The average consumer is spending more time on the Internet than it has ever before as a means to interact with brands and organizations. The role of a digital marketer is to get as many eyes as possible on their brands. So, how can a digital marketer measure when specific strategies are actually driving results and value?
Reviewing Key Performance Indicators (KPI) after a campaign can give business leaders insight into the overall performance of their marketing strategy. But which KPIs are digital marketers supposed to track? Below, you will find 4 recommended KPIs to take into consideration when measuring the success rate of a marketing campaign.
Looking over the return on investment (ROI) helps answer the most important question: “Is the company’s digital marketing efforts worth it?” This can be hard to answer. Online marketing efforts need to be traceable to new sales. The following equation can help businesses determine the answer:
Total Cost of Digital Marketing
Total Revenue Attributed to Digital Marketing - Total Cost of Digital Marketing
Once businesses know their digital marketing ROI, they can determine which efforts are worth it, and which campaigns need to be ended. Once you understand which campaigns outperform their cost, you can focus your efforts in those areas to make sure you’re setting yourself up for success each time you launch a new campaign.
Business websites and e-commerce pages are made available to consumers at all times, no matter what time or which day of the week it is. Additionally, social media and digital advertising campaigns are constantly bringing individuals through the sales funnel. However, once a potential customer lands on a product page, they may not browse very long, or even buy anything. That’s when the following website conversion rate equation becomes interesting.
Total Website Visitors
Form Submissions + Tracked Calls + Tracked Email
Even though an effective digital marketing advertisement may lead a potential consumer to your website, that doesn’t always mean it will convert into a sale. However, businesses tracking website conversion rates can get a better understanding of whether a campaign is successfully transforming new customer visits into concrete sales.
Individual users who are brought to a business website through a digital campaign has a cost associated with them. The first cost is a “lead” cost. Campaigns need to keep the cost per lead low to maintain profitable margins throughout the campaign.
Cost Per Lead
Total Spent on Campaign / Total Number of Leads
The cost per lead should be calculated for all digital marketing efforts. From website banners to individual social media campaigns, companies who track their cost per lead for each digital campaign can see which program is most profitable and make the right investment choices.
The second cost associated with individuals is revenue cost. A lead from a digital marketing promotion has a sales value associated with them. By using the revenue per lead equation, businesses can predict future sales on forecasted traffic and conversion leads.
Revenue Per Lead
Total Attributable Revenue / Total Number of Leads
Similar to the cost per lead equation, revenue per lead should be calculated for every source a company uses for digital marketing. Both cost and revenue numbers help marketing departments understand the costs associated with each different online platform they are using. An overview of all the company’s digital marketing campaigns can give managers insight as to where the most profitable leads originated from, for future reinvestment decisions.
Digital marketing managers can use the number of sales generated by online campaigns to justify additional investments and allocate these investments in the right types of programs. The following equation allows digital marketers to upsell their digital campaign ideas to important internal business decision makers.
% of sales from digital marketing
Total Revenue Attributed from Digital / Total Monthly Sales
Digital marketing campaigns are quickly becoming a larger part of a company’s marketing efforts. As more consumers interact with businesses through their websites and social media channels, marketing managers have a chance to collect insightful data. When measuring a successful digital promotion, businesses need to track the return on investment, website conversion rate, customer acquisition costs and percentage of sales from digital marketing. All of this data will help with determining future costs and promotion tactics.
Of course, many other KPIs can be tracked for specific information and a better analysis of your marketing campaigns, marketing metrics such as click-through rate, customer lifetime value, organic traffic, bounce rate, cost per click, and page views can all help you understand how your marketing strategies are performing, if you need to modify your landing pages, your ads, or your audience to gather more qualified leads.
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