Marketing KPIs

Marketing KPIs Definition

Companies employ marketing to capture, engage, and retain the target audience. They develop marketing campaigns to deliver the message, assist in the customer purchase journey, and communicate the created value to their customers. The outcome of these campaigns determines how well the companies executed the marketing strategies. Here, the pertinent question is: can they track the performance of these marketing campaigns? The answer is a resounding "yes." Marketing KPIs give companies the option to keep track of marketing performance.

During the planning stage of a marketing campaign, companies set the objectives and allocate the marketing budget. During this phase, they also pinpoint areas where they want to direct the marketing efforts. These areas could be return on investment or market share, for example. Setting key performance indicators helps companies effectively gauge the campaigns' performance at the end.

The performance measurement of marketing campaigns allows companies to rectify the issues and improve the marketing campaigns overall.

Examples of KPIs for Marketing

Companies may focus on single or multiple marketing KPIs to measure and improve their marketing campaigns. Here are two examples of KPIs for marketing.

Return on Investment (ROI)

In marketing, the return on investment means the amount of money received compared to the marketing costs. This performance indicator shows the success or failure of a marketing campaign in terms of investment. When the gain is less than the cost incurred, it means that the campaign's return on investment is low. Companies use this marketing KPI to evaluate results and possibly improve the results in the future.

Conversion rate

This online marketing KPI measures the percentage of visitors who complete the desired action, i.e., purchasing a product or subscribing to a service. Conversion rate is an important marketing KPI because it shows how successful a business is at attracting leads. For instance, the social media account of a brand shows more engagement but fewer conversions, which means it can drive traffic but cannot get visitors to complete the desired action.

Marketing KPIs to Measure

Marketers use KPIs depending on which aspect of the marketing campaign they want to focus on. These marketing KPIs help them keep the campaign on track and improve it if possible. Here are some of the usual marketing KPIs.

• Cost per lead – This marketing KPI is required when advertisers pay for every new lead generated. It measures the cost-effectiveness of a marketing campaign. A lead is generated when a customer interacts with the brand.

• Cost per acquisition – The overall cost of closing a sale is calculated through this marketing KPI. It could include every stage related to the sales funnel. Each cost is calculated from research until the end of a sale to determine the total cost per acquisition. It is a good marketing KPI to determine the budget for future customer acquisitions.

  Take a look at our explanation of the Marketing Funnel to learn more about customer acquisition.

• Customer retention – This marketing KPI measures the ability of a business to retain its customers. In business, it is more expensive to attract new customers than it is to retain existing ones. Therefore, companies prefer keeping existing customers if possible. It also helps businesses improve their services if they lack customer support.

• Sales revenue – This KPI is used to measure the progress of a business to generate sales revenue. Marketers analyze data and trends to set a sales revenue target.

• Organic traffic – Marketers use this marketing KPI specifically in online marketing. One of the critical tools of online marketing is SEO (search engine optimization). Marketers use this KPI to track the organic traffic on a website.

  Want to learn more about organic traffic? Check out our explanation of SEO Marketing.

• Response time – This marketing KPI is used to measure the sales team's response time. This team works in tandem with the marketing team to provide value to the customers. When the response time is less, it is satisfying for customers.

Fig. 1 - Response time - A key marketing KPI

Influencer Marketing KPIs

Influencer marketing is a common theme these days. Brands pay influencers for promotions. We can use many marketing KPIs to measure influencer campaign performance.

• Referral traffic – The traffic directed to a page from external sources. This KPI shows the level of success and reach of a campaign. It also tells us how many people visited the page.

• Brand reach – With influencer marketing, brands can reach audiences on a wide scale. It certainly increases the brand reach. Through this KPI, a business can determine the reach of a campaign.

• Audience growth – This KPI in influencer marketing is used to measure audience growth. Marketers check to see the audience growth through social media analytics.

• Engagement – When visitors interact with a website or social media page, it is called engagement. In influencer marketing, this KPI is used to gauge the effectiveness of a campaign. Engagement could be in the form of likes, comments, clicks, or the overall engagement rate.

Types of Digital Marketing KPIs

Digital marketing KPIs are used to gauge the performance of digital marketing campaigns. They help businesses track their performance and attain their marketing objectives. They help marketers identify the areas where it works and the areas where they can improve. Here are the common types of digital marketing KPIs.

Search Engine Optimization – Search engine optimization (SEO) is a standard digital marketing KPI. It helps a business rank higher in search engines. With a higher ranking on search engines, customers are likely to be exposed to the content and business offerings. The critical aspects of SEO are keyword research, backlinking, and web layout.

Fig. 2n - SEO, a type of digital marketing KPI

Social Media – social media KPIs help marketers keep track of social media campaigns. They include social media platforms such as Facebook, Instagram, LinkedIn, TikTok, and YouTube. These platforms provide analytics to give a comprehensive view of the progress of a campaign. Marketers get measurable results through these KPIs.

Search Engine Marketing – Search Engine Marketing (SEM) is a paid form of digital marketing KPI to improve the visibility of digital advertisements. Marketers use paid tools such as Google Ads to promote their ads and increase their audience. One of the main KPIs of SEM is PPC (pay per click), where advertisers pay for the clicks generated on an ad through the help of a paid tool.