As a digital marketer, you’ve likely experienced the challenges that come with determining return on investment (ROI) for your marketing campaigns. From quantifying the impact of your display advertising efforts to knowing where your most valuable website traffic is coming from, it can feel impossible to attribute success or adopt new strategies without the right marketing metrics at your disposal.
With so much data and complex web analytics tools like Google Analytics or Search Ads 360, how can you determine the right metrics to properly measure performance? Through this guide, we’ll help you uncover the best marketing ROI metrics to demonstrate key performance indicators (KPIs).
Measure Success With These 10 Digital Marketing Metrics
When it comes to determining digital marketing KPIs, websites that do not strictly sell merchandise — including business-to-business (B2B) firms and sites that provide specialty services — are notoriously difficult to measure. On the other hand, business-to-consumer brands may decide to focus on KPIs that immediately impact the bottom line, but this approach doesn’t paint the full picture. The continuous improvement of your marketing strategy requires analysis of many different metrics that all contribute to overall ROI.
Whether your organization is B2B or consumer-facing, here are 10 marketing ROI metrics that will help you accurately track the progress and performance of your online marketing initiatives with ease:
1. Traffic by Source
A great way to analyze your digital marketing efforts is to review traffic generated by different channels. Within a platform like Google Analytics, you can view traffic by various sources like organic, paid, referral, social media, and direct, which gives you a clear picture as to where potential customers are coming from. For instance, if your organic traffic is up, you could attribute this to your search engine optimization (SEO) efforts. If paid traffic is up, this could be attributed to your current paid search campaigns.
2. Unique Monthly Visitors
Many digital marketing strategies aim to increase website traffic, so measuring your overall unique monthly visitors is a great way to see if your programs are operating efficiently. To go one step further, you can filter unique monthly visitors by traffic source, which gives you a closer look at what source is creating the biggest impact.
3. Cost per Lead
Measuring your website’s cost per lead (CPL) is an essential way to determine if your digital marketing strategy is working over the long term. Simply put, CPL tells you if your marketing programs are profitable. This metric is commonly used to determine the value of pay-per-click (PPC) campaigns, among other digital campaigns.
For example, you can find the CPL for your PPC campaigns directly in Google Ads via the “cost-per-conversion” metric. It’s important to note that CPL can be used for other marketing initiatives as well, as different traffic sources could play an indirect role in lead creation. To calculate CPL for an entire campaign, simply divide your total digital marketing investment by the number of leads you obtain. And, to take it one step further, set up advanced tracking to identify marketing qualified leads (MQLs) as customers move down the sales funnel — this is a favorite among B2B and lead generation businesses.
4. Cost per Acquisition
Cost per acquisition (CPA) is similar to CPL, but it focuses on conversions instead of just leads. At its core, CPA identifies how much it costs to acquire a customer and can be calculated by dividing your total digital marketing investment by the number of customers you acquired over a fixed period of time. To take CPA one step further, don’t forget Customer Lifetime Value (see #8).
5. Conversion Rates by Source and Device
While measuring traffic by source is a great way to identify which programs are working well, it doesn’t show you the entire picture. To go two steps further, you can measure the conversion rate for each traffic source by device, which allows you to focus your efforts on desktop, tablet, and mobile channels that are primarily turning leads into paying customers. This can also be an indicator of site issues between the mobile and desktop variations of your website. Be sure to know how your audience would prefer to convert and where they’re actually converting.
6. Return on Advertising Spend
Determining the ROI of your advertising campaigns is simple and straightforward. To calculate Return on Advertising Spend (ROAS), divide the total revenue generated from your advertising campaign by your total ad spend. This digital marketing ROI metric is crucial to benchmark if you are running any type of online advertising program.
7. Page Performance
Whether you’re analyzing a blog post or a landing page, reviewing page performance is critical to understanding how well a page is performing. Using a tool like Google Analytics, look at metrics like bounce rates, click-through rates (CTRs), conversion rates, and conversion assists to paint a picture as to how receptive your audience and search engines are to your content. If you notice pages are performing poorly, this is a great opportunity to focus content efforts on revisions or eliminate dead website weight.
8. Customer Lifetime Value
Understanding customer lifetime value (CLV) is important for any type of business or digital marketing program. Simply put, CLV tells you if the amount of money you spend acquiring a customer is worth it. For instance, if a new customer spends $100 on a good or service, but you spent $100 getting that customer to convert, then that sale would be a wash.
However, if you know this customer is planning to spend $100 each month for the next year, the customer lifetime value is $1,200 — which makes this relationship profitable over the long-term. CLV is easiest to measure with paid ad spend or e-commerce websites, while specialty services and B2B firms need to come up with general projections or use historical customer data to attain this digital marketing KPI. That said, it’s certainly a worthwhile venture to uncover the CLV, so you know your marketing budget is going where it should be.
9. Average Search Engine Results Page Position
For your organic digital marketing initiatives, you can measure the average rank that search engines like Google give your pages on the Search Engine Results Page (SERP) for target keywords. Pages that perform well appear closer to the top of the SERP. The holy grail is Position 0 (like a featured snippet), Position 1 for a regular web listing, or — for local businesses — showing in the Local 3-pack. The lower your sitewide average position gets, all else held equal, the more organic traffic you will acquire — meaning your content marketing and SEO efforts are showing positive results.
10. Branded Search Queries Over Time
Analyzing branded search queries over a period of time allows you to see if you’ve experienced a lift in brand awareness. By keeping tabs on the number of monthly searches that explicitly feature your brand name, you can determine the ROI of your digital marketing program as a whole. Simply put, the more branded searches you receive each month, the more your business’ name is getting out there through both organic and paid marketing efforts. This is an especially important metric when investing in difficult-to-attribute efforts like display advertising, digital TV, content marketing, and other top-of-the-funnel efforts.
While Google Search Console will help you uncover this data, you can also use tools like Google Trends to view general trends over an adjustable period of time.
Accurately Assess Your Digital Marketing Efforts
With these 10 marketing ROI metrics, you can accurately report on and assess your paid and organic efforts and adjust your programs where needed. If you have any questions about how to turn your digital marketing performance reports into actionable insights, don’t hesitate to drop us a line today.