What are digital marketing KPIs?<\/h3>\n
Digital Marketing KPIs or Key Performance Indicators are quantifiable goals that help you to track and measure success. In a changing marketing landscape, such as today in the era of digital disruption, it's more important ever to plan your short-term and long-term KPIs that you select for digital marketing dashboards. See, for example, the recommended KPIs in the Smart Insights RACE digital marketing dashboard<\/a> which we built for members using the latest version of the free tools Looker Studio and Google Analytics 4.<\/p>\n The most important part of setting a digital marketing KPI is choosing what to measure. You really don\u2019t want to go wrong at this stage but don\u2019t worry, it\u2019s pretty simple \u2013 just make sure you measure factors that will have an impact on your organization\u2019s targets or goals.<\/p>\n You need to select both Effectiveness KPIs that help show the overall contribution that digital marketing is making to your business and Efficiency KPIs that help review how well your marketing funnel is working. See Dave Chaffey's article for examples of the difference between Effectiveness and efficiency KPIs for digital marketing<\/a>.<\/p>\n Often KPIs are connected to a \u201cconversion\u201d metric. In today's competitive landscape, conversions are more important than ever. As a general rule, conversions should be specific (i.e. easily to define and measure) and significantly beneficial (E.G. a user filling in a contact form on making a purchase). You will set targets and goals for each conversion type, so it's vital to focus on the added value to the company with each conversion event.<\/p>\n Use our useful infographic to determine which digital marketing metrics to track:<\/p>\n Some KPIs should be channel-specific and others will relate to overall business goals. Many organizations will need KPIs of both types in order to measure both channel performance and the impact this then has on overall goals.<\/p>\n In larger organizations, different individuals or teams will run individual channels so each should be measured separately. In a smaller team, or this will be divided up in a way that works for your marketing mix. If you're looking for more inspiration on goal setting, find out more about how and why marketing goals can help you achieve success<\/a>.<\/p>\n NB some parts of your marketing mix may need more attention than others, so it's worth planning your priorities in this case, and attributing appropriate resources.<\/p>\n The chart below shows examples of KPIs and Leading Indicators for 6 typical digital marketing channels:<\/p>\n I have based these on an E-commerce client so they mainly focus on conversions and revenue.<\/p>\n However, it's important to note that digital marketing channels don\u2019t all have the same primary KPI. This is because, in this example, not all channels are likely to have a direct impact on revenue\/conversions.<\/p>\n For example, it might be unrealistic to expect social media to have a direct impact on revenue depending on your offering. Therefore the primary KPI for social media might be 'reach'.<\/p>\n In the above example, the primary KPI for PPC is cost per acquisition rather than revenue as revenue would only give us part of the picture. Any big changes in PPC budget would have a significant impact on revenue but this wouldn\u2019t be an indication that the PPC activity is going well necessarily. It\u2019s better to measure cost per acquisition as this takes budget changes out of the calculation.<\/p>\n This one is all about prioritizing. I recently attended a workshop called How to Build your Digital Strategy presented by a man from Indus Net Techshu<\/a>, a very successful Digital Marketing agency from India. Amongst many interesting ideas one, in particular, stood out:<\/p>\n \u201cYou can fix your KPIs or you can fix your budget. They can\u2019t both be fixed.\u201d<\/p><\/blockquote>\n The idea of KPIs being so heavily dependent on a budget is particularly relevant for PPC Campaigns. Often clients or bosses will have an idea about what KPIs they want to achieve along with what budget they want to spend before doing any research or talking to an expert. This is no good as the KPI has essentially just been plucked from the ether.<\/p>\n An example:<\/p>\n Your boss asks for 20 conversions with a spend of \u00a3500 but your target keywords cost \u00a35 a click and the site has a 4% conversion rate.<\/p>\n 500 [\u00a3spend] \u00f7<\/strong> 5 [\u00a3CPC] = 100 [visits] x 0.04 [4% conversion rate] = 4 [conversions]<\/p>\n In this situation, you would set a KPI of around 4 conversions for this spend and then explain what you can do to bring the cost-per-click down and the conversion rate up. You might set a slightly more ambitious KPI based on your experience and how you\u2019ve been able to optimize previous campaigns.<\/p>\n You could also ask your boss if they would be willing to increase the spend to \u00a32,500 in order to bring in 20 conversions they originally asked for. Linking the activity back to your SMART objectives will help you demonstrate the need for continued investment in digital marketing to drive results.<\/p>\n KPIs, and goals in general, need to be clearly understood by everyone involved. It\u2019s very easy for different people to have different interpretations of a goal even when it seems as unambiguous as a quantified KPI. Therefore all KPIs should be SMART:<\/p>\n These 5 factors are pretty self-explanatory (and covered in more detail in Dave Chaffey's article: How to define SMART marketing objectives<\/a>) so I won\u2019t explain each part. The key thing to understand is that you should never assume that the other party sees the KPIs the same way you do.<\/p>\n As an example \u201cI need you to double conversions\u201d could mean different things to different people. \u201cI need you to achieve a 100% increase in qualified conversions YoY by the end of quarter 4\u201d is a lot less open to interpretation. Ensuring your KPIs are SMART will save you a lot of bother down the line.<\/p>\n Setting and agreeing upon KPIs can sometimes require some negotiation skills. Like most negotiating you\u2019ll need to learn how to hold your nerve. It can be easy to agree to a figure you don\u2019t think you\u2019ll be able to achieve in order to end an awkward conversation and move on but this isn\u2019t the best course of action.<\/p>\n If you can argue your corner it\u2019ll pay off, for everyone, in the long run. Having to explain why you didn\u2019t meet a KPI (and why it was not realistic in the first place) isn\u2019t much fun. You\u2019re better off being able to say \u201cwe hit that KPI so let's now set a new one\u201d.<\/p>\n The person you\u2019re negotiating with may push you on the KPI so you will need to be prepared. In Roger Fisher and William L. Ury\u2019s book 'Getting to Yes: Negotiating Agreement Without Giving In' they suggest that adding in a new factor can help to break a deadlock in negotiations. Rather than both parties trying to move a single figure either up or down, you can introduce a new element that you both might be more inclined to adjust.<\/p>\n In this case, you might ask for more budget or more man-hours in order to hit the original KPI they asked for. Or you might suggest lowering a different KPI so that you can put more time and resource on this one.<\/p>\n SMART KPIs are a great way of detailing exactly what needs to be achieved but they can be hit or miss as you either deliver on them or you don\u2019t. A 98% increase in conversions when you\u2019ve agreed to a 100% increase could be seen as either \u201cnear enough\u201d or a complete failure depending on how reasonable you are. A good KPI prevents this from being an issue by having all parties agreeing on what is acceptable upfront.<\/p>\n A traffic light system can be used in Excel to measure KPI performance using boundaries<\/p>\n Not long after I first became an SEO Account Manager in my first agency I was given a new client who had agreed to KPIs with the salesperson who closed the sale. The salesperson was receiving a commission and therefore was happy to agree to\u00a0double\u00a0organic traffic to 6 geographic subfolders of the international site in 6 different languages within\u00a06 months of the campaign starting. This was not a realistic KPI particularly considering that one of the sections of the site was in Russian. I found it quite difficult to optimize the site in Russian and didn\u2019t really have time to learn a new alphabet.<\/p>\n Somehow, I achieved two-thirds of the impossible and managed to increase traffic for 4 out of 6 subfolders within 6 months. I was very pleased with myself but the client had promised their boss the impossible so as far as she was concerned I had failed completely.<\/p>\n Chances are you\u2019ll already be familiar with the RACE Framework which splits the customer journey into 4 main stages with recommended KPIs defined for each.<\/p>\n![\"RACE](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2023\/07\/RACE-dashboard.png\")
<\/p>\nSetting digital marketing KPIs<\/h3>\n
Which metrics should you measure in digital marketing?<\/h4>\n
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Which metrics should you not measure in digital marketing?<\/h4>\n
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![\"KPI-flowchart\"](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2017\/11\/KPI-flowchart.png\")
<\/a><\/p>\nHow to set channel-specific KPIs<\/h3>\n
6 channel-specific KPIs - e-commerce example<\/h3>\n
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![\"digital](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2017\/11\/channel-specific-digital-marketing-kpis.png\")
<\/a><\/p>\nTying budgets to digital marketing KPIs<\/h3>\n
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![\"smart-objectives\"](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2017\/11\/smart-objectives.jpg\")
<\/a><\/p>\nHow to negotiate your digital marketing KPIs<\/h3>\n
How to set KPI Boundaries<\/h3>\n
![\"traffic-light-excel\"](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2017\/11\/traffic-light-excel.png\")
<\/a><\/p>\nAligning KPIs to the RACE model<\/h3>\n
![\"Race](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2022\/11\/Race-Planning-Framework.png\")
<\/a><\/p>\n![\"digital](\"https:\/\/www.smartinsights.com\/wp-content\/uploads\/2017\/11\/r-a-c-e-kpis.png\")
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