If you’re learning about digital marketing, you’ll no doubt have heard of marketing metrics.
You may also have heard the phrase, “What gets measured gets improved”—an aphorism attributed to management expert Peter Drucker. Though its origin is debatable, this nugget of wisdom has withstood the test of time because it’s absolutely true.
By consistently measuring your marketing performance, you’ll be able to a) determine if you’re moving in the right direction and b) pivot to try something else if you’re unhappy with the results.
Buying into this concept is all well and good, but there are hundreds of metrics you could be measuring—how do you know which ones are genuinely useful to your organization? This article will introduce you to the most common (and helpful) marketing metrics that will enable you to optimize your efforts, Peter Drucker-style.
We’ll cover:
- What are marketing metrics?
- What are marketing KPIs?
- Why are marketing metrics and KPIs important?
- An introduction to the marketing funnel
- What are the most common digital marketing metrics?
- What tools are used to measure digital marketing metrics?
- Wrap up and next steps
But first, let’s start with the basics: a definition of a marketing metric.
1. What are marketing metrics?
Marketing metrics are quantifiable measures used to evaluate the performance of marketing campaigns and assets. Some examples (more on this later) of marketing metrics include clicks, impressions, website visits, and email open rate.
Marketing metrics are sometimes considered interchangeable with marketing key performance indicators (KPIs), but this is an incorrect assumption—they are two distinct entities.
Next, we’ll explore marketing KPIs to better understand the difference between the two.
2. What are marketing KPIs?
A marketing KPI (or key performance indicator) is a defined value that aligns to a business objective. The overarching KPI is what moves the business or organization forward in the long-term, and relates to a company’s strategy or mission. Marketing metrics, on the other hand, provide context for why you’re seeing particular results in relation to the KPI. They’re not the be-all and end-all metrics to measure, but they do provide useful insights into your ongoing marketing efforts and how they’re contributing to the greater goal.
For example, a KPI may be the number of sales generated during a particular period. Achieving this KPI has a clear impact for the business: more customers and more revenue. The supporting marketing metrics could be the number of website visits, advertising clicks, impressions, social media shares, etc. They’re not the ultimate number you’ll be looking at, but they all help explain the number of sales reached.
KPIs are essential for a couple of reasons. First, your marketing metrics may be giving you a false impression that your efforts are successful. For example, if your goal is to sell pants and your ads are getting thousands of clicks, it should indicate that people are interested in your product. Yet, if no one is converting, you’re not actually achieving anything.
Second, looking at more superficial marketing metrics alone usually won’t give you the full story of how your marketing efforts support your business goals. (One exception would be when your business derives revenue from marketing metrics like clicks or video views.)
3. Why are marketing metrics and KPIs important?
By this point, you may have gotten a sense of why marketing metrics and KPIs are so important. However, to ensure it’s crystal clear, let’s review the benefits:
- You won’t have any idea if your marketing efforts are worthwhile if you don’t measure and track your campaign results
- By aligning KPIs to key business objectives, you can be sure that you’re prioritizing the right marketing activities to achieve them
- Measuring results will stop you from wasting time, effort, and resources on dead-end initiatives
- Hard numbers that prove success will justify your marketing spend and efforts—you can’t argue with them!
- Tracking marketing metrics alone will not tell you the entire story
It’s clear that tracking marketing metrics and KPIs is essential for success. As soon as you embrace that belief, you’ll be able to take the actions that will help you continue to improve long-term.
Now that you have a foundational understanding of why KPIs and marketing metrics are so vital, let’s move on to how they relate to the marketing funnel.
4. An introduction to the marketing funnel
Businesses employ marketing techniques to sell their products and services—this is obvious. But what may not be so obvious is that there are separate stages through which a buyer must pass during their customer journey. Everyone who has ever purchased an item must go through the marketing funnel, which can take anywhere from a few seconds (think about an impulse purchase at the checkout counter) to years (like when choosing an institution for higher education).
Here’s an example of how someone might go through the funnel:
- Stage 1: Awareness. An individual sees a billboard for a new show on Netflix that piques their curiosity
- Stage 2: Interest. They do a Google search for it, read reviews, and watch a trailer
- Stage 3: Desire. The trailer and reviews convince them that they would probably enjoy this show
- Stage 4: Action. They sign up for Netflix to watch the show
- Stage 5: Loyalty. They enjoyed the first few episodes, so they continue to watch it and pay for an ongoing subscription. Note that customers will most likely never become loyal if they have a bad experience with your brand—unless your customer service is able to repair the damage.
While there are hundreds of marketing metrics, many of them can be mapped to distinct stages of the marketing funnel. Impressions—the number of times people have seen your ad content—are considered Awareness metrics, while average order value (AOV) aligns with the Action stage.
Given that there are so many marketing metrics, digital marketers need to focus on the ones that are most relevant to their KPIs. Fortunately, most KPIs are tied in some way to sales, which means several common marketing metrics will help the majority of marketers assess progress towards their goals.
With the advent of digital marketing has come the introduction of the digital marketing funnel, which has more stages than the original marketing funnel and pertains to online use only.
5. What are the most common digital marketing metrics?
While marketing metrics can vary by channel, KPIs are usually channel-agnostic (because they align to business objectives). You can learn more about the main marketing channels here, but for now, let’s take a look at some of the most frequently used marketing metrics that apply to popular marketing mediums:
Impressions
As we established previously, an impression is a view of an organization’s marketing content. Though marketers most frequently employ this metric to assess display ads’ reach, they can also use it for social media posts, video views, and other content. Logically speaking, any time you expose an individual to your promotional material you can count it as an impression.
Clicks
Marketers primarily use the clicks metric for organic and paid messages on various digital platforms. Google paid search ads and social media posts and ads are prime examples. While clicks are only one indication of an ad’s success, in most cases, content that receives more clicks is probably more effective. However, remember that clicks are only effective if they help achieve your KPIs; a click in and of itself is useless unless it leads to a desired result.
Cost per click (CPC)
When it comes to the cost you pay for a single user to click on an ad, you may think lower is better. But it’s not so clear-cut. Say you have a low CPC on one channel but low conversions—in this case, you may be better off spending more on your CPC on a channel that does better when it comes to generating sales.
Cost per click is only genuinely helpful when you assess it alongside our next critical marketing metric, cost per acquisition.
CPA (cost per acquisition) or CAC (customer acquisition cost)
You can calculate the cost per customer acquisition by dividing the total spent on marketing efforts divided by the sum of your KPIs. For example, if your KPI is 200 leads and you spent $200 to acquire those leads, your CAC would be $1. If you are paying $.50 for a click on one platform, but the CAC is $2, you’re usually better off paying $1 per click on a different platform if the CAC is lower. Caveat: If the acquisition volume is too low to achieve your KPIs on the lower CAC platform, you may need to supplement it with efforts on channels with higher CACs.
Click-through rate (CTR)
A CTR measures the percentage of people who click after being exposed to one of your marketing campaigns—essentially clicks divided by total impressions or views. You can use click-through rate to measure email, digital ad, and SMS (short message service) engagement.
Website traffic
Visits to your website can be a vanity metric if you take it at face value. Many businesses use their website as a vehicle for submitting contact information for future follow-ups or purchasing a product. Simply looking at the total traffic does not tell the whole story.
Where are your website visitors going and what are they doing on your website? If you wrote a blog post that generates substantial traffic but has yet to generate any revenue, it’s not directly supporting your KPIs necessarily. Of course, such content fulfills other purposes such as establishing your authority in a topic area and attracting visitors who may discover your brand through the blog post and convert at a later date. All this to say: it’s important to dig deeper to understand what certain metrics are telling you.
Open rate
This metric applies to any medium for which a user needs to take action to be exposed to your marketing communications. SMS, email, and social media messaging all use open rate as a marketing metric. You can calculate open rate by dividing the number of unique opens by the total messages sent.
Average order value (AOV)
You’ll see AOV a lot if you work in eCommerce. As the name indicates, it measures the average customer purchase total (before shipping and tax.)
Customer lifetime value (CLTV)
While tricky to calculate, CLTV is an incredibly important metric to track. Like customer acquisition cost, this metric goes one level deeper than the more superficial marketing metrics such as clicks, impressions, social shares, etc. Customer lifetime value is how much a business can expect to earn from a customer (on average) for the duration of their relationship with the brand.
Conversion rate (CR)
A “conversion” can mean different things to different companies. For an eCommerce business, a conversion could be a purchase; for a travel agent, it could be a form submission requesting that a salesperson contact them. Regardless of how your company defines a conversion, a conversion rate is the percentage of people exposed to your marketing who complete the desired conversion activity.
Return on ad spend (ROAS)
Calculating ROAS will help you determine your ad spend’s efficiency—it measures how much revenue each ad dollar generates and is usually expressed in a ratio (e.g., $10: $1). It’s similar to return on investment (ROI), except that it only looks at how much you’ve spent on advertising.
Other useful marketing metrics
The following marketing metrics are more granular and often unique to a particular channel:
- Social media: Followers, shares, comments, mentions
- Email: Unsubscribe rate, click-to-open rate
- Video: Views, play rate, replay rate, completion rate
- Website: Bounce rate, number of pages viewed, unique and returning visitors, session duration, time on site, exit rate
- SEO: keyword ranking, backlinks, domain authority
- General: Market share, net promoter score (NPS)
- Paid search: Impression share, quality score
With an overview of some common marketing metrics in mind, let’s take a look at the tools used to track them.
6. What tools are used to measure digital marketing metrics?
There are hundreds of programs—many of them free!—that you can use to measure digital marketing metrics. Keep in mind that you don’t need to track all marketing metrics all the time; before deciding what tools to use, you should identify your metrics and KPIs and use them to guide your choices.
That said, here are some of the most popular tools marketers use:
- Google Analytics: The gold standard of website metrics, this mainstay offers a host of information (e.g., clicks, bounce rate, session duration, exit rate, website search terms, etc.) about how people come to your site and engage with it.
- Hubspot: It’s not just for content marketers! If you use HubSpot as your central marketing platform, you’ll be able to see metrics like email open and click-through rate, initial and return visits to your website, clicks and cost per conversion from paid search, and a lot more.
- Google Adwords: Its native analytics are fairly comprehensive, offering everything from CPC to cost per conversion—it even shows you what other domains are bidding for the same keywords as you and how your rankings and impression share compare to theirs.
- Hootsuite Impact: This tool demonstrates how your social media efforts contribute to your KPIs and enables you to track engagement across multiple platforms.
- Google Search Console: Another Google freebie that allows you to gain insights on your organic keyword rankings, search impressions, and organic click-through rates over time.
7. Wrap up and next steps
It can be overwhelming to think of all the possible marketing metrics you could potentially track. Just remember to think about what metrics genuinely support business decisions to narrow your focus. If social media has been ineffective for your company, ease off on tracking its metrics and drill into those of another medium that has been successful. And above all, ensure that the metrics you track align with your KPIs!
If you’re interested in learning more about marketing metrics or digital marketing in general, try this free digital marketing short course. For further digital marketing guides and insights, check out the following: