Trust me, you want to know how your digital marketing strategies are performing, and how to measure your success. Yes, it’s not enough to understand your audience, roll out the best ads, or have the most fantastic offer. The truth is, you can better direct your efforts and manage your strategies if you understand what makes your campaigns successful.
While a competitor might be interested in the number of impressions served before recording one purchase, or the click-through rate per acquisition, you may instead want to watch out for your bottom line percentage, cost per acquisition, or the average cost per lead generated as a way of measuring the success of your marketing campaigns.
What is a KPI In Digital Marketing?
Your key performance indicators in digital marketing are measurable values that help you understand the performance of your digital marketing strategies, no matter what channel you employ — whether paid advertising or social media marketing.
Defining the right KPIs for your business helps to increase the chances of your success. By and large, it takes a proper understanding of key performance indicators (the parameters mentioned above) to be able to establish whether you’ve been successful at digital marketing or not.
In this piece, we’ll be examining some essential key performance indicators (KPIs) that you can use to evaluate your digital marketing efforts. But before we dive right in, do keep in mind that the KPIs you eventually choose to measure will ultimately depend on your marketing goals. In essence, if I want to know how much it takes for my ads to convert one customer, it will take measuring different KPIs than when I want to understand how visitors interact with my brand online. That said, you might want to check out our list of the 6 best tools you can use to measure your digital marketing success.
1. Bottom Line Profitability Percentage
No matter what strategies and tactics you choose to use, every effort and resource expended must contribute to your bottom line at the end of the day. Measuring your bottom line percentage requires knowledge of your net income as well as how much you spent trying to reach your target audience.
While there are tools to help you work this out, it basically takes dividing your net income by the net revenue and then multiplying the value by 100 to arrive at your bottom line profitability percentage.
When you put out an ad or post on any social or digital marketing channel, the impressions served represent the number of times your ad or post has been seen by a person online. This is quite easy to measure, and it is a valuable metric if your digital campaigns are targeted at growing your brand awareness. Impressions can be more valuable than you might even realize.
Measuring this KPI might not help you grow your ROI, but it is worth checking if you notice a drop in your website traffic or click-through rate.
3. Cost Per Click (CPC)
CPC specifically finds applications in paid advertising. It is what you pay any time a visitor clicks on your ad. Measuring the amount of money you pay for every click on an ad is an excellent way to understand the effectiveness of that marketing campaign: one, it indicates how many people clicked on the ad, and secondly, CPC metric can be used to inform budget and bid amounts, which in turn allows you to maximize the number of clicks based on your ad budget.
4. Return on Ad Spend
Your return on ad spend indicates the revenue you receive per dollar spent on your digital marketing campaign. Many digital marketing agencies and businesses focus on this KPI as the ultimate metric for measuring the effectiveness of any digital marketing effort. And that’s understandable because you can’t go on spending and not making profits. If that is the case, then there is something wrong with your marketing strategy. If you realize you are not hitting the mark in terms of returns, then it is time you reviewed your strategy, or better still, engage a professional agency.
5. Social Media Engagement
This KPI is one of the most important when measuring marketing effectiveness, especially on social media. You want to know how well and how much your audience engages with your posts on social media; their comments, reactions, and shares. This actually helps businesses understand whether they are serving the right content to their followers and where they need to make adjustments.
Facebook, Twitter, Instagram, and Pinterest all have in-built tools that indicate audience engagement, but you can also use other tools like Hootsuite to track social media engagement.
6. Bounce Rate
This KPI tells you how many customers come to your website and bounce off straight away without even trying to navigate to other pages on your website. What could be repelling them? How many visitors per 100 visits (for instance) leave without engaging with your site? If this number continues to grow, you need to check your landing page, user interface, possibly review your offer, etc. To calculate your bounce rate, divide the number of total visitors to your website by the number of those that visit just one page, and then multiply it by 100.
7. Email Signup Rate
Bearing in mind the importance of building and growing your email subscriber list, you might want to pay close attention to this metric. How many people who visit your site actually sign up for your emails? Since most people sign up to get a free resource, how many of them are willing to stay after that? In fact, some click on the link but may not proceed to sign up. Measuring your email sign-up rate allows you to up the effectiveness of your email marketing.
8. Conversion Rate
Conversion rate measures the number of users who visited your website and ended up making a purchase or signing up for a service. For starters, this KPI tells you how compelling your CTA is, and by extension, the effectiveness of your sales team. But most importantly, it is a KPI to focus on when you need to understand how your marketing spends translates to customer acquisition. To measure your conversion rate, divide the number of users converted by the total number of those who visited your website for a particular period.
9. Cost per Acquisition
As you gain new customers, the cost per acquisition KPI indicates how much you spend per new customer. Are you making a profit? To measure this, divide the total amount you spent acquiring new customers through a particular channel by the number of new customers acquired. The value you get is how much it costs you to acquire each new customer.
10. Average Cost per Lead
Besides the cost per acquisition, the average cost per lead KPI indicates how much each lead is costing you. If you're having issues converting your leads, then it's an indication that something could be wrong with your sales strategy rather than your marketing strategy. Dividing the amount of money you spent on a particular campaign by the number of leads generated gives you your average cost per lead.
About the Mission HR
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