Essential Digital Marketing Metrics to Measure
Originally published: September 12, 2020 11:56:21 AM, updated: October 12, 2020 09:02:57 AM
Digital marketing strategies tend to be holistic; very few, if any, limit themselves to just one front. From the very first step of carving out a budget and optimizing your website, down to SEO and social media efforts, it’s a Daedalian endeavor.
As such, many strategies can often underperform or fail for no immediately discernable reason. That’s arguably in part because many don’t often know which metrics to monitor, or how to act on their findings. Thus, this article seeks to help you pinpoint essential digital marketing metrics to measure. If you strive to make the most out of your digital marketing efforts, read on.
Digital metrics – Key Performance Indicators (KPIs)
To begin with, it is vital to define what digital marketing metrics – or KPIs – are.
Digital marketing metrics are metrics that, when contextualized, can be used to measure the success of a digital marketing campaign. They are specific, quantifiable values that are actionable, unlike what is known as “vanity” metrics. To provide an example of each:
An isolated value of page views would be a “vanity” metric. It looks promising in isolation, but it does not gauge traffic sources or visitor actions. Thus, it does not provide deep insights, and can often incite a theoretical, false sense of success.
Conversely, segmented traffic insights can be actionable KPIs. Traffic that one breaks down by source can inform decisions on digital marketing efforts. For example, low organic traffic may highlight SEO underperformance. Similarly, low referral traffic may require a stronger focus on social media and engagement. Thus, traffic sources are actionable, essential digital marketing metrics to measure, while bare page views are only superficial.
Digital marketing metrics to measure
It is equally vital to note that no two digital marketing campaigns are identical. Depending on your field of business, personal goals, and other factors, some digital marketing metrics may not be as valuable to you. However, all of the following metrics are – to varying degrees – globally useful and actionable, and thus, essential digital marketing metrics to measure.
Broadly speaking, there are 3 main categories of metrics one should keep in mind. Namely:
- Traffic metrics
- Conversion metrics
- Revenue metrics
However, it is important to look for specific insights, as opposed to broad strokes. Highs and lows in traffic, conversions, or revenue are indicators, not conclusions. Therefore, let us analyze each.
#1 Traffic metrics
Traffic to your main website is a great first indicator; websites generate leads, which may then enter your sales funnel. However, traffic sources are an essential digital marketing metric to measure.
Direct traffic: Direct traffic consists of people who directly type your website URL; generally, those who have visited you before. Direct traffic volumes may indicate whether your website offers enough value to attract returning visitors.
Organic traffic: Organic traffic consists of those who find your website through organic (non-paid) search engine results. Most notably, SEO focuses on organic traffic, so underperformance in this front may highlight SEO shortcomings.
Referral traffic: Otherwise known as external traffic, referral traffic gauges those who reach your website through referral links on other sites. Low referral traffic may suggest that you need to work on acquiring more quality backlinks.
Social media traffic: As the name suggests, social media traffic measures how much traffic your social media presence generates. As social media play an increasingly important role in digital marketing efforts, social media traffic is undoubtedly a crucial digital marketing metric.
#2 Conversion metrics
While traffic metrics may interest marketing teams, conversion rates are the next desirable step. Increased traffic from any source can attest to your effective outreach, but the goal of traffic is conversions. Fortunately, Google Analytics and other tools can help measure this essential marketing metric.
Conversion rate: Your total conversion rate gauges how many of your visitors complete desirable actions. This naturally includes completed sales, but depending on your goals it can also include downloads, filled opt-in forms, and other actions. So, you need to pay close attention to your overall conversion rate; it can directly gauge your website’s effectiveness.
Cost per Click (CPC): Similarly, your CPC measures the effectiveness of your pay-per-click (PPC) campaigns. Put simply, your CPC depends on your competitors’ Ad Rank and your Quality Score. Naturally, you cannot influence the former, but you can work towards improving the latter. Your Quality Score depends on the following factors:
- Keyword relevance
- Ad relevance
- Landing page relevance
As such, low return on investment (ROI) on your PPC campaigns may indicate shortcomings in any of these areas.
Cost per Lead (CPL) or Cost per Conversion (CPC/CPCon): Finally, your CPL measures the cost-effectiveness of your lead generation strategies. Depending on your goals and metrics, you may instead define it as CPC/CPCon, but it still helps measure the ROI of your marketing efforts. Fortunately, CRM software and other tools can provide invaluable insights on this front.
#3 Revenue metrics
Lastly, revenue metrics are arguably the most essential digital marketing metrics to measure. Traffic and conversion rates are by all means significant, but your digital marketing efforts ultimately seek to generate revenue.
Customer Retention Rate (CRR): While digital marketing efforts focus on lead generation and conversions, it is vital to remember that existing customers are invaluable. Loyal customers tend to spend more than new ones, and they may even generate referral traffic. Furthermore, it is often five to seven times more expensive to acquire a new customer than to retain one you already have.
Cost per Acquisition (CPA): Measuring your CPC and CPL finally boils down to CPA; this metric gauges how much each customer acquisition costs you. CPA is a substantial, essential digital marketing metric to measure, as it’s the final arbiter of your ROI.
Return on Investment (ROI): Finally, ROI is an amalgam of all your other metrics, and the final measure of your efforts’ cost-effectiveness. It provides an overview of how all the different elements of your campaign perform, and how they affect your bottom line. Thus, regardless of your campaigns’ goals, ROI is arguably the most essential digital marketing metric to measure.
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