In a way, digital marketing is like falling in love. You must always be asking: “What have you done for me lately?”
It’s not because this method for connecting with prospective customers isn’t trustworthy. It’s because you need to measure digital marketing to see if you are implementing the most effective strategies for your business.
You can’t just rely on how a digital marketing campaign feels from within your company. The only way you can determine if you are meeting your objectives is to track the quantitative data. Goals are only dreams if you can’t measure them within a specific time range.
But tracking marketing success is not as simple as just counting the number of new customers. Digital marketing campaigns are often complex, with many social media platforms, email, website pages, blogs, and other online tools to make connections with a target audience. It’s not easy to see what works — and what’s a waste of time and money.
So, how to measure digital marketing success precisely? This guide will provide you with the most effective strategies you can integrate into your business plans to track marketing performance.
The importance of tracking and measuring digital marketing efforts
Here are some reasons why you should consider scheduling the time to create and track marketing metrics:
- Efforts to measure digital marketing effectiveness will ensure you are reaching the specific target audience for your business.
- You will know when and how to pivot your strategies thanks to feedback gathered from data.
- Watching your metrics will help you save money in your marketing budget by focusing on advertisements and methods that work.
- Measurement saves time by showing you where to refine your message to connect to potential customers directly.
- Metrics help you create benchmarks that show true growth and overall return on investment.
How to track and analyze digital marketing metrics
The first step in achieving success with digital campaigns lies in setting specific goals early on — the narrower, the better. Once you have clear objectives, you can start measuring your performance toward achieving them with key performance indicators or KPIs.
Digital marketing KPIs are quantifiable measurements that provide targets for you and your team, helping you gauge progress and make better decisions. For instance, measuring attribution allows you to assess the value of steps in the customer journey and see which marketing initiatives are the most effective. When you take the time to track these metrics, you will be able to strategically invest in what works for growing your business.
To start tracking KPIs, you may want to set a few other things first:
Set up tracking tools and platforms
Look for ways to automate the process of tracking marketing metrics so you can accomplish more in less time. Thankfully, there are digital marketing tools and platforms that help to build this infrastructure.
Constant Contact, for example, has a ton of reporting and analytics tools built right into the platform — from basic campaign reach and engagement reporting to events, list growth, and even email heat mapping. And when it comes to your website, you can get your landing page metrics through Google Analytics.
Use analytics platforms to gain insights
Ensure you schedule time at least each quarter to check your marketing performance by logging on to your analytics platforms. When you look critically at the graphs and other data available and compare your marketing results with industry KPIs, you can gain a better understanding of what works — and why.
Create goals for your company to compare against the actual digital marketing KPIs. Make this a regular practice, and you’ll better comprehend any seasonality in your business and how to structure future campaigns.
Key metrics for measuring digital marketing success
All digital marketing channels that you plan to use within your comprehensive outreach strategy will have a way to measure success. Here are 10 digital marketing KPIs to keep in mind as you consider the best ways to connect with your potential customers.
1. Website traffic
One of the goals of digital marketing is to draw customers to your website, where you can help them continue the customer journey toward — if all goes well — a sale. Google Analytics is a convenient tool for this task, allowing you to track the metrics surrounding the traffic that comes in.
But while the overall views are worth analyzing, you’ll also want to look at the age and gender of the people visiting your site to determine if you’re reaching your target audience. Google Analytics tools can also help you identify the traffic sources, which is how a person found your website. This is important information if you want to allocate more of your budget to the platforms that are already driving traffic.
2. Conversion rate
It’s nice that people are visiting your website, but are these visits converting to sales? To calculate the conversion rate, divide the number of people who completed a sale by the total number of visitors to your website.
For example, let’s say you have 25,000 visitors over the month, thanks to a Google Ads campaign, and only made 750 sales. This is a conversion rate of 3%.
Ultimately, the higher the conversion rate, the more “bang for your buck” you get from your campaign.
3. Cost per acquisition (CPA)
The costs of a digital marketing strategy tend to pile up quickly, so it’s wise to keep an eye on the cost per acquisition (CPA) rate. Your CPA tells you what each new customer costs your company, and it helps you pivot if your marketing costs exceed what these customers spend on your products and services.
CPA is another metric that requires a little math: Take the total cost of your marketing campaign and divide it by the number of conversions.
Let’s say you have allocated $2,000 for sponsored posts on Instagram, which has brought you many new followers and even some free mentions by some influencers. But you’ve only seen five new sales, meaning each cost you $400.
Compare your CPA with industry standards and your product costs. Note that a higher CPA may not be bad if you’re selling expensive products or services.
4. Return on investment (ROI)
The return on investment (ROI), a measurement used to evaluate the results of your marketing campaign compared to the overall cost put into it, is a bigger-picture metric. While your CPA only focuses on the specific cost of your ads, ROI will also consider the costs of other methods and online tools like your website. You’ll want to track all your marketing costs for all your platforms and compare them to your revenue growth.
When considering how to measure digital marketing ROI, go beyond monthly marketing costs to get a broader perspective on the average time it takes to see results. Perhaps your campaign didn’t lead to new sales this month, but you gained 100 new email list subscribers. Those new followers of your social media accounts are also now in your sales funnel.
Your campaign with new demographic metrics may also have led you to better comprehend your target audience. This can help you in the future as you refine your plan.
5. Click-through rate (CTR)
Another common key performance indicator is the click-through rate or CTR. It references any digital campaign in which you have a link encouraging potential customers to click and go to a landing page.
CTR is important to measure as it is a direct indicator of how engaged your customers are with your digital marketing efforts. To calculate it, you’ll divide the total number of clicks by the total number of impressions, which is another way to describe the number of times people see your ad.
6. Bounce rate
Bounce rate, which is a term that describes when potential customers come to a landing page and then leave it without doing anything else, shows potential lost sales. This metric can show you when your website isn’t performing well and may be ready for an upgrade. The better your user engagement, the lower your bounce rate.
Google Analytics, which you can install with a simple code on your website’s backend, will track this for you.
7. Customer lifetime value (CLV)
Loyal customers are the ones that will help your business thrive, which is why it is a good idea to measure the customer lifetime value or CLV.
CLV is the value of a customer to the business over their lifetime. This is an essential KPI for companies that provide repeating services or product subscriptions, as it provides a more accurate overview of exactly what investments you’re getting a return on from your marketing efforts. For example, if your average customer only buys one item, your CLV will be much lower than if your average customers sign up for a monthly shipment.
To calculate the worth of your customers, you multiply the amount of money they spend over the year by the number of years you expect them to stay with you.
8. Social media engagement
Digital advertisements on social media can be costly, so measure social media performance from the start. The best KPIs for this will depend on the platform you’re focusing on.
For example, if you have a campaign on YouTube, you may want to track the total watch time and the total number of video views. If you have a Facebook campaign, don’t just look at the number of impressions. True engagement includes more comments, shares, likes, and clicked links.
9. Email open rate
The email open rate refers to the number of recipients who open your email. This metric indicates how well you engage with prospects and customers and helps you raise brand awareness. If your email open rate goes down over time, it may mean that your subject lines, headers, and topics may not be relevant to your target audience and could use improvement.
But one thing to keep in mind is that this metric isn’t always accurate. For example, Apple users can use their privacy preferences to hide whether they’ve opened emails. This means the email open rate may be less valuable than other metrics in tracking return on investment.
10. Search engine rankings
Finally, business owners implementing a digital marketing campaign will want to measure SEO results to ensure they are attracting more customers effectively. SEO, or search engine optimization, helps potential customers find businesses or ecommerce solutions near them to solve their problems and needs.
SEO is a strategy focused on improving how Google and other search engines rank websites on their result pages when customers search for products and services from their niche. You can measure your SEO by tracking your organic traffic to your website, keyword rankings, search engine ranking page visibility, and your website’s authority over time.
Strategies for improving digital marketing performance
Once you begin to measure digital marketing performance, you can implement more effective strategies to improve it. Here are the two essential ones to keep in mind:
Leverage data to optimize campaigns and strategies
You’re already well ahead of many business owners when you track your KPIs. However, the next step is to use the data from your measurements to improve your digital marketing campaigns and strategies.
Use critical thinking to determine why something isn’t working rather than just pulling the plug. For example, you may have a high bounce not because you are targeting the wrong audience but simply because your website takes too long to load.
Make data-driven decisions for better results
When you measure digital marketing, you can make more confident decisions. Instead of falling in love with cute sayings or ideas that may not resonate with your target audience, you’ll know what works and what doesn’t. If your numbers encourage you to change courses, do it.
Embrace data-driven insights for digital marketing success
To begin measuring your online marketing campaigns, work with your marketing team to identify your goal for the next quarter. Remember, goals should be SMART, which stands for specific, measurable, achievable, relevant, and time-bound.
Once you have a goal, you’ll likely be able to identify a KPI or two that can measure success. Stay realistic: It can take time to see the impacts of digital marketing, but tracking the numbers will help you see those impacts clearly.