Marketing is a must for any business. People can’t buy your products or services unless they are aware they exist, but that doesn’t mean every form of marketing is right for your business. How do you determine if your marketing plan is working?
Simple. Track the results.
The question then becomes, what should you track to judge the health of your marketing campaign? What will your number one indicator of campaign health, the key performance indicator or KPI, be?
KPIs vary based on the marketing objective, most of which fall into three buckets:
What you choose as your KPI will depend on the current state of your business and how you want it to grow, but here are the standard marketing KPIs many campaigns use.
Awareness campaigns get your name out there. They're more about getting people to identify your business exists than encouraging sales.
- Impressions/Views - this number indicates how many times your ads have been viewed. More views mean a higher chance someone will remember your brand or product. This is a good metric if your goal is to build brand awareness from the ground up.
- Reach – this is how many individuals view your ad. While it can be a KPI, note that it often takes a person more than one time to see an ad to remember it. As such, this is a common goal for short campaigns looking to spread news widely, such as event announcements, rather than building brand awareness.
- CPM – CPM stands for cost-per-milieu or cost-per-thousand. A CPM of $5 means that was the price for 1,000 views. The lower the CPM, the farther your marketing dollars stretch, and is a good KPI for brands who are looking to efficiently maintain awareness levels.
Consideration campaigns are those that encourage a consumer to check out a brand or product. These campaigns often focus on driving traffic to websites or interacting with a brand.
- Clicks—clicks are the raw count of how many people interact with an ad and are taken through to your website. This fills up the top portions of your sales funnel and brings customers into your sales environment. If you know your website converts well, this is a good KPI to aim for.
- CTR—CTR stands for click-through-rate. It shows how good a campaign is at driving traffic to your website. A poor CTR can be a waste of money and a sign that something needs to change—the location of your ad, its targeting, or the ad itself. As such, it's a good way to judge how effectively you drive consumers to a sales page.
- CPC—similar to CTR, this KPI represents how cheaply you can get someone to visit your site. It stands for cost-per-click. The lower the CPC, the more customers you can direct to your site for the same budget. If you're hoping to lower the cost of making a sale, this is a good KPI.
- Open Rate – unique to e-mail campaigns, this marketing KPI lets you know what portion of your e-mail list opens what you send them. It's a good metric to monitor interest in your content. You can also use the raw count of opens similarly to reach, allowing you to judge how many people see your campaign.
Conversion campaigns get a customer to take action. That action doesn't have to be a purchase; conversions can also be a subscription to an e-mail list or filling out a lead generation form.
- Conversions—the raw count of conversions a campaign results in. If you want to meet a sales or other volume goal, for example, have 200 leads a month, this is what you’ll want to track.
- CVR—an abbreviation of conversion rate, CVR is an efficiency-based KPI tracking how likely an ad is to make someone convert. The higher the CVR, the more convincing an ad is. It's a good KPI for when you want to optimize your sales process.
- ROI/ROAS - return-on-investment (ROI) or return-on-advertising-spend (ROAS) tells you how much profit your ad made. An ROI of $2.50 thus means that for every marketing dollar you spent, you made $2.50 back in sales. Many businesses have a ROAS goal they’d like to stay under, taking into account not just the money spent on a campaign but also other overhead costs.
- Cost per Conversion - for campaigns where the conversion is not a sale, cost per conversion can be calculated similarly to ROAS. As with ROAS, there should be a number your business aims to stay below. If the average e-mail subscriber results in $50 in sales, you don’t want to have a cost per conversion of $52.
Tracking these KPIs will give you a sense of how well a marketing campaign is doing. To that end, avoid tracking more than two KPIs at a time because they could be at odds. For example, ads with high CTR tend to also have a high CPM.
Marketing KPIs can also guide campaign optimizations. If searchers in California have a higher CTR than searchers in Colorado, consider putting more money into the California market. If ad B converts better than ad A, maybe it's time to pull ad A from the market. And if after several optimizations your KPIs are still not where you want them to be, it's time to reevaluate your marketing plan. Marketing KPIs will help you appraise and improve all of your marketing efforts, allowing you to grow your business efficiently. Select them wisely and check in often.