Online marketing is all about expanding your influence and positioning your brand in new and creative ways. Measuring your key performance indicators (KPIs) is central to the success of any online campaign. You need to ensure that you are getting the highest return on your investments (ROI) possible. Yet, knowing which KPIs are important to monitor is a challenge. Even after you've deployed a marketing dashboard, you might find yourself drowning in the rising tide of available metrics.
That's where this month's installment of KPI examples comes in. Let's delve into online marketing KPIs and sort through the metrics to find out the top ten. If you are finding yourself overwhelmed and discouraged, then this article is your lifeline to save you from drowning in the myriad of metrics you could be monitoring. Without further ado, here's our top ten online marketing KPIs.
Online Marketing Metrics – The top 10
Return on Investment (ROI). This KPI will be at the top of any top 10 marketing KPI list simply because it is the ultimate measure of success for your campaign. ROI drills down to the heart of your campaign and provides a financial measure of your performance. You'll notice throughout this list that we keep coming back to this KPI. That's because this KPI is a crucial consideration for every metric and KPI you monitor. The challenge with this metric is that brand positioning cannot always be measured by an increase in sales. Potential customers "liking" your Facebook status doesn't necessarily translate into revenue. But it contributes to your brand going "viral" and that increases your visibility over the long term. This is a tricky metric that goes beyond the traditional measures (revenue, sales leads) and taps into the heart of online marketing. This KPI is a must on any marketing dashboard! Benefit: Know your keyword rankings and keep them ranked high! Audience: Media/Ad, Managers, Executives Calculation: (Attributable Revenue - Campaign Investment) /
(Campaign Investment) = ROI (over X time period) Example: ($1.0 M Revenue - $0.5 M Invest) / ( $0.5 M Invest)
= $0.5 M ROI over past 90 days.
SEO Keyword Ranking. This KPI measures how successful your Search Engine Optimization (SEO) campaigns are at generating increased website traffic. This KPI is among the most important indicators of your organization's web presence. Keeping track of your keywords is a lot of work, but worth every ounce of effort. Staying connected to your keywords – those that drive both volume and conversions – is an absolute must and keeping them visible on your dashboard is about staying competitive. Benefit: Know if your money is well spent on a specific campaign and make adjustments as needed. Audience: Brand, Copy, Research, Managers Calculation: (Keyword, Search Engine Ranking #, ranking
change + /- , keyword search volume, keyword goal-conversion-rate) Example:Klipfolio, Google #1, +1, 9,000 monthly searches,
5.3% GCR
Click-Through Rate / Engagement Score. This KPI measures how effective your online initiatives are at getting the response you were aiming for. For instance, placing an ad on a third-party website that asks your audience to download a trial version of your software. Clicking the ad to visit your website is 1 point; downloading the trial version is 2 points. Your objective with this KPI is to measure the success of your campaign (see ROI above). Setting up this metric takes some thought, as you need to find a way to rank the value of your "click-throughs." Benefit: Know how successful a campaign is based on how far your audience follows the trail you've laid. Audience: Product/Brand, Copy, Research, Media/Ad, Communications,
Managers Calculation: (Point ranking system: 0 points for no action, 1 point for clicking on link, 2 for achieved desired action (downloading trial, etc). Then, (Total Points / Total Site Traffic = Click Through Rate) Example: 100 points / 1000 visits = 10% click-through rate (10% of engaged audience completed objective)
Average Site Time. This KPI measures how long visitors to your website stick around and explore. It is a strong indicator of your organization's website's ability to attract and keep the interest of potential customers. In theory, with powerful tools like Google Analytics integrated into your dashboard, this type of metric becomes relatively simple and straightforward to monitor. In practice, you need to figure out what stats actually mean something and what activities actually translate into increased revenue. Remember to be cognizant that an overly long visit might mean your site's message is too complicated. As with any online marketing KPI, value quality over quantity. Benefit: Know how many people visit your site, what they are looking at, and how long they stay. Audience: Product/Brand, Copy, Research, Managers Calculation: (# of visitors / total time on site of all visitors) = Average Site Time Example: 100 visitors / 500 minutes logged by all visitors
= 5 min avg site time per use
Leads per marketing activity. This KPI measures the total number of leads you generate for each marketing activity you engage in. The point of this KPI is to mould it to your litany of marketing activities in order to determine ROI for each campaign. Like most of the marketing KPIs in this list, this is a tricky metric to nail down, because when you get below the surface, the question emerges, "how do you measure which activity generated tangible leads?" In times past, you could take out an ad in a magazine, set up a 1-800 number for that ad, then start counting the leads as they came in. Even with cookies and referrer data, it's difficult to justify time spent on Facebook or Twitter, when your leads may bounce from one of your social sites to another until they land on your web page as a willing customer? Simply put, it is a difficult proposition, because many marketers know deep down that their efforts on social media sites are paying dividends. Pointing to a league of followers on Twitter doesn't really say much though, so I'd suggest that you point to your retweets and the number of people actively talking about you. These things don't always add up to immediate leads, but they serve to build your brand. Whew, thought this would be a straightforward KPI, didn't you? Benefit: Know if your money is well spent and producing real results. Audience: Event, Communications, Media/Ad, Managers, Executives Calculation: Leads generated per activity Example: 100 leads followed link from a Facebook post
Online Interactions. This KPI measures how many online interactions your marketing campaigns have actively encouraged. My reservation about including this KPI is due to the fact that it is incredibly difficult to show ROI or lead generation in some online marketing campaigns. However, this metric speaks to the inescapable truth that social media strategies figure prominently in online marketing and brand positioning campaigns. Without a presence on social media sites like Twitter or Facebook, organizations are keenly aware that they are at a disadvantage. But what are the tangible advantages of a strong social media presence? Having a million followers on Twitter doesn't necessarily translate into genuine leads. The key is determining what types of interactions actually add value and ignoring fluffy stats that are inflated by people following you because, well, just because. You definitely need to sit down and consider which type of social media interactions actually translate into value-added for your brand. Benefit: Know what interactions matter and spend your time encouraging those interactions, rather than the myriad meaningless interactions that permeate the social web. Audience: Communications, Media/Ad, Managers Calculation: (Valuable interactions (retweeting on Twitter, sharing on Facebook) / Total posts by your company) = Online interaction value Example: (20 valuable interactions / 100 posts) = 20% interaction value
Cost per lead generated. This KPI measures the dollar cost for each lead your marketing department has generated. This is one of those timeless metrics that is an integral part of any marketing strategy, on or offline. Actually, unlike most of the KPIs this month, this metric is straightforward. Take your total leads and divide that by your marketing budget and you've got your metric. The last element you need to consider is what the optimal cost/lead relationship is for your organization. You'll likely want to wander over to your Sales department to take a look at their KPIs and see what their lead-to-sales and average sales per transaction metrics can tell you. Benefit: Know if your marketing team is spending budget appropriations in an effective manner. Audience: Media/Ad, Sales, Managers, Executives Calculation: (Total Leads / Marketing Budget) = cost per lead Example: 1000 leads / $100,000 = $100 / lead
Funnel Visualization. Not strictly a KPI, this metric is a very effective way of understanding and measuring how visitors move through your marketing campaigns and become customers. A marketing funnel will list actual values alongside conversion rates from one step to another. So a metric may show how many leads were captured after potential consumers watched an introductory video on your product. This metric will also highlight the less granular conversion ratios such as visitor to lead, or lead to win. Funnel visualization is all about knowing the specifics for your marketing campaigns, good or bad. Benefit: Know where you can improve your marketing process and where leads are dropping off. Audience: Research, Sales, Brand/Product, Managers, Executives Calculation: For each step in the funnel, show actual value, and conversion rate to prior step (current step / prior step = conversion ratio %) Example: 200,000 leads / 10,000 lead captures = 20% conversion ratio
End Action Rate. This KPI measures the ability of your marketing campaign to produce a desired result (download, purchase, subscribe). Closely related to the click-through rate KPI, this metric will provide a solid indicator on outcomes viz-a-viz campaign goals. This is a relatively simple metric in that you have already set up a specific path for potential customers to follow and can see if they followed it to its desired end action. If they follow it, success; if they didn't follow it, failure. This is the perfect opportunity for you to leverage your web analytics tools to see where they fell off the path. Benefit: Know if your campaigns are hitting the mark. Audience:Product/Brand, Copy, Research, Media/Ad, Communications,
Managers Calculation: # of users that start activity / # of users that complete activity = End Action Rate Example: (100 users start on path) / (25 users complete activity) = 25% EAR
Incremental Sales. This KPI measures the ability of your marketing department to contribute to revenue and business growth. If your department isn't already monitoring this data, then you'd better start soon. Marketing departments need to constantly prove their value and justify the money and resources they use. Certainly, those inside the department understand and appreciate how much a solid campaign can do to bolster sales, brand position, and overall business health. But proving that to executives who only see an inflated social media bill can be a challenge. That's where this KPI comes in. It is your proof positive that, yes, your department's initiatives are adding value and contributing to an increase revenue. Benefit: Know your department's value added and justify your budget. Audience:Media/Ad, Managers, Executives Calculation: (Revenue generated by marketing initiatives - Marketing
Budget) / (Marketing Budget) = % Incremental Sales Example: ($10.0M - $750,000) / ($750,000) = 12.3% Incremental
Sales
A measure of subjectivity
The overriding concern for your online marketing campaigns is knowing how
effective your campaigns are at generating real leads and sales. After reading
this article, you probably agree with us that it isn't just a matter of compiling
some metrics and performing a bit of math. It really boils down to finding
an objective way of measuring your subjective marketing data to determine what
really has value. Is it total website traffic, or is it optimizing the lead
funnel? How about the difficult to measure metrics, like your social
media presence?
I'll end this article by saying that this month's KPI examples provide a lesson every department in your organization can learn from. No matter what KPI you are planning on designing, that KPI needs to align with your organizational and strategic goals in a meaningful way. I think online marketing campaigns have their work cut out for them more than other departments. And that's a good thing! Thinking long and hard about how your KPIs impact, reflect, and reinforce organizational goals is what KPI dashboarding is all about.
