Understanding Digital Marketing KPIs & Improving Marketing Strategy

According to Think with Google report, 89% of marketers use various KPIs to measure their digital marketing efforts performance.

Although there are numerous key performance indicators (KPIs) that you can track, we have gathered a list of the most popular metrics that must be included in your KPIs tracking list.

Digital marketing KPIs — the fundamentals

In short, KPIs are metrics used by teams to measure and track the performance of their digital marketing campaigns. Each marketing team uses several different tools and strategies to achieve their quarterly or yearly goals.

KPIs can be different for every channel, for example, PPC advertising, Social Media or SEO.

According to PHD, marketing professionals spend 88% of their time on manual data reporting tasks. And marketers are searching for solutions that will help them cut time on data aggregation, reporting and analyzing, while at the same time allowing to view a bigger picture of performance and marketing metrics. Some of the professionals are using Google Analytics as their KPIs tracking go-to tool. However, for a beginner data scientist, it might be rather overwhelming and hard to understand. Luckily, there's a simpler solution to turn numbers into insights. Whatagraph offers a three-course meal for professionals:

• Overview tool allows tracking different agency clients' KPIs in one unified dashboard. Marketers can add different clients' accounts to the dashboard and easily identify critical performance errors at a glance.
• Reporting tool is used to create easy-to-understand performance reports featuring all the marketing channels and the most important key performance metrics. The reports can easily be shared with your clients and team by email. The reports can also be automated and sent on selected frequency straight to the client's email inbox.
• Dashboard / Monitoring tool allows tracking & analyzing digital marketing performance in real-time. Professionals can build visual dashboards, keep track of their campaign's performance, and gain quick insights into what is working and what calls for improvement.

Visually-powered tools help both the marketers and clients to understand the digital marketing KPI performance easier, including ROI (return on investment), CLV (customer lifetime value) and CAC (customer acquisition cost).

More seriously, KPIs allow digital gurus to quantify the value they are providing to their clients. Some of the digital marketing KPIs are called vanity metrics. In other words, they don't mean much if the digital marketing professional is not diving deeper into the data.

However, some of the metrics can say a lot about the performance, let alone. For example, cost per acquisition or customer lifetime value.

Setting up digital marketing KPIs

In general, key performance indicators should be clear and easy to understand for everyone in the process. Many digital marketing professionals use SMART formula to build their KPIs list:

• Specific
• Measurable
• Achievable
• Relevant
• Time-Bound

Main digital marketing KPIs you need to track

Every business sets different goals. Ultimately, digital marketing KPIs can also differ according to the business plan. However, some KPIs are used across the board in almost every business:

Return on investment from digital marketing (ROI)

Arguably the most important digital marketing KPI — this metric can tell you whether or not "all this digital stuff is even worth it".

Digital marketers value ROI as it affects the company's bottom line. That's why measuring this digital marketing metric is important. Identifying the best-performing channels will allow you to scale your business successfully.

By tracking return on investment, marketers can justify their spending, more effectively distribute marketing budget and measure campaigns success by establishing baselines.

Cost per lead by source (CPL)

The second KPI under the limelight is the price per lead by source (CPL). The number of leads you get doesn't necessarily indicate a successful digital campaign. This would be a vanity metric. Healthy margins and low acquisition costs are important pieces of seeing meaningful growth. Knowing your cost per lead by source, you can adjust your digital marketing strategy to focus on more profitable work areas.

Here is the forecast for 2022 of the industries' CPL acquired through all marketing channels:

Revenue per lead by source

RPL (revenue per lead) can help you forecast the future's digital marketing campaign performance. On top of that, it can help you understand your revenue based on your marketing efforts per source. This digital KPI will clarify which of your leads are profitable and where they come from. This way, your efforts can be focused on those channels specifically.

By tracking RPL as one of your main KPIs, you will be able to shift your digital marketing focus towards the best-performing channels and create a strategy based on the campaigns that attracted highest revenue.

Website conversion rate

Think of your website as a non-stop salesperson. A salesperson never takes a break and never goes on vacation.

Amazing, right?

With all of the new leads this "super-sales" person is generating, a sales team can start monitoring funnel from their side and converting those leads into paying customers. If the business's website has a low conversion rate, you should consider diving deeper into the visitor's metrics — bounce rate, average sessions time, specific landing pages.

If you see that the PPC campaign is landing visitors into the website, but on a specific landing page, visitor bounces, you should call for improvements — run an A/B test with different visuals, copy, CTAs (call to actions) and you will find a way to improve your conversion rate.

Marketing qualified leads (MQLs)

This KPI is sometimes brushed aside, but it's an essential metric in your digital marketing KPIs list. As a digital marketing agency, the percentage of qualified leads can differ between keeping or losing a client.

A strong performance in this metric will prove to the customer that your marketing campaign is performing well and you are driving profit to your customer's business.

Average Social Media engagement

Rather than leads, Social Media is great for raising brand awareness. Digital marketing professionals should not get stuck on how much revenue Social Media channels have brought.

One of the main Social Media KPI could be average engagement rate. This digital marketing metric combines all the engagement a post receives — likes, comments, saves, shares, etc. — by the total number of followers on a specific social channel. Average engagement rate shows how engaging your content piece was to your followers.

As this Social Media marketing KPI grows, you are getting more credibility amongst your followers and potential customers. In other words — you are drawing more attention to your brand.

Customer lifetime value (CLV)

Customer lifetime value (CLV) is one of the key metrics to track as part of the whole customer journey. CLV is a measurement of how valuable a customer is to your company. By keeping track of this digital marketing KPI, you will be able to:

• Forecast a customer’s lifecycle
• Estimate future products/services purchased to forecast future revenues
• Estimate the costs associated with producing and delivering future products
• Calculate the current value of those revenue amounts
• Identify how to distribute digital marketing budget more effectively across all the channels.

With the right digital marketing KPIs in place, your marketing team will be on their way to a more solid strategy. However, there is a caveat to this. Staying current with all data and analytics across different digital marketing channels is incredibly time-consuming and difficult without a reliable tool in place.

With Whatagraph, you don't have to stress out. If you want to track your digital KPIs and improve your strategy, you can get started with our pre-built marketing reporting. Whatagrapg pulls the data from your connected digital marketing platforms, including PPC, SEO, Social Media and others.

The sales team and marketing team can set similar KPIs that will help to identify the channels that drive the most qualified leads.

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KPI analysis for improving marketing strategy

It is advised to run your campaign's performance analysis on a weekly or monthly basis. Keeping track of digital marketing KPIs will arm you with the data you need to scale your business faster, also allowing you to pivot when a marketing campaign isn’t working.

Ultimately, analyzing the performance of specific KPIs will allow digital marketing professionals to justify their marketing spending and acquire more paying customers at the lowest cost.

Bottom line

Whether you are setting KPIs for your Google Ads or social media campaign, it's important not to focus on every single metric you can obtain from every single marketing channel.

Identify what business objectives you are trying to reach with your marketing funnel and set measurable KPIs accordingly.