What’s the measure of a successful marketing team? If you’re not measuring anything, you’ll never know. And if you’re measuring the wrong things, your understanding of your team’s relative success is completely off-base in relation to your real performance.
Unfortunately, proving ROI is one of the biggest challenges in digital marketing–and one of the most important feats when it comes time to make your case for next year’s budgeting. But measures of performance are hiding in your marketing metrics if you know how to measure them.
Here are some of the most important marketing metrics your team needs to know for 2020, why they’re so important, and how to measure them in relation to other marketing metrics.
Why use marketing metrics?
The short answer: because you don’t know what you don’t measure.
The long answer: you can’t succeed at what you don’t measure.
The reality is that without metrics, you’re at sea without a paddle or a compass. You don’t know where you are, where you intend to go, or your progress toward where you’re trying to end up. You don’t even know if you’re going in the right direction.
Metrics vs. KPIs
Think of metrics and KPIs as rectangles and squares: all squares are rectangles, but not all rectangles are squares. In the same vein, all KPIs are metrics but not all metrics are KPIs.
Marketing metrics are quantifiable measurements of performance. You take data from a source, like your Facebook page, and measure that data in certain ways.
Key performance indicators, or KPIs, are landmarks. In technical terms, KPIs are quantifiable measurements used to gauge your company’s long-term performance. These vary between companies and industries depending on your criteria.
Metrics would be things like your number of Facebook likes, while KPIs would be your progress toward a desired number of Facebook likes on a specific timeline. Metrics offer a snapshot of progress, while KPIs are more like vital signs.
That said, you need metrics–otherwise, you won’t have any context for your KPIs.
There are some metrics that you should always keep in your back pocket (and keep an eye on). These are more general, but they provide excellent context for how you’re performing as a whole. They also offer a starting point for many other metrics listed here.
Bounce rate is one of the most basic metrics every business (and we do mean every business) should have in their back pocket. It refers to the number of visitors who leave a webpage without taking an action, such as clicking, filling out a form, or making a purchase.
Alternately, it’s the number of visitors who only viewed one page but didn’t do anything further.
In other words, they bounce off your page like a rubber ball against a wall. Contact was brief and then they were gone.
It’s important for three reasons:
- Someone who bounces off your site doesn’t convert, which means lowering your bounce rate is an essential first step to boost conversions
- Bounce rate can be a ranking factor in SEO
- A high bounce rate tells you that something might be wrong with your page
Did you know that the average bounce rate is 41% to 51%? In other words, up to half of your site visitors come and go without engaging.
In marketing terms, you want your pages to be sticky. When users stick to a page, they’re more likely to do something on that page.
Keep in mind, however, that bounce rate is relative. It can tell you if you’re using the right content for a campaign or if your landing page layout isn’t working for your customers (when combined with other data), but on the other hand, users may bounce from a page because they found exactly what they wanted on the first try. This is where other metrics come into play.
Average Session Duration
One of those metrics is average session duration, which is exactly what it sounds like on the tin–the average amount of time people spend on your website in a single session. It’s calculated as the total duration of all sessions in a specific time period divided by the total number of all sessions in that same time period.
This is also known as dwell time, and it’s an indirect ranking factor.
Basically, this tells you how engaged your visitors are and where they’re most engaged. It may even trump page views.
Keep in mind that users tend to bounce on and off of pages rather quickly. Most visitors leave a page in 10 to 20 seconds, though a page with a clear value proposition that answers their needs will hold their attention longer.
In general, web pages have a negative aging effect, which means users tend to either leave quick or stay long. That’s because pages are of highly variable quality and users don’t have the patience for bad pages.
Keep in mind that like any metric, it only tells you part of the story. If your site visits are short but your visitors are converting, those short visits aren’t necessarily a bad thing: it means that users are coming to you because they know exactly what they want.
Conversions and Conversion Rate
In digital marketing, conversions are events that are tracked and recorded when an interaction is complete. Your conversion rate is the percentage of visitors who come to your site and complete a desired action.
There are two things you need to keep in mind:
- A conversion is not necessarily a sale
- A “good” conversion rate varies widely depending on your industry
Conversion types include:
- Clicking a URL
- Visiting a landing page
- A newsletter signup
- Content downloads
- Telephone calls to a number linked to a marketing campaign
As you can see, conversions vary widely. They depend on what you want the user to do. Your rate also depends on your industry–law firms will have quite a different rate from e-commerce sites.
Keyword Average Ranking
Listen, we can argue until we’re blue in the face about whether keywords are dead or whether they’re still important, but the reality is that targeted keywords still play a huge role in helping search engines identify what your content is all about.
What’s more, your keyword ranking for a given keyword is still essential in determining where your site will rank when a web surfer types that keyword into a search bar.
Your keyword average ranking refers to the average ranking you get from search engines for your targeted keywords. Pro tip: the higher you are, the more likely you are to perform well in search results.
Put it this way: there’s a years-old joke that says page two of Google is the best place to hide a dead body, and we’re still telling that joke for a reason. The higher your average keyword ranking, the higher you’ll rank in search results and the more likely you are to generate conversions for that keyword.
Search trends aren’t as familiar to new marketers as some of the other terms in our staples list, but it really should be.
Let’s say, for example, that your fourth-quarter site traffic is doing poorly. Search trends can help you figure out why the fourth quarter is doing poorly compared to other quarters of the year (for example, if you’re a seasonal business) or why your fourth quarter is doing poorly compared to fourth quarters of previous years.
This can be a great way to tell if you’re targeting the right keywords–or if you need to update your campaign strategy. If a keyword that’s worked in the past is slipping now, search trends can help you figure out the pattern and readjust.
Costs and Values
Show me the money! No, seriously. Show me the money.
Once you’ve got the basics down, you can start paying attention to the numbers that keep many marketers up at night: your costs. These costs indicate how much you’re spending at a given time–and how much mileage your money is getting you.
This list also includes a few essential values showing…well, how much value you’re getting for your investment. Let’s take a closer look at the numbers and what they mean for your company.
Cost Per Click
Cost per click (CPC) is a familiar metric for many digital marketers. It is a method websites use to bill based on the number of times a visitor clicks on an advertisement. This is often used when you have to set a daily budget.
In Google AdRank, your actual CPC is calculated as your competitor’s ad rank divided by your quality score plus 0.01. In plain English, that’s your ad costs divided by the number of clicks. Google Ads shows this information when calculating CPC on auctions for your target keywords.
In plainer English, an advertiser’s CPC will always be less than or equal to your maximum bid. Like most marketing metrics, this varies widely depending on the industry in question.
In addition, a “good” CPC will depend on your business. As a rule, you don’t want to burn all your ad spend in one fell swoop, but you also don’t want to be wasting pennies on low-value clicks either.
So, what do you learn from CPC? Basically, you learn whether you can save money on ads and whether you’re using your money effectively.
Cost Per Lead
A related metric to determine the cost-effectiveness of your marketing campaign is your cost per lead. Basically, cost per lead is an online advertising model in which the cost is determined by the number of qualified leads generated. This particular metric determines how cost-effective your campaign is at generating new leads for your sales team.
A lead in marketing is simply someone who shows interest in your brand’s products or services. This would make them potentially open to conversion by your sales team. There are three types of leads:
- Information-qualified leads
- Marketing-qualified leads
- Sales-qualified leads
Cost per lead is the cost of generating leads divided by the total leads acquired. Think of it as a middle ground between cost per impression and cost per sale. It’s a way to measure your marketing ROI, or how much you had to invest in order to get a worthwhile lead.
If you had to invest quite a lot, you may be paying too much to get leads. Chances are, there are more effective ways to generate leads. On the other hand, if you had to invest relatively little to get more qualified leads, that’s an excellent sign that your targeting is right on track. As such, your goal is always to minimize your cost per lead.
Cost Per Action
Cost per action is a related metric examining the investment required to get customers to complete a certain action. Like other “cost per” metrics, it’s a digital advertising payment model, and in this case, you’re only charged when a customer takes a specific action.
This particular strategy is low-risk for the advertiser, since the publisher assumes most of the risk. That said, it’s directly connected to your conversions–the more customers taking a specific action means more customers converting in that way, and in turn the greater success of your overall campaign.
This also shows how well you’re targeting your customers and how successful your campaign is at converting them. As with other “cost per” metrics, you want to lower your overall cost per action.
Cost Per Acquisition
Cost per action is not to be confused with cost per acquisition, though the two are often used interchangeably.
Cost per acquisition measures the aggregate cost of a customer taking an action which eventually leads to a conversion. Unlike cost per action, cost per acquisition is a specifically financial metric, as it includes the money spent on marketing and advertising. It focuses on actual conversions, not just leads.
Basically, it’s the cost of convincing someone to buy from you.
As with other “cost per” metrics, the lower your cost per acquisition, the better off you’ll be.
Customer Lifetime Value
Want to measure value? Customer lifetime value is a pretty good place to start. It’s so important that practically all businesses can benefit from measuring it.
Customer lifetime value is the total worth of a customer to a business over the whole duration of their relationship. That’s incredibly important because it costs five times more to make new customers than keep the ones you already have.
To calculate your customer lifetime value, you need to calculate a customer’s average purchase value and multiply it by the average purchase frequency rate, then multiply that value by the average customer lifespan.
Return on Ad Spend
Finally, there’s return on ad spend, which is a form of marketing ROI that helps you understand the cost-effectiveness of your ad campaigns.
Return on ad spend, or ROAS, is a marketing metric clarifying the cost-effectiveness of your campaigns relative to the amount of money you spend on them. In other words, are you getting enough bang for your buck, given how many bucks you’re spending?
Fortunately, it’s quite simple to calculate ROAS. Just divide revenue by your advertising costs.
You might compare ROAS at the beginning, middle, and end of an advertising campaign, or at various intervals over the lifetime of the campaign. Combined with customer lifetime value, ROAS goes a long way in determining future budgets, strategy, and even the direction of your future marketing efforts.
Online traffic: the only kind of traffic you like.
In much the same way that there are many types of traffic (highway traffic, city traffic, one-yellow-light traffic, late-for-work traffic, existential crisis traffic) there are many types of digital traffic. Knowing your traffic and your traffic performance helps you understand how your business is performing and how well you’re attracting customers.
Here’s a look at the types of traffic you should measure.
First is the basic traffic type that lays the foundation for the others: your overall traffic. If you click “All Traffic” in Google Analytics, this is the metric you’ll find. It shows how many people visited or engaged with your site in total.
This is good for a bird’s eye view of where you currently stand. It’s the starting point for most other traffic metrics listed here, and measuring it from one month or one year to the next is useful to observe growth. Looking at it holistically can also help identify patterns like traffic seasonality, making it easier to coordinate campaigns alongside ebbs and flows.
Unique Monthly Visitors
From there, you can start looking at traffic on the micro level, like your number of unique monthly visitors.
A unique visitor is a person who visits a site at least once within the given reporting period. Each visitor is only counted once, so the same person visiting the site multiple times only counts as one visitor. Your reporting period may be a few days or several months, so this metric can be adapted as needed.
This is one of the most basic traffic metrics you can track, and it goes a long way in displaying how many new visitors you get in a given time period. If you got an increase in unique visitors after starting an ad campaign, that may be a positive sign for the campaign’s success.
Traffic Generated by Channel
Remember the days when there were three TV channels? Much like TV, the Internet is no longer a three-channel situation, and marketing is no longer a three-channel situation either. You have to market on several diverse channels in order to find your target audience.
Your traffic generated by channel helps show your ROI for a given channel. This metric is exactly what it sounds like and will give you an idea of what channels are generating the most traffic (and thus what channels are most valuable for further investment).
Traffic by Device
In much the same way that marketing isn’t a three-channel event, users don’t consume media on three channels anymore either. They consume on a dozen channels, sometimes from multiple sources at any given time.
If you want to target your customers successfully, you have to know what devices they’re using–and adapt your content to ensure they get the best possible visitor experience on that device. In order to do that, you have to measure your traffic by device.
Social Traffic and Conversion
Let’s get social.
Social traffic and conversion is technically two metrics rolled into one, but it’s a useful two-for-the-price-of-one deal in that it connects your team’s social media performance with your social conversion rate. In other words, where is your team most successful in generating conversions, where are they struggling, and how can they bridge the gap?
The nice thing about this combination of metrics is that it’s rather adaptable (remember, conversions can mean several different things depending on what you want to measure).
Putting Your Marketing Metrics to Work
The thing about measurements? When they’re in stasis, they’re nothing more than numbers. You have to put them to work and watch them shift over time. Otherwise, you’ll be looking at snapshots instead of cultivating growth.
At Bear Fox Marketing, we’re committed to your company’s growth. We know that building and tracking successful campaigns isn’t easy, but we also know that it’s incredibly necessary for success. That’s why we work alongside you to develop a strategy that truly works for your goals.
Want to put your metrics to work? Get in touch today to find out how we can shift your metrics in the right direction.