We know we told you this before, but it’s worth repeating: personalization is the key to digital marketing success. Believe it or not, your audience can tell if your campaign is tailored to them. But how can you understand your audience well enough to craft a personalized strategy? Constantly tracking your digital marketing metrics can be a great help.
Understanding these performance indicators is essential not only for paid advertising but also for organic marketing efforts. Doing this keeps your strategy constantly improving, delivering better results for your company.
But let’s be honest, just looking at these digital marketing metrics can be overwhelming. Plus, there are those graphs and numbers that look like a new-found language.
Don’t worry, in this guide, we’ll help you understand these performance indicators for digital marketing as easily as possible. We’ll also highlight the essential metrics that will help you measure your digital marketing ROI.
What are Digital Marketing Metrics?
Metrics in marketing are quantifiable measurements that track the effectiveness of your campaign. These metrics can be anything from website traffic and engagement to lead generation and conversion rates.
You can use this data to understand your audience, optimize your campaigns, and ultimately achieve your business goals.
For example, you launch social media marketing for your new e-commerce business. To track the performance of your campaign, you may want to track relevant digital marketing metrics such as social media reach, engagement rate, Click-through rate (CTR), and conversion rate.
Digital Marketing Metrics Vs. Key Performance Indicator
Keep in mind that Metrics are different from the Key Performance Indicator (KPI) of your digital marketing campaign.
Digital marketing metrics are just the raw data for measurement. KPIs, on the other hand, are closely tied to your goals. It adds more context to your metrics because they’re accompanied by normal values that are relative to your industry.
Let’s have an example: let’s say you’re an e-commerce site that sells furniture. You’re KPI can be: “To increase online sales by 15% in the fourth quarter of 2024”.
To achieve this, you might track various metrics, such as website traffic, conversion rate, and average order value.
In a nutshell, Metrics are just data collected from your analytics tools, while KPIs show if you’re meeting your objectives.
Why Is it Important to Track Your Digital Marketing Metrics?
Imagine launching a high-budget marketing campaign but having no clue if it’s reaching the right audience or driving any results. That’s exactly what will happen if you’re neglecting digital marketing metrics. Monitoring your metrics is a crucial part of every campaign. Here’s why:
Measure Campaign Performance
Marketing metrics provide clear data on how your audience interacts with your campaigns. Is your social media content generating buzz? Are your targeted ads reaching the right people? Are your blog posts leading to conversions? By monitoring these metrics, you can identify what’s resonating with your audience and what’s falling flat.
Accurate Source of Data
Data is everything in digital marketing. According to Neil Patel, 97% of Google Ads campaigns fail without proper analytics. This is where your metrics become crucial.
Metrics are the quantifiable data points that provide valuable insights into your target audience’s behavior and preferences. Taking time to understand your metrics allows you to know which content they like to take, the platform they engage the most, and even a glimpse of their buying journey.
Data-driven Decision-Making
If you are constantly tracking your metrics, you don’t have to rely on gut instinct or guesswork in making your marketing decision. By examining your previous data, you can identify what’s working and what’s not. This allows you to optimize your campaigns on the fly, allocate resources more effectively, and make data-driven decisions that maximize your return on investment (ROI).
Identify Errors and Areas of Improvement
Regularly monitoring your digital marketing metrics can actually help you uncover inefficiencies in your e-commerce platform. For example, a high bounce rate on your website might indicate a usability issue. Similarly, a discrepancy between high add-to-cart rates and low purchase completions might reveal checkout process complications, such as an overly complex procedure, mandatory account creation, or the absence of a Shopify button.
Optimize Budget Spending
Marketing budgets are precious, so understanding the return on investment (ROI) is crucial. Digital marketing metrics like cost-per-click (CPC) and conversion rates give you insights into the actual revenue generated from your marketing efforts. This allows you to identify the most cost-effective channels, lower your wasted ad budget, and ultimately optimize your budget allocation for better results.
5 Metrics that Matter Most for Digital Marketing ROI
Let’s be clear: the most important metrics for digital marketing ROI will depend on your specific business goals. However, some key digital marketing metrics consistently provide valuable insights across various campaigns. So, if you want to track the success of your campaign, you can get started with these metrics:
1. Cost-per-Acquisition (CPA)
As the name suggests, Cost-per-Acquisition focuses on revenue. This metric shows the total cost you incur to acquire a new customer through your marketing efforts. It’s calculated by dividing your total marketing spend by the number of new customers acquired.
Calculation Formula: CPA = Total Marketing Spend / Number of New Customers
For example, you spend P10,000 on a social media advertising campaign and acquire 10 new customers. Your CPA would be P10,000 (total marketing spend) / 10 (new customers) = P1000 per customer.
A low CPA is generally ideal for business. It indicates that you’re acquiring customers for a lower cost, which can lead to higher profits and a better return on investment (ROI) for your marketing efforts.
2. Customer Lifetime Value (CLV)
In a nutshell, the Customer lifetime value is the expected amount a customer will spend in your business. This value can be determined based on historical data, which involves calculating the total profit generated from a customer’s purchases.
Interestingly, CLV can also be predictive. You can use your past data to forecast the revenue expected from each customer.
It is important to track your CLV metrics to understand the long-term value of your customers. If your CLV isn’t that high you may want to address this promptly. If your CLV is not particularly high, it’s important to take action promptly. This may involve implementing a loyalty program, creating a social media community or group, or enhancing customer service.
3. Return on Ad Spend (ROAS)
Return on Ad Spend or ROAS is a crucial metric to track if you are running Google ads or other PPC campaigns. As the name suggests, this is a conversion tracking metric that measures the revenue generated for every money you spend on advertising campaigns.
The calculation formula for ROAS is:
ROAS = Total Revenue Generated from Ads / Total Ad Spend
For example, you spent P10,000 on a Google ad campaign and generated ₱50,000 in sales. Here your ROAS would be: ₱50,000 (revenue) / ₱10,000 (ad spend) = 5.
In the above example, you’re generating ₱5 for every ₱1 you spend on the campaign. High ROAS is ideal for your business. It means your marketing efforts are effectively driving visitors toward your desired outcomes.
It is important to regularly track your ROAS metrics. This will help you identify which channels and campaigns are most successful in generating conversions. Depending on the results, you can adjust your strategy or ad spend for maximum ROI.
4. Conversion Rate
If you previously launched a campaign, this metric should already ring a bell. The conversion rate metric measures the percentage of website visitors or leads who take a desired action.
Unlike the metrics mentioned earlier, this measure is not solely based on monetary value. Aside from sales, it can also be used to gauge other actions such as signing up for a newsletter or downloading an ebook.
The calculation formula for the conversion rate is:
Conversion Rate = (Number of Conversions / Total Number of Visitors or Leads) * 100%
Let’s give you an example:
You created a blog on your website about a healthy meal plan to reach a new audience. To generate new leads, you added a free downloadable healthy meal plan e-book in exchange for your visitor’s email address.
Let’s say your blog generates 320 clicks and 50 downloads. To compute we will have: 50 (downloads)/320 (downloads) x100% = 15.63%
That means that approximately 16% of users who clicked on your blog went on to download your e-book. This could mean that your lead generation campaign is a success.
5. Website Traffic
Website traffic measures the total number of visitors your website receives over a certain period. While this metric doesn’t tell you the actual revenue you are generating, it still plays a crucial role in your marketing funnel.
You can use your website traffic to understand your audience’s behavior. You can see which pages they visit most, how long they stay on your site, and where they come from. This knowledge allows you to tailor your marketing messages and website content to resonate better with your audience.
The website traffic is one of the most fundamental metrics and is also the most accessible. To monitor this digital marketing metric, you can simply visit your Google Analytics, search console, SEO tools, or other third-party sites.
Build Data-driven Digital Marketing Strategies
Personalization is the key to a successful digital marketing campaign. To do that, you need to track the right digital marketing metrics continuously.
However, it doesn’t stop there. You need to translate these data into actionable insights that will help you improve your campaign. This step requires expertise.
That’s where we come in. At Be Global E-commerce Corporation, we will help you identify the metrics that matter and turn them into clear insights. We combine a data-driven approach with their creative flair to ensure your message truly connects with your audience.
Want to know more about how it works? Reach out to our team now, and let’s create a data-driven marketing strategy that gets results.
