How To Successfully Identify Your Advertising KPIs

Advertising KPIs

Feeling overwhelmed by digital advertising metrics? No worries. 

 

We'll walk you through a step-by-step process to help you select which digital advertising metrics to focus on and why.

 

What are advertising metrics?

advertising report template

Dashthis’s advertising KPI report. See this template with your data. 

 

Treat advertising metrics as a measure of effectiveness for your campaign. 

 

Advertising KPIs track what’s going well in your campaign and what needs to change. You can make informed decisions on what to do next and explain the results to your clients or stakeholders based on the data.

 

Why track advertising metrics? They’re critical to helping you and your stakeholders:

 

  • Determine the return on investment (ROI) of your campaign for the business’s bottom line
  • Distill lessons learned from a campaign to inform future initiatives 
  • Shape marketing strategy for the next quarter
  • Help stakeholders communicate the efficiency of marketing and advertising efforts to their stakeholders. 

 

How to identify essential metrics to track

 

Marketing plays an essential role in driving results across the sales funnel both during and after COVID-19. A 2021 Criteo report among marketing leaders cited a greater need for marketing to drive sales for the business, retain existing customers and maintain brand engagement with their audience. 

 

At the same time, demonstrating the ROI of marketing activities like content marketing, SEO, paid ads or social media initiatives remains a crucial challenge for teams in 2022. 

 

How do you ensure you are tracking progress towards your marketing goals correctly? Here’s our step-by-step guide. 

 

Step 1: Look at your business goals 

 

Marketing goals and their corresponding digital advertising metrics depend on your business goals. 

 

Suppose one of your critical business goals is to increase your product’s number of users in a new market or for a new product line. In that case, marketing can focus on driving lead generation and conversions while optimizing marketing budget spending. 

 

These will be different if you focus on audience engagement and brand awareness. 

 

Once you understand your key business KPIs, you can align these business goals with your marketing goals. 

 

Step 2: Set SMART marketing goals 

 

We’re big fans of the SMART method (Specific, Measurable, Achievable, Realistic, and Timely) to make sure these goals are clear, aligned with your team, and achievable.

 

Let’s say one of your marketing goals is to improve the cost-efficiency of your digital advertising campaigns.

 

Using the SMART method: 

 

Increase cost efficiency of our regional digital advertising campaigns by increasing our ROAS by 15% by the next quarter by refining the marketing team’s keyword targeting and optimizing our campaign assets.

 

Step 3: Identify the proper advertising KPIs based on these marketing goals 

 

Operational marketing goals usually have clear-cut marketing metrics, like our ROAS example above. But ‌think through KPIs for strategic plans, as they may not be as apparent. 

 

Some examples of KPIs for key marketing goals: 

 

  • Brand awareness KPIs: Impressions, website traffic, page views from organic traffic, brand name mentions, LinkedIn engagement rates
  • Lead generation/sales KPIs: Conversions, cost-per-conversion, cost per lead (CPL), customer lifetime value

 

Top advertising metrics to track for an advertising campaign

 

1. Customer acquisition cost (CAC) 

 

How much are you spending across your marketing channels for these new customers? 

 

That’s where customer acquisition cost (CAC) (also known as cost per acquisition) measures.

 

CAC includes the amount of money you spend on sales and marketing activities to get a customer, including staff salaries, email marketing tools (for example), and other operational costs. 

 

Cost per acquisition is a crucial value to assess your business’s profit margins and determines financial health in the long run.

 

How to calculate CAC: total sales and marketing costs/number of new customers 

 

2. Conversions and conversion rate

 

cost per conversion

 

Conversion rate describes how many people did what your campaign wanted them to do. Also known as cost per action (CPA), this metric directly measures the effectiveness of your ad campaign. 

 

For digital ad campaigns, everyday conversion actions include: 

 

  • Filling in a contact form or sales consultation 
  • Downloading a content asset 
  • Signing up for a marketing newsletter

 

 

Calculation: Cost per conversion = Total cost of ads/number of conversions

 

Cost per conversion tracks how much these conversions cost you and shows how cost-effective your campaign has been. 

 

3. Clicks and Cost per click

 

 

Clicks act as your first point of contact between your digital marketing campaign and your target audience. It assesses if your ads resonate with your target audience and is a fundamental metric available in most digital advertising platforms. 

 

Cost per click (CPC) is the total amount you’re paying for these clicks, calculated by the total cost/number of clicks. Review your CPC metrics to see how cost-effective your campaign is. 

 

Tip: Clicks or cost-per-click metrics don’t tell you anything about traffic quality, so review other metrics to see how effective your campaigns are. Segment your clicks by keyword or region on Google Analytics. You can even look at the cost per conversion for a more detailed breakdown.

 

4. Impressions and Reach

 

Impressions tracking in our PPC dashboard report. Grab this template to follow your digital advertising campaign performance. 

 

Ideal for brand awareness initiatives or campaigns meant to be seen by a broad audience (think display ads or branded video content), these metrics tell how many people saw your ads.

 

Impressions measure how often your ad was displayed to your potential audience, whereas reach is the number of people who saw your ad. 

 

There’s a subtle difference. One person can see the same ad multiple times on social media platforms (reach), while an ad can show numerous times with no one taking action on it (impressions) 

 

How to calculate ad impressions: Also known as cost per mile (CPM), it measures the price for every 1000 impressions - 1000 multiplied by cost/impressions

 

5. Customer Lifetime Value (CLV)

 

Should you prioritize customer acquisition or customer retention efforts? Which customers should you focus on upselling or customer loyalty programs to encourage them to spend more? 

 

Customer lifetime value (CLV) provides the answers to these questions. 

 

CLV takes a longer-term view of your business’s financial status compared to other metrics. Using these metrics together helps you to inform your top-level goals and budgeting.

 

Tip: Combine CLV with customer acquisition cost to determine whether your campaigns turn a profit.

 

6. Quality score

 

 

Quality Score evaluates the journey a searcher has with your ad if they engage with your ad. It determines how relevant your ad messaging and website are to answering a searcher’s intent. You’ll see this vital metric in your PPC campaigns like Google Ads or Facebook ad campaigns.

 

Quality Score influences: 

 

  • The number of times your ads show in search engines
  • Ad position (and how visible your ads are) 
  • Ad rank
  • Average cost per click

 

Quality Score is one of the best indications of how strong your ads are and uncovers optimization opportunities if the score falls short. 

 

Grab this template to track your PPC metrics right away

 

7. Return on ad spend (ROAS)

 

 

ROAS measures the amount of revenue earned for every dollar spent on ad campaigns. It’s an essential indicator of the attribution of revenue to the marketing team and their effectiveness at driving business revenue and sales.

 

Benchmarks vary across industries, but you can use e-commerce company BigCommerce’s 4:1 ratio - meaning every $1 of ad spend must contribute $4 in business revenue as a starting point. 

 

Calculation: ROAS = Revenue attributable to ads / Cost of ads

 

8. Click-through-rate

 

 

Clickthrough rate (CTR) answers a vital question: how many people took action upon seeing your ad? 

 

It measures ad performance and how well your ads match your target keywords in digital advertising campaigns. This essential PPC campaign metric affects quality scores, which can have a real-time impact on your campaign conversion rates and marketing efforts.

 

Calculation: CTR: = clicks ÷ number of impressions

 

9. Bounce rate

 

 

Landing pages are a vital component of your digital advertising campaigns, and how effective they capture attention and drive conversions. 

 

Here’s where bounce rate comes in. Bounce rate measures the percentage of people who leave your post-click campaign landing page (with a form, for example) without clicking on anything. 

 

A high bounce rate can mean: 

 

  • Your webpage content doesn’t match what your visitors look for
  • Your form is confusing or too long
  • Your page loads too slowly (or there are technical issues) 
  • Your campaign is attracting the wrong traffic 

How to create an advertising metrics template with DashThis

 

Step 1: Sign up for an account with DashThis (your first 15 days are on us!)

 

Step 2: Connect your favorite marketing tools in seconds (we support over 40 integrations with top-rated marketing and advertising tools 

 

 

Step 3: Select the advertising metrics you wish to track from DashThis’ preset widgets 

 

 

Step 4: Drag and drop as many metrics you desire to create your digital advertising metrics template! 

 

Sign up for your free 15-day trial of DashThis today.

 

Automate the monitoring of your digital advertising metrics with DashThis. 

 

Now that you know which advertising metrics to track, present these metrics in seconds with an automated tool like DashThis.

 

Sign up for your free 15-day trial to automate your PPC reporting in a visually-pleasing format that’s sharable with your team. It’s time to ace that next report to your clients or key stakeholders. 

 

Track all your marketing KPIs in not time with automated reports!

 

Try DashThis for free
Brian Ahle

Brian has been in the SEO/SEM industry since 2010, working on analysis and execution for some of the biggest sites in Denmark and the rest of Europe, both E-commerce and lead generation. He is the founder and partner of Searchmind, one of the leading SEO/SEM agencies in Denmark.

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