specific business goals that digital marketing can support. These goals line up to the objetcive of the digital marketing strategy or content marketing goals such as:
The goal of marketing is get and keep customers, as Peter Drucker famously once said. And in today’s digital world, measuring the activities that bring in and help companies keep new customers are more easily available.
Business leaders now expect marketing to measure the success of marketing efforts because digital signals provide all the data available. (Check out below one of my favorite videos of a CEO telling marketers to stop wasting marketing budgets on ads that don’t work.)
Typically, digital marketers measure the effectiveness of their budgets relative to each of the larger marketing strategy objectives (Reach, engage, convert, retain, and possibly HR goals.)
Reach Metrics might include:
Engagement or Brand Metrics can include:
For more info, check out this in-depth guide on demand generation tactics.
Loyalty / Retention Metrics:
Digital Marketing HR metrics:
Remember learning proofs back in high school geometry class? One rather confusing (at the time) rule that you may remember is the fact that all squares are rectangles but not all rectangles are squares. Well, in digital marketing, all KPIs are metrics but not every metric is a KPI. Some metrics are simply more important than others – but it is very dependent on the situation and objectives that your company is setting.
In order to find your specific KPIs you must start with some basic but important questions that will lay the groundwork.
First: How does this project or strategy influence revenue?
It’s all about the money – revenue rates are almost always going to be included in your KPIs. But not everything that you need to track will have a direct or obvious influence on sales. For instance, say that your company is setting up a booth at a business expo and giving away free merch with your brand name and logo. The point here is not to make any sales, but instead to boost brand awareness and hopefully generate some viable leads.
When it comes to measuring event marketing ROI, you will need to think about the metrics related to this ultimate goal – such as the number of items handed out, number of people that spoke to a sales rep, and the number of leads that were created by exchanging contact information.
Second: What are reasonable goals based on the maturity of your market and the capabilities of your business?
This is often where many marketing and sales teams trip up. They either set the bar too high or too low, and they base their end goals on what they think marks success. There is no excuse for shooting in the dark in these cases.
Take a look at your current internal data to see what your results are now, as well as the highest and lowest the numbers have ever been. You should also do some external research on your competitor’s numbers (if possible) as well as generalized studies on the averages of other companies with similar budgets and market shares. This will help you define what a reasonable yet still challenging goal should be.
Setting KPIs is a lot like using a GPS: first off, you need to know where you want to end up. So, let’s start with the end by defining where you want to be and what your actual quantifiable goals are that can be measured.
Obviously, these will change from objective to objective. Sometimes, your main priority will be to increase conversions or generate more leads; other times, it may be more focused on boosting website traffic or improving retention rates. But you need to be incredibly clear and specific with the exact metrics that you want to see improved.
Say for instance that your company is launching a new personalized trigger-based emailing strategy to better nurture leads. Ultimately, the main metric that you will want to see change is the number of leads coming in, right?
But there are other related KPIs that you need to know, too. For example:
See how these KPIs would also be important to track in order to get a full view of the results of this kind of strategy? The KPIs you need to track are the ones that have a link to ultimate goals.
Say that you want to track keyword traffic. Just because a specific keyword is driving in high numbers does not mean that it is necessarily successful. High traffic with low conversions is not optimal; instead, you should be tracking converting traffic, new versus return, organic versus paid, and so on to give you a true 360-degree picture of what’s going on.
Again, KPI tracking is not a one-size-fits-all approach. Your KPIs need to change depending on which channels you are utilizing, such as social media, email marketing, PPC, referral, email, and so on.
Now, there are some KPIs that do pretty much apply to all channels. According to the Track Maven report we referred to earlier, nearly 91% of marketers agreed that engagement metrics were necessary to track to evaluate the success of any strategy. Consumption, audience growth, and sales and leads numbers also topped the list.
You also need to be aware of how various metrics will change, depending on the channel. For influencer campaigns on social media, you may want to measure metrics like views or engagement and interactions (likes, shares, comments). However, with on-site content such as blog posts, KPIs like time spent per post, percentage of content that was consumed, and impact on conversion rates are more relevant.
You’re probably familiar with the SMART goal acronym: specific, measurable, attainable, relevant, and time-based. It is important that every single KPI you choose fits into all of these categories – otherwise they are a waste of time, energy, and resources, and could lead to confusion or inaccuracies.
Once you have these KPI goals set, you should ensure that they fit into the RACE model. RACE stands for Reach, Act, Convert, and Engage. Each of these words represents a phase of the buyer’s journey as well. If your goal is to reach a wider audience, then you are focusing at the top of the funnel i.e., the exploration and discovery phase. So, in addition to meeting the SMART criteria, each KPI should also have a specific place in the RACE framework.
Measuring digital marketing KPIs isn’t always easy, but as we’ve shown, it’s becoming more and more of a modern marketing requirement.
Some of the challenges in measuring digital marketing include people, processes and of course the technology. Just because the data is available, doesn’t mean every organization has the people to analyze them, the process to turn them into insights and action, or the systems to store those insights.
The main challenges in measuring digital marketing KPIs include:
Many large companies have experimented with approaches like multi-touch attribution modeling, marketing mix modeling and predictive analytics to help address these challenges. (Nerd alert: Should I write more about this stuff? Let me know because I find it really interesting!)
Defining KPIs is a very important first step for any marketing, sales, or general business initiative – but it is unfortunately often overlooked. The key here is to understand your business, your audience, and your true goals. The ideal way to go about setting and achieving KPIs is:
Before you set any new goals or implement a new strategy or campaign, really take the time to consider whether or not you know what you should be looking for, and how you define success or failure. This will lay the foundation to success in achieving your objectives.
And if you want to figure out how to set your organizational goals and KPIs, we’re happy to help!
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