The world is changing. Your digital marketing key performance indicators (KPIs) should follow suit.
We’ve entered an era where artificial intelligence (AI) and machine learning (ML) are transforming the marketing landscape. And with Google’s plan to go entirely cookieless by 2H 2024, measurement methodologies like traditional multi-touch attribution (MTA) will eventually lose their efficacy, leading marketers to look into alternative methodologies like incremental lift studies and media mix modeling (MMM).
These changes bring new challenges to digital marketers, who are tasked with identifying key performance indicators (KPIs) to prove marketing effectiveness in 2024 and beyond to clients if they’re a marketing agency or to non-marketing executives if they’re a brand.
Here’s an overview of how you can create smart digital marketing KPIs moving forward that not only align with your or your clients’ overall business goals, but also adapt to the changing digital landscape.
What Are Marketing KPIs?
Marketing KPIs are measurable metrics that indicate the performance of your marketing efforts. They are often divided into categories following a data-driven measurement framework including:
Business Goals
Looking at the broader goal of your campaigns and business outcome you’re trying to achieve, are you focused on awareness and exposure, consideration and intent, or engagement and action?
Channel
You may have specific goals by channel. For example, one team might structure KPIs into the following buckets:
- Display and native
- Convergent TV and streaming video
- Paid search (SEM)
- Audio
- Paid social
- Out-of-home (OOH)/digital out-of-home (DOOH)
- Retail media
- Digital content
- SEO
Leading and Lagging Indicators
In the context of marketing KPIs, the difference between leading and lagging indicators is roughly the difference between inputs and outputs.
When setting goals for your team, think about the specific actions you have to take to achieve a goal. These are your leading indicators. Say you want to increase organic traffic to your website 3% quarter over quarter. A leading indicator in this case might be editorial production — for example, publishing eight authoritative blog posts to your company’s blog. Then, at the end of the quarter, your lagging indicator — monthly organic sessions, for example, a metric for measuring web traffic — will help you determine whether you hit your goal.
Digital Optimization Metrics
You have goals. Now what? Remember, each and every campaign has to ladder up to your team’s larger goals. That’s why you should ensure the optimizations you make in a given campaign yield tangible results.
Your digital optimization metrics should include measurements your team can impact. These can be related to brand exposure (i.e., video views), intent (CTR, completion rate, etc.), or action (engagement rate).
Efficiency and Diagnostic Metrics (Media Costs)
Efficiency and diagnostic metrics level up to total costs — which is especially important for certain channels, such as paid media. Keeping tabs on these ensures your digital spend is efficient. And during quarterly reviews, they can also provide an explanation for why certain goals were — or were not — met.
Examples of these include:
- Cost per click
- Cost per completed view
- Customer acquisition cost
- Cost per visit
Key Attributes of Digital Marketing KPIs
Every individual marketing KPI has a laser-focused objective. For example, viewability is a crucial metric in measuring awareness-driven video campaigns. CAC is an important lower-funnel metric for determining the long-term efficacy of all your sales and marketing campaigns, while CTR is vital for dissecting user intent throughout the funnel.
Let’s dig into the substance of digital marketing KPIs — and why they matter in the grand scheme of your larger digital marketing goals.
Why Measuring KPIs Matters
Setting and measuring KPIs is important to evaluate how your digital marketing efforts are performing. It also helps determine where to allocate resources and what to tweak in your current strategy. You can also prove how your marketing campaigns are impacting larger business goals.
Are Metrics Important for Marketing KPIs?
It depends. A metric is a ratio or number that can be measured and evaluated. It is a crucial component of KPIs as it provides numerical data that quantifies performance.
Metrics only morph into KPIs when you apply and compare the data to your objectives. By this virtue, all KPIs are metrics, but not all metrics are KPIs.
5 Digital Marketing KPIs and Metrics for Your Business to Track
In the cookieless world, marketers must reprioritize their KPIs to more closely align with key business objectives, rather than vanity metrics. Here are some of the most relevant metrics to track.
1. Cost per Lead
Cost per lead is one of those metrics that will always be relevant. Why? Because it tells you how much each lead is costing you. It includes all the digital mediums, from social media to search traffic.
With the new world order, digital marketers may need to look at alternative data sources to measure the cost per lead metric, such as email open rates or opt-in subscriptions.
2. Monthly Website Traffic
Measuring your website traffic will will help you understand:
- How many visitors you get.
- Which product categories they are most interested in.
- What landing pages they engage with the most.
- The impact ads have on traffic.
The information above will help you tailor your offerings to cater to your target audience’s interests more closely.
3. Customer Lifetime Value
Customer lifetime value (CLV) underscores one of the most enduring marketing truths—that it’s easier to keep existing customers coming back for more than it is to acquire new ones.
Single purchases are great, but repeat purchases leading to long-term relationships are gold. CLV takes into account the value of a customer throughout each stage of the customer journey — including what they do after making an initial purchase.
CLV is perhaps the most accepted proxy for customer loyalty, because it shows how that loyalty concretely impacts revenue goals.
4. Lead-to-Customer Conversion Rate
The work of converting leads to customers is a complex alchemy, combining the efforts of marketing, sales, and (often) customer success/enablement teams.
Leads arrive to your business through a broad spectrum of channels — organic, paid, referral, and more. These leads are then nurtured and scored. As they work through the bottom of the funnel, marketing-qualified leads (MQLs) become sales-qualified leads (SQLs).
Lead-to-customer conversion rate measures the aggregate efficiency of the go-to-market functions of your organization. By breaking down the overall success of your organization at turning leads into customers, you can uncover the crucial optimizations to make at the campaign or channel level to more effectively nurture prospects.
5. Customer Acquisition Cost
A foundational marketing metric, Customer acquisition cost (CAC) provides a ballpark figure for the total spend associated with gaining a new customer.
As we mention above, converting leads to customers is a complex operation involving numerous parts of an organization. CAC steps back from the intricacies of the day-to-day to consider the total investment. This includes everything from team member salaries, to advertising spend across all channels, to vendor and overhead costs. CAC considers everything — and is one of the best KPIs to track.
A 5-Point Checklist for Creating Smarter Goals and Digital Marketing KPIs
Here’s a five-point checklist you can use to set smarter goals and KPIs for your digital marketing campaigns.
Ask the Right Questions
What do you want to track and why? Let’s say you want to measure website traffic. Why? So you can get more leads or sell more products? Ask yourself “why” until you get to the root of why you’re setting a particular goal.
Write your goals following the SMART framework: specific, measurable, achievable, relevant and time-bound. Also, let go of the jargon. The simpler your goals read, the easier it will be for you and your team to understand them.
Find Your Target
Every goal needs a target — that numeric value that shows what you hope to achieve and by when. A target shows you what to aim for and whether you’ve hit the mark. It’s what gives KPIs the power to gauge your goal’s performance.
Take this example: You achieved a sales volume of 5,000 widgets by a set date. That seems good, but how can you be sure? You don’t have any reference point. But if you know your target was 3,500 widgets by that set date, you know you significantly surpassed your goal.
Be Careful What You Measure
Before tying KPIs to any goal, ask yourself this: “How do I envision success?” Which metrics align with your particular goal and support what you’re trying to accomplish?
Also, determine if the goals you’re measuring are enough. Stephanie Estes, the chief media officer at Goodway Group, discussed in our webinar how using media metrics such as clicks and impressions are important, they’re actually not telling us anything about how well we’re driving against the business outcome and aren’t enough in and of themselves.
So, when applying this principle to your goals, ask yourself: “Are the metrics I’m measuring giving me a full picture of success?” If not, what other factors should be taken into account?
Keep Tabs on Your Results
Assign a point person or team to analyze your goals and KPI performance regularly, whether daily, weekly, monthly or at another interval. The specific timing you can select is flexible and should depend on what you’re tracking.
The assigned individual can either do this manually with spreadsheets or slides. Or they can set up an automated dashboard for an at-a-glance view of performance.
Be Willing To Change
The digital landscape is changing, and you need to change with it. Goals and KPIs are fluid, so they will change over time.
If something isn’t working and needs shifting, switch up your strategy and experiment. Retiring old KPIs in favor of introducing new ones is natural. Keep only those that serve you best and can best gauge your performance over time.
Marketing KPIs FAQs
Which Digital Marketing KPI Is the Most Important to Measure?
The short answer is revenue or return on investment (ROI). Ultimately, marketing aims to drive sales and generate revenue for the business. If your marketing campaign fails to do that, you’ll have to rethink every other metric.
How Can You Measure Brand Awareness?
Brand awareness seems like a qualitative KPI, but you can quantify it. Some things to measure in this regard are social media followers, new links, referral links, brand searches, brand mentions, etc.
Do the Same Digital Marketing KPIs Apply to All Businesses?
Every business is unique, and so are its goals. No one-size-fits-all approach will work for all businesses. But some standard marketing KPIs like traffic, conversions and ROI can apply to most businesses.
Embrace Smart Digital Marketing KPIs To Stay Afloat in the Digital Age
As we inch toward a more data-driven world, every marketing decision will be based on solid numbers and KPIs.
Ready to go deeper? Check out the following resources touching all things measurement and planning to take your marketing efforts to the next level:
- Learn how to increase marketing revenue with a media mix model.
- Study up on incrementality and learn how to measure your marketing impact.
- Read how brands should allocate their digital marketing budgets.
Spencer Cappelli is a senior content and SEO strategist at Tuff, a Goodway Group company. He has 5+ years of experience in content, editorial and SEO for B2B and B2C audiences spanning SaaS, edtech, digital marketing and more. He lives in New Jersey.