With the vast amount of digital marketing resources currently available, businesses interested in improving their performance can easily benefit from implementing a few simple techniques. Successful digital marketing campaigns emphasize metrics known as key performance indicators (KPIs). These measurable values are collected and analyzed by setting specific goals and monitoring the progress made toward achieving them. To determine what works best for your business so you can improve your digital strategies, check out the list of KPIs detailed below.
Eight Digital Marketing KPIs Vital for Your Business
Your business should be tracking the following eight digital marketing KPIs:
1. Inbound Link Building
The first step in achieving your digital marketing goals is to bring potential customers to your site to indicate their interest in your products and take appropriate actions. Through inbound link building, you can increase the number of inbound links to your web content from other websites. Whenever an outside source provides a link to your website, this serves as a signal to consumers that your content is reliable, trustworthy, and features useful information. Increasing your number of inbound links increases your website’s ranking on search engine pages related to particular keywords.
2. Impressions Served
An impression is defined as a single occurrence of a digital advertisement being presented online. The number of impressions represents the number of instances your advertisement displays to an audience of potential consumers. Therefore, tracking the number of impressions served provides helpful insight into how aware consumers are of your business and the products it offers. This metric allows you to pinpoint the exact number of impressions necessary for your company to remain at the forefront of consumers’ minds throughout the entire purchasing process.
3. Conversion Rate (CVR)
Conversion rate monitors the percentage of visitors to your website that perform a desired action, such as registering as a member, subscribing to a newsletter, or buying a product. In other words, CVR tracks the number of visitors who browse your site and identifies the proportion who actually convert, offering key information on your website’s level of optimization and how it can be improved. A high conversion rate is based on many factors that must work together effectively to achieve the optimal results, including the visitor’s degree of interest, the appeal of the products, and the ease of completing the conversion process. Maximizing CVR requires ensuring your website is exposed to the appropriate audience in the right place at the most advantageous time. It is vital to consider your products’ value proposition, how well this is communicated to your audience, and how intuitive your site is, based on easy navigation and fast loading speeds.
4. Bounce Rate
Also referred to as exit rate, this metric collects data on the percentage of visitors to your website who leave the site immediately after only viewing one page. Analyzing bounce rate offers information on how many visitors leave your site and at which point they decide to do so, allowing you to determine the effectiveness of your website design and its content in appealing to the intended audience. Your goal bounce rate should be below 40%, meaning anything higher than this suggests substantial room for improvement. A high bounce rate indicates that a page may be unattractive, unhelpful, or irrelevant to the channel, or that tracking or coding errors are preventing proper page loading and discouraging visitors from continuing on your site.
5. Cost Per Click (CPC)
Cost per click monitors the average amount of money your business spends for every click on an advertisement by dividing your campaign’s total cost by the number of clicks it achieves. This measurement helps businesses develop appropriate budgets and specific bid amounts, so they achieve the highest number of clicks without spending too much on advertising. Cost per click is often used interchangeably with pay per click (PPC), but they provide different measurements. PPC involves payments related to visitor click-throughs, while CPC focuses on the cost a business spends on a per-click basis for marketing contracts that do not depend on click-throughs.
6. Cost Per Action (CPA)
This digital marketing model features an arrangement in which a business agrees to exclusively charge an advertiser based on visitors’ specific actions. In a CPA model, each action correlates directly with a specific type of conversion, such as website registrations or product sales. This provides data that measures how visitors behave as the direct result of the marketing campaign’s success, helping you maximize your return on investment in advertising expenses. If your goal is to increase conversions, tracking your CPA helps optimize the target audiences, channels, and marketing strategies, generating the most leads and driving the highest conversion rates.
7. Revenue Per Channel
By measuring how each channel you’re employing in your marketing campaign performs, you can identify which channels offer the highest value and which channels do not perform at the appropriate levels to justify your investment. Monitoring revenue per channel can inform your campaign in many ways. This metric reveals consumer trends, allows you to anticipate expectations, and properly allocates your budget. Tracking revenue per channel means you can precisely refine your marketing strategies over time to improve the consumer experience, generate leads, and encourage conversion.
8. Return on Advertising Spend (ROAS)
Considered the absolute best KPI for measuring your marketing campaign’s effectiveness, return on advertising spend calculates the revenue you obtain for every dollar you spend in your advertising budget. ROAS helps you recognize which strategies are successful and how they can be further optimized in the future. This figure is calculated by dividing the amount spent on a campaign by the gross revenue it generated. For example, spending $2,000 per month on advertising and earning $10,000 in revenue means your ROAS equals 5:1, or that every $1 you spend can be expected to generate $5 in revenue. Every business requires a different ROAS based on its own unique performance goals, but a useful benchmark for most businesses is around 4:1.
Upgrade Your Digital Marketing Strategies Today
Utilizing KPIs is integral to enhancing your business as it provides you with all of the data you need to inform strategic and operational decision making. Properly monitoring the analytics described above allows for the distillation of complicated information into an organized and easy-to-interpret format. Emphasizing these KPIs in your digital marketing strategy offers the ability to significantly enhance your business in terms of brand awareness, site activity, customer engagement, conversion rates, and overall sales and revenue.