The Most Important Digital Marketing KPIs that Spark Organizational Changes
Over the last two decades, organizations have used digital marketing tools in effecting changes and achieving goals. However, most businesses engage in so many marketing efforts that they forget or don't see the need to track and measure how each one is faring. That is where digital marketing Key Performance Indicators (KPIs) come in handy.
If you want to find out more about the KPIs to target to improve your company's digital marketing output, then reading this guide is an excellent first step.
What are Digital Marketing KPIs?
A KPI is a measurable value that organizations use to determine their performance levels. KPIs relate to every part of an organization or business like sales, employee performances, human resources, and advertisements.
Digital Marketing KPIs are those measures and metrics that organizations and businesses use to determine the performance of the strategies and campaigns it employs in digital marketing. These indicators need to be paid special attention to if your business is to have a competitive advantage over the others in digital marketing.
Deciding the Digital Marketing KPIs to track
There's no hard and fast rule to determining which digital marketing KPIs to track. However, the SMART and SMARTER guidelines will ensure that you do not fall off the tracks. Keeping in mind that the ideal KPI for one business may not necessarily be the same for another, the KPIs to track should be:
Specific: It has to be crystal clear what the KPI measures. For example, tracking the number of new customers gained is a generic KPI. Instead, a digital marketing business that wants to increase profits should track a more specific KPI like the number of visitors to a site per month.
Measurable: Another key characteristic of digital marketing KPI s is that they must be measurable. This means the business should know when the target has been reached or not by examining the KPI. For example, it is difficult for any business to track the excitement of customers to a digital marketing campaign. So, such KPIs should not be monitored.
Achievable: The objective that a KPI points to must be realizable else it is useless to track the KPI.
Relevant: Digital marketing KPI s must also be relevant to the business that is monitoring it. So, KPIs should not be tracked because other prestigious companies and organizations are monitoring them. Target objectives that will advance your business.
Time-bound: A good KPI should have a timeframe or deadline to be achieved in. For example, tracking the customer churn rate without a timeframe isn't useful to a business that reviews the performance of is it digital marketing strategies every quarter.
To take things a step further, a KPI can be SMARTER:
Explainable: KPIs must be easy to grasp by stakeholders to prevent the issues that miscommunication brings.
Relative: KPIs should be relative to the goals of the business so that they can be applied when needed.
The Most Important Digital Marketing KPIs
There are several digital marketing KPIs . So, we have grouped them into the following categories:
- General Digital Marketing KPIs
- Search Engine Optimization KPIs
- Social Media KPIs
- Twitter Analytics KPIs
- YouTube Analytics KPIs
- Content Marketing KPIs
- Email Marketing KPIs
General Digital Marketing KPIs
1. Customer Acquisition Cost
As the name implies, customer acquisition cost refers to the amount a business spends on getting a new customer. Usually, this KPI is calculated by adding up the cost of the business' marketing strategies and its sales and then dividing the result by how many new customers it gets within the period.
Depending on how detailed you want your customer acquisition cost to be, it could also include fixed or variable costs.
2. Customer Lifetime Value (CLV)
Another general KPI that businesses use often is CLV. CLV refers to the net profit that a company generates from one customer over the time they are customers. To calculate customer lifetime value, you'll have to multiply the revenue that a customer has brought in per period by the length of their lifetime as customers and the gross margin.
Customer Lifetime Value can be calculated as frequently as required.
3. Return on Investment
A rather popular digital marketing KPI that almost every business uses to ensure it is reaching its targets is Return on Investment (ROI). The indicator measures the gains that a digital marketing strategy or campaign makes from the input of time, money, effort, and energy. In relation to the two KPIs that we have earlier discussed, the return on investment is the profit made when comparing net revenue and a business's acquisition cost.
ROI is usually calculated in percentages. For example, if a company's total cost of employing a digital marketing strategy for a month is $20,000, and its sales growth in the month is $30,000, then the calculation for the ROI is:
Return on Investment = [($30,000 - $20,000)/ $20,000,] x 100
ROI = 50%
4. Conversion Rate
The final indicator on the list of general digital marketing KPI s is the conversion rate. Conversion rate indicates the number of visitors to a site that perform a given task. As a general digital marketing KPI, conversion rate can be applied to various fields.
Search Engine Optimization KPIs
1. Keyword Rankings
This KPI tells you the position of a site for keywords within results on a search engine. Since they play a major role in determining the site's traffic, you may monitor the rankings regularly to see if your SEO efforts are working or not.
Lots of tools to keep track of your keyword rankings are available if you intend to use this KPI.
Backlinks are vital in SEO, and this KPI informs you of other sites that have links to your pages. From such insight, you would know which pages to pay more attention too and the ones to maintain as they are. To improve your backlink quality, you may have to write original and competitive content or leverage on recent happenings in your industry.
3. Bounce rate
In digital marketing, to bounce is to enter a site and immediately leave it.
Therefore, the bounce rate is the number of users that bounce instead of spending more time on your site and exploring other pages.
Tracking the bounce rates of pages on a site helps in identifying how landing pages are doing and whether they need to be more engaging.
Again, this KPI is represented in percentages as:
Bounce rate = (number of visitors that visit one page and leave/ total visitors) x 100
4. Average Session Duration
Session duration refers to how long visitors stay on a site, and the quality of its content is the most significant factor that affects the outcome of this KPI. The total session duration is not frequently used because it usually doesn't highlight the period where a factor led users to spend a shorter time on the website.
5. Page Load Time
Users care a great deal about how long it takes for a site to open. So, if you want to attract lots of visitors to your site, tracking the page load time may be the right place to start.
The Page Load Time KPI is closely related to the bounce rate; if a page takes too long to open, chances are that visitors will bounce.
6. Domain and Page Authority
This KPI is a measure of how important a search engine thinks a website is. Page authority is a slightly different measurement of the importance of the contents on a page.
Social Media KPIs
1. Number of comments, shares, and likes
Many social media users are on social platforms for the exposure. And the number of likes, shares and comments is an easy way to know whether the targets are being reached or not.
Since people gravitate to popular pictures, videos or write-ups, having more likes makes the algorithm of the social media platform push such content to a top spot in search results. Shares and comments, on the other hand, are recommendations that can bring other users of the platform to view the content.
2. Follower growth rate
The follower growth rate over a period is a KPI that's used to know which social media strategy or content appeals the most to users. After measuring the number of new followers gained, the indicator is then compared to its target.
Follower growth rate = [(total followers at the end of a period – total followers at the start of a period)/total followers at the start of a period] x 100
3. Social media traffic
Social media traffic touches factors like the number of visits, page views in a session, traffic sources and many other factors.
4. Active followers
Closely related to the shares, comments, and likes KPI, active followers refer to users who have logged into a social media platform and engaged with your content over a period. If your business is looking to make a profit from social media or direct users to the websites, then the number of this group of people may be the most important KPI to track.
5. Resolved issues
Apart from its use as a site where people can interact with one another, a lot of users bring their displeasures and complaints to social media platforms. If they are not resolved on time, such negative reviews could bring down a business. Therefore, the number of issues resolved is a KPI that might be worth tracking in businesses.
Twitter Analytics KPI
1. Top tweet and follower
A useful Twitter analytics KPI is the number of tweets and followers from an account. From these insights, organizations can either reshare their top tweets, reach out to the top follower (a follower with the highest follower count) or change strategies.
2. Brand and URL Mentions
The tweets and follower count aren't the only twitter analytics KPI to track. You may also want to keep an eye on mentions of your brands, and URLs.
3. Follower Growth and Impressions
Having more people on your network is an advantage everyone wants to have. So, the follower growth on an account may be a KPI worth tracking.
Impressions refer to the number of people that view your tweet or media content per period. It is a tricky KPI to track, but a good indicator of whether a twitter strategy is working or not.
4. Hashtag Performance
In twitter today, it's virtually impossible to advertise or market without using hashtags, and A/B testing is a common way to identify the best-performing ones.
By learning about the tags customers relate with, businesses can tailor their tweets to include them, so that they can get maximum exposure.
YouTube Analytics KPI
1. Average viewing time
This refers to the average minutes spent watching a video on YouTube. Average viewing time is an important YouTube analytics KPI because the algorithm of the video-streaming site ranks those videos that users complete higher than others. So, one way of improving a video's ranking on the site is to encourage users to increase their viewing time.
2. Viewer retention rate
This KPI measures the length of a video that is watched before a user leaves. Again, this is a KPI that YouTube uses in ranking videos. For example, if someone watches only 2 minutes of a 10 minutes video, then the viewer retention rate is 20%. Such video may not occupy the top spots of search results.
Viewer retention helps businesses know which content to put at each point of a video to reduce the number of people that leave it early.
3. Card Click-through-rate
Cards are the pop-ups that suggest actions viewers should take, like subscribing to the channel or following a link to a website while they are watching a video. Data on a YouTubers card click-through-rate give insights on the actions viewers will rather take, that is, to continue watching the video or follow the pop-up.
Therefore, with the information from the viewer retention KPI, YouTube marketers can decide the perfect point on the video to suggest such actions or whether or not to include it at all.
4. Subscriber growth
On YouTube, subscribers are loyal followers that most likely view all of your content because the video-streaming site sends notifications to them frequently. From reports, YouTube marketers can determine how many new subscribers their channels have gotten within a period. So, the KPI equips users with the data they need to channel their videos to attract a type of audience.
5. Keyword rankings
Like in SEO, queries and keywords guide users to videos on YouTube, and how they are used plays a role in determining the first content that pops up in search results.
Content Marketing KPIs
1. Time on Page
The time a visitor spends on a page is one of the most important figures to track in content marketing. Slightly different from the number of site visitors, the time on page KPI points to contents that are engaging to users.
Time on page KPI is closely related to the bounce rate.
2. Unique Visits
For most businesses that employ content marketing strategies, the goal is to increase the traffic to websites. One way of getting this done is to monitor the number of unique visits to a page periodically. Such data will give you insights on what you need to change or keep.
3. Comments, Likes, Shares and Interactions
Tracking these KPIs reveals to business the contents that readers enjoy on a page. Posts, articles and blogs that spark conversations should be worked on and replicated if the business's goal is to increase traffic to the site.
4. Pages per visit
Another KPI that is important to content marketers is the pages viewers open per visit. If someone opens several pages on a website, it shows that they are intrigued about the content, and they are more likely to return back to the website than others.
5. Bounce rate
Bounce rate in content marketing is an indicator of whether readers lose interest after reading content or not. For example, a 40% bounce rate for a blog with content on diseases and virus implies that the marketer has to find ways to keep users on the site for a longer time.
6. Keyword Ranking
Content marketing and SEO go hand-in-hand. The keywords you target within your content plays a vital role in determining whether or not it'll rank high in search engine result pages (SERPs).
Email Marketing KPIs
1. Signup Rate
This refers to the fraction of visitors that sign up to an email list. The rate is usually represented in percentages, and a high value indicates that most viewers want to read more. Signup rate applies to case studies, white papers, or newsletters.
2. Click-through Rate
The email marketing team of businesses sometimes include links to products, or websites on each email. A way to know whether this strategy is worth any time and effort is by monitoring the Click-through rate.
This KPI is the opposite of the Signup rate.
Emails are usually delivered with the option of removing oneself from the list. By monitoring this KPI, businesses can know the most-effective emails to send, and the ones that'll make a lot of people to unsubscribe.
4. Open Rate
Open rate refers to the number of readers that open the emails after they've been delivered. Although this KPI is a bit tricky to track, it offers insights that'll help in deciding how often, on what days to send emails, and to which type of audience.
5. Spam reports
Finally, businesses may also monitor spam complaints. When tracked with the number of subscribers, and both KPIs are dropping, the business may have to change something quickly.
Which Digital Marketing KPIs are not useful?
To many people, having many KPIs implies that they should track every digital marketing KPI they can find. However, only important indicators should be monitored.
Here are situations when KPIs are useless to a business:
1. The KPI has no goal it points to
The whole essence of having a KPI is for them to help in directing businesses to meet targets. So, KPIs must be directly linked to goals that are relevant to the business.
If a KPI can't be linked to any objective, then it is useless to track it. For example, you can track the customer acquisition cost of almost every digital marketing company. However, tracking this KPI for a company that has achieved its customer following target for the limited-service it provides is not useful to the business.
2. The KPI has numerous definitions
The hallmark of a good KPI is that it should be easy to understand. However, there are some cases where a KPI can have different definitions, that it becomes difficult to track.
For example, let's assume a company that provides business intelligence solutions refers to the rate of customers return as the bounce rate. It'll be confusing to track this new KPI definition as well as the actual bounce rate (number of customers that leave after visiting the landing page).
How to develop the correct digital marketing KPI for a business
If your intentions are to take your business to the next level with digital marketing KPI s, here are some steps you should consider following:
1. Have a goal
Goals give a clear picture of what needs to be done, and having one is fundamental to the process of choosing the correct digital marketing KPI . Using supporting data at this stage helps in determining if the goal is realizable or not.
2. Answer the questions that relate to the goal
Next, look for answers to the questions that are connected to the goal. For example, let's assume a company's goal is to increase the number of customers by 10% every quarter. Questions like 'which platform to target?' should be answered. From the answers to these questions, the business can then draw out the strategy to achieve the goal.
3. Figure out the right KPI
The last step is to pick the correct KPI that'll direct the business to achieve its goal.
KPIs are the navigation system that directs businesses to achieve goals and objectives. In digital marketing, there are lots of KPIs that may prove useful to a business.
In this comprehensive guide, we have included the most important digital marketing KPI s to track, and the qualities to look out for in an indicator. Therefore, this article may be all you need to propel your business to where you want to be.