Digital marketing KPI is a measuring tool used to evaluate the success of a marketing strategy in achieving certain targets. In contrast to KPIs that are used to evaluate certain individuals or companies.
It is often said that 80% of the return comes from the 20% of the income you have. Many digital teams rely on marketing KPIs to make decisions and assess their marketing data in an informative and organized way.
The tool helps companies achieve their best results through a measurement. Because it is very important to measure campaigns or promotions with quality and accuracy, because the indicators will show the performance of the strategy.
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What are KPIs?
KPI or Key Performance Indicator is a tool to review and evaluate the success of a person or a particular company. Key performance indicators help someone to evaluate individual and company performance in order to achieve targets.
The performance management system can be measured using key performance indicators in order to be able to achieve targets and have good benchmarks. These work indicators present the performance of all parts of the organization and the interrelationships of each part.
Some of the characteristics of key performance indicators are non-financial measures, regular measurements, management, all individuals, positive effects, responsibility, others. These characteristics are certainly different from those of digital marketing KPIs.
You need to know that this affects the level of effectiveness of key performance indicators. Because, by knowing the factors of influence you can run the KPIs correctly, so that you will achieve success.
Because in some cases, companies only adopt key performance indicators without implementing them. This of course means nothing if you just keep quiet, so you have to know the supporting factors and their influences.
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In developing a strategy for its preparation, the team must look at the goals of your organization. So that you can plan how to achieve the target in accordance with the vision and mission of the company’s organization.
Meanwhile, digital marketing KPIs are marketing metrics, used to provide an overview of performance related to certain promotions. The preparation is important because it can improve employee performance to achieve business targets. You can use the employee performance application as a tool for evaluating employee performance that is integrated with KPIs, attendance, and the payroll system.
Key performance indicators have a clear purpose so as to motivate employees to work optimally. That way, performance measurement through existing data and information can be used to make decisions.
So if asked about how important key performance indicators are, the answer is of course very much needed. Especially to understand the marketing strategy used will bring profit according to not.
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Various Benefits of KPI Marketing for Digital Business
After knowing what KPI marketing is, you are of course curious about what are the main uses of this marketing KPI, right? In general, this marketing KPI has many uses, including the following:
1. As a work motivation
You need to know, that every company or individual that carries out an assessment by implementing marketing KPIs needs to distribute it to all employees without exception. Because everyone wants change, be it in terms of income earned, performance and others. So that with this marketing KPI, it can be an encouragement for many people to work.
2. Measuring the performance of a successful digital marketing business
Another use for KPI marketing is that it can measure the performance of a digital marketing business. In this case, you will be able to find out easily to what extent the business conditions that you are running on the market are experiencing growth or decline.
If a decline is found, then you can immediately find out what the cause is and how efforts are made to overcome the problem.
3. Making the business run more effectively
Utilizing marketing KPIs will also be very helpful in making the business run more effectively. What’s more, a business in its journey needs control/responsibility holders. Whether it’s for production problems, employees and so on.
With this marketing KPI, it can make it easier for those responsible for monitoring every small part of the company they lead.
4. Accurate Strategy
Generally, in a digital marketing plan there is a plan of goals and strategies to be used. Therefore, to visualize the effectiveness of a strategy, KPI is needed. By looking at the results of the KPI indicators, it will prove how appropriate the choice of strategy is.
KPI will also help digital marketers to investigate strategies that were previously unsuccessful so that they can be used as evaluation material for implementing the next strategy.
5. The Right Investment Budget
Usually, companies that are still on a small scale, will try to save on digital marketing budgets. Therefore, KPIs will help companies to know which strategy is most effective.
This will also help companies to save on budgets by spending funds only on strategies or campaigns that have proven successful.
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Examples of digital marketing KPIs
Marketing is a process or activity that has an ongoing nature regarding the various plans and mix of the company’s products.
Here are some examples of digital marketing KPIs, including:
A. KPI Lead Generation
The more leads you bring in, the more likely it is for your business to get sales. Therefore, measuring the success of your lead generation strategy is crucial in your efforts to increase sales.
There are several metrics that you can monitor to help you optimize your lead generation strategy.
1. Monthly New Leads
This metric indicates the number of leads generated per month. A lead can be someone who signs up for a free trial, creates an account on your online retail site, or something else.
- How to measure : You can use the help of pipeline management software such as Hubspot, Agile, or Salesforce to make it easier for you to get the latest data and filter data based on a certain period.
- How to optimize: Increase the cost-per-click budget of advertising campaigns, create SEO-friendly content so that it can be easily found on search engines, provide new discount offers.
2. Qualified Leads per Month
Monitoring the number of quality leads that you have managed to get can help you to assess whether your marketing campaigns have been effective or not in achieving the right target leads.
Prospects who have the potential to become your customers can be categorized into three groups:
- Marketing qualified leads (MQL) – leads passed on to the sales team by the marketing team.
- Sales-accepted leads (SAL) – prospects that are accepted by the sales team and will be followed up with customers .
- Sales qualified leads (SQL) – leads that have great potential to become customers.
For how to measure and how to optimize as follows:
- How to measure : Categorize all the leads you get into sales funnels .
- How to optimize : Create a campaign targeting a specific audience.
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3. Cost per Lead
Cost-per-lead (CPL) is a digital marketing KPI that shows how much it costs to acquire new leads. You can use this metric to measure whether the marketing you are doing has brought benefits to your business or not.
- How to measure : Add up the time, effort and costs spent on carrying out your marketing activities and then compare the results with the number of monthly leads.
- How to optimize : Identify which marketing campaigns are most successful in bringing in leads and add budgets as well as time allocations for these campaigns.
4. Cost per Conversion
This digital marketing KPI measures how much it costs to get leads that become customers.
Even though an advertising campaign can generate hundreds of leads, usually only a small percentage will become your clients. Apart from campaigns, you can use the customer service application to service customers on various communication channels.
If your cost-per-conversion is lower than your customer lifetime value, it could be that your digital marketing strategy is still not effective enough to generate profits for your business.
- How to measure: calculate the costs you incur on your lead acquisition sources such as ad campaigns, blog content, social media management, and others. Then identify how many leads from each source have become your clients.
Divide the total cost of leads per month for each source by the number of conversions to get how much it will cost you to acquire new clients.
- How to optimize: Create campaigns with specific target audiences, improve the user experience of your services or products.
B. Monthly Website Traffic KPI
Apart from monitoring the overall traffic from your website per month, it’s also a good idea to know the number of visits from each page category such as homepage, blog, landing page, and other categories. You can use this data to evaluate which part of your website has the highest conversion rate.
- How to measure : use website analytics tools such as Google Analytics.
- How to optimize : to increase website traffic, you can run paid search campaigns or run SEO efforts to get more visitors from organic search.
1. Returning vs New Visitors
By measuring the percentage of returning visitors, you can find out how engaged your audience is with the content on your website. A low return rate on your blog page can be an indication that the content you have created is not interesting enough to make the audience revisit your blog.
How to optimize: Present useful information in your blog content and landing page. Apart from that, you can also do remarketing ads to remind your website visitors about the brand and products or services that you offer.
2. Website Conversion Rate
Evaluating which pages are bringing in the biggest conversions can help you figure out what kind of content is most effective at bringing in conversions.
- How to measure : Google Analytics allows you to find out the conversion rate of each page.
- How to optimize : Experiment with various elements in your landing page to increase the conversion rate. For example by changing the CTA, adding an image, or changing the page copy.
3. Average Visit Time
One of the factors that Google considers in determining ranking in its search results is the relevance of the page to a search keyword.
Therefore, paying attention to the visit time of each of your pages is very important, especially for organic traffic. The longer visitors visit your page, the better.
- How to measure : Use Google Analytics to see the average number of visit times from each page of your website.
- How to optimize : Present interesting and useful content on your website. Also add visual assets such as images and videos that can attract the attention of visitors to your landing page.
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C. KPI SEO (Search Engine Optimization)
Organic traffic that comes from search engines is one of the most valuable assets in digital marketing. Some of the SEO KPIs below focus on measuring the quality and quantity of organic traffic on your website.
1. Traffic from Organic Search
This SEO metric shows the number of visits per month from your website that come from search results via search engines such as Google, Bing, and other search engines.
How to optimize: Improve your website content according to on page SEO best practices to get a better ranking of search results.
2. Page Authority dan Domain Authority
High page authority and domain authority will help your content to perform well in search engine results. You can monitor these two metrics through several SEO tools such as Moz, SEMrush, and Ahrefs.
- How to measure : Use the Moz browser extension to make it easier for you to see the page authority of each website page.
- How to optimize : Multiply internal links to your website pages. Apart from that, running off-page SEO is also an effective way to increase page authority and domain authority.
3. Increase in Ranking from Target Keywords
When a user searches via Google, it is unlikely that the user will continue the search to the second or more search pages. Therefore, knowing the search ranking of website pages is very important to know your SEO performance.
- How to measure : Use Google Search Console to see the performance of your website pages based on certain queries or keywords.
- How to optimize : Applying on-page SEO techniques is an effective way to increase the search results ranking of your page.
4. Inbound Links to the Website
Focus on measuring quality inbound links from your website pages that have high search rankings. The number of inbound links received can be a measure of how often the content you create is shared on other websites.
Apart from that, the number of inbound links can also be used as an indicator of how influential your website is in a particular industry.
- How to measure : Use SEO tools like Moz, Alexa, SEMrush, or Ahrefs to crawl your website and see the number of inbound links it receives.
- How to optimize : Increasing your brand reputation will go hand in hand with increasing the number of quality inbound links your website receives. Therefore, build your brand’s reputation as an expert on you by publishing articles, whitepapers, case studies, and reports.
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D. KPI Online Advertising
Many businesses fail to run online advertising simply because they are negligent or careless in evaluating the ROI profitability of their strategies.
Monitor digital marketing KPIs for your online advertising to be able to make your online advertising activities more effective and efficient.
1. Leads & Conversions from Online Advertising
Pay attention to the number of leads and conversions from your online ads per month. In addition to measuring the success of your online advertising strategy, this can also help you compare the performance of your paid marketing strategy with your non-paid marketing strategy.
- How to measure: If you use Google Ads, you can see the performance of online ads running through your Google Analytics account.
- How to optimize: Improve your online ad copy and visuals and only aim for keywords relevant to the product or service you offer.
2. Cost per Conversion
Bringing in leads and new consumers through PPC advertising can require substantial expenditure. Therefore, it is important for you to measure the ROI of your PPC advertising strategy.
Compare your cost-per-conversion figure with your customer lifetime value to make sure the ad campaigns you run will benefit you in the long run.
- How to measure: We recommend that you measure this KPI within a period of two months considering that turning leads into consumers takes a long time.
Calculate all your monthly expenses for ongoing advertising campaigns, then divide that number by the number of new clients or consumers you get. - How to optimize: Target keywords with a relatively low level of competition. You can also improve your landing page so that visitors are more confident about providing their personal information to your business.
3. Click-Through Rate (CTR)
This online advertising KPI gives a big picture of the effectiveness of your PPC campaign. If your CTR number is low, then this can be an indicator that the advertising content that you are creating is not effective enough in persuading users to enter your landing page.
- How to measure: Each advertising platform generally provides CTR data from each ad that you run.
- How to optimize: Continuously perform new experiments on your online ads such as changing ad visuals, improving ad copy, changing CTA, and many more.
E. Social Media Marketing KPIs
Running social media marketing can help your business achieve various objectives such as increasing brand awareness, building community, or getting new consumers.
Regardless of your goals for running social media marketing, here are some digital marketing KPIs for social media that can help you measure the effectiveness of your strategy.
1. Audience Size
Monitor the number of your followers per month to measure how big the audience is from your account. Increasing the number of followers can be a signal that the posts you share are effective in attracting the attention of a new audience.
- How to measure: Use social media marketing tools such as Later and Buffer to make it easier for you to monitor engagement data and increase the number of followers from your account.
- How to optimize: Share original content, create social media campaigns with a clear target audience.
2. Engagement Rate
Engagement rate shows the number of people actively engaging with your posts. These interactions can be in the form of likes, clicks, comments, or sharing your posts.
- How to measure: Total the interactions you receive on each post and divide that number by the number of followers you have.
- How to optimize: Create engaging content that invites your audience to leave comments or share on their accounts.