When it comes to measuring the performance of your digital marketing efforts, there are two kinds of metrics: numbers that drive business decisions and everything else.
Unfortunately, we don’t always geek out on the right ones.
While it’s rare to find a business that isn’t measuring and analyzing its online data, the cold hard truth is that we don’t always base our decisions on the right key performance indicators (KPIs). We tend to tout success with fancy pie charts and glorify vanity metrics like pageviews and impressions that often don’t make any real impact on overall business. Predictably, this misstep translates into metrics that fail to provide any real insights or direction to the C-suite.
Case in point: In this golden age of data intelligence, this 2019 CMO Survey found that only 36.4% of companies can quantitatively demonstrate the impact of their marketing spending.
If we want to tell a better story about how our digital marketing campaigns are impacting the bottom line, we need to focus on KPIs that align with business goals.
Here’s a good place to start.
Pageviews vs. Goal Conversion Rate
Remember when every website had a counter at the bottom of the page telling you how many hits a website had? We’ve graduated from that, right?
The problem isn’t so much with pageviews themselves; it’s that we get stuck looking at this metric and inflating its value when we don’t have any other numbers. Maybe we ran a campaign that increased our website traffic by 25%. That’s a positive stat that everyone wants to hear. But if we didn’t generate more leads or increase our sales, what good did that traffic increase do for us? Would you recommend increasing your marketing spend based on a traffic increase alone?
The point is that our goal isn’t necessarily to get more traffic. It’s to get more visitors who will take a desired action on our website. If you can’t track direct sales and revenue, here are a few key actions that decision makers might want to see before analyzing a digital marketing campaign:
- Lead generation: Form submissions, newsletter signups, ebook downloads
- Contacting sales: Phone calls, emails, outbound clicks to third-party sales reps
- Spec sheet downloads
We can set up tracking for these actions (and many others) with Google Tag Manager and then create goals in Google Analytics to show how different tactics and campaigns are leading to a desired action on our website.
From there, we can pivot to a metric that means something: goal conversion rate. We’ll be able to see what percentage of our users complete a goal on our site, and we can analyze that metric from different angles.
If we want to evaluate the effectiveness of our marketing channels and provide data to recommend one tactic over another, we’ll have the goal conversion rate for our organic search, paid search, email marketing and social media efforts. If we see a higher goal conversion rate within a particular demographic or market, we can now provide our team with some insight into how we should allocate our ad spend around different audiences. As an added bonus, our recommendations are now data driven, making us look smarter.
With a goal conversion rate, we can show the value of our increased traffic — not just that we have more traffic.
Impressions vs. Return on Ad Spend
Impressions measure the number of times that your content might have been shown to someone during a brief window of time. Not exactly the kind of data point that’s going to sell the success of your digital marketing campaign, is it?
Impressions are not a totally irrelevant metric because, given the right context, they could tell us some things about ad delivery and how viral a piece of content may have been. However, digital marketers use this metric all the time to make campaign recommendations even though it tells us little about what’s happening behind the scenes.
What’s worse is more impressions aren’t necessarily a good thing. During my experience with one ecommerce business, we worked with a paid media partner that touted its high volume of display ad impressions for a relatively modest ad spend. When we started to notice that we were being retargeted by the multiple versions of our ad on the same web page, it quickly became apparent that our entire audience was being overserved ad impressions.
If you want to figure out how effective your campaign is, it comes down to understanding whether your content or ads are leading users to a desired behavior. Return on Ad Spend (ROAS) is one of the best metrics for tracking this because it examines how much revenue you’ve gained for every $1 you’ve spent in advertising. For example, if your Facebook ads have generated $1,600 in revenue from a $200 spend, your ROAS would be 8:1. Is that good? For many businesses, yes. For others, maybe not. Use your first campaign as a benchmark to determine what’s a reputable ROAS for you.
Of course, it’s far easier to track ROAS when you’re running an ecommerce business. It can be trickier to calculate this metric if you’re running a B2B business where the buying decision doesn’t happen on your website. If you’re more focused on lead generation, cost per acquisition (CPA) may be the ideal metric for you. Or you could compare your costs against one of the conversion goals (form submission, ebook download, etc.) that you’ve identified for your website.
The point is, you should be making campaign decisions and analyzing costs based on the actions that users are taking on your site. It’s never a good idea to base your decisions on what your audience might have done.
Time on Site vs. Returning Traffic
One of our go-to metrics for proving engagement is time on site. If users spend more time on our site, the prevailing assumption is that they must be more engaged with our content.
In reality, this metric is often misleading.
Our audience may be spending eight minutes on our website because they love reading our content, or they may be spending eight minutes on our website because the navigation is a cluster and they can’t find what they’re looking for. Without getting into the heads of our users and doing usability testing, who really knows?
If our aim is to retain an audience, let’s focus on that. In Google Analytics, the Cohort Analysis report allows us to see how good we are at retaining our audience. If you filter the cohort size by week, you’ll be able to see how frequently users who come back to your website each week. We can see the percentage of visitors who return to the site one week (or more) after their initial visit.
Why does this matter? If we know that the average site visitor comes back three times before becoming a lead or customer, we now have an important metric that we can focus on improving. We need engagement and more returning traffic because that leads to more conversions. By working to improve this metric, we’re now in the business of trying to influence site behavior rather than making biased, self-serving assumptions.
With the right mix of KPIs, we can measure the effectiveness of our digital marketing campaigns and improve decision making. That’s not to say we should abandon all other metrics and focus only on ones that align with our business objectives. Every metric — yes, even impressions — provides some diagnostics into user behavior. But fundamentally, we need to understand how our campaigns are impacting our business and improving customer acquisition and retention. Without that knowledge, we’re left guessing.