Measuring digital campaign performance has come a long way since the days when, as Ad Age notes, nineteenth century merchant John Wanamaker declared, "Half my advertising is wasted; I just don't know which half." These days, digital tools exist to give you the information you need to optimize your campaign performance — if you know where to find them.
Users are exposed to an overwhelming amount of information each day, so they have become very selective about what they'll click on and when. They'll only pay attention to a message if it's intrinsically valuable to them. To determine if your message is reaching the right audience, you'll first need to determine your objectives, then marry them to the right metrics. Here are 10 metrics to help you decide what's working and what needs to be retooled or dropped.
1. Traffic Generation
Measuring the traffic to your main website is an important tool for gauging the effectiveness of your search engine optimization (SEO), but you can get more detailed measurements by looking at landing pages for individual pay-per-click (PPC) campaigns. The number of visits to your site will give you a bird's-eye view of how well your campaign is driving traffic. If your campaign is healthy, these visits should steadily build. If they don't, you'll need to review your individual marketing channels and adjust what's not working.
2. Who Is Visiting?
Most analytics tools allow you to measure the total number of new sessions, so you can see how many of your visitors are new and how many are returning. This will show your effectiveness in reaching and engaging customers. If you're not attracting new visitors, you may need to make adjustments to your strategy at the top of the funnel. If your bounce rate is high — meaning that visitors leave without interacting with your site — you may need to review your relevance to your target customer and adjust your outreach efforts. The longer users stay on your site, the more likely they are to convert.
3. Who Is Coming Back?
Most businesses can measure customer retention rate simply by looking at the number of repeat customers. This metric is affected by elements like how engaging and relevant your site is to your customer; the freshness of your content; and design elements such as ease of navigation, contact information, FAQs and consistent branding. If users travel through your website but don't return, you may need to look at elements such as overall website design and relevance, keyword use (if the visits were organic) and final sales strategy. The rate of return to your site helps you determine whether you need to improve your content to make it more enticing to users. Engaged users are more likely to return — and convert.
4. Where Are They Coming From?
Google Analytics has an acquisition section that shows you where your visitors are originating from, which is a useful metric for determining which channels are performing well and which aren't. High organic results indicate that your SEO is strong because people are visiting your site after performing a search. High social traffic is indicative of your social media advertising and presence. External results will show you how effectively your brand is being mentioned on third-party sites. Mobile visits will show you how well you're engaging mobile and smartphone users.
5. Click-Thru Rate
The traditional measurement of key performance indicators (KPI) has been click-thru rates (CTRs), largely from display advertising. But as AdExchanger notes, display ads have a notoriously low CTR. This is understandable. Inherent in banner ads is the expectation that users will stop what they're doing and click on your link. But a direct response metric doesn't factor in that exposure may prompt users to search for you later. Therefore, CTR should be used in combination with other metrics for a more accurate determination of banner ad effectiveness.
6. Conversion Rate
Ultimately, measuring conversions is one of the most important metrics you need to track. But a conversion does not necessarily mean a sale. Conversion goals can include increasing interactivity or generating leads by filling out a form or commenting. You can set up a goal in your analytics toolbox and measure these conversions. If your conversion rates are low, you'll need to assess aspects of your website, including design, navigation, relevance, engagement potential and the checkout process.
7. Cost Per Click
Cost per click (CPC) is calculated by dividing the total cost of clicks on your ad by the total number of clicks. The cost of each click is determined by the value of the keywords you bid on. If your CPC is high in relation to conversions, you'll need to review your keywords and adjust them to see which ones work and which don't. You can use your analytics program to guide you.
8. Cost Per Lead
Cost per lead (CPL) offers more detailed insights into the effectiveness of specific marketing channels. Compare the average monthly cost of a PPC campaign, for example, to the total number of leads generated to determine the value of your campaign. If you spend $1,000 on your PPC campaign and 10 users convert to leads, your cost per lead is $100. If this is too high in comparison to the cost of your product or service — $100 per lead has a different value for a business selling luxury cars than for a toy store — you know you'll need to adjust your PPC campaign accordingly.
9. Social Metrics
Social is primarily about exposure and is measured by interactivity or "mentions." For example, if your campaign generates a million new followers but few are interacting, sharing or retweeting, then your campaign can't be considered a success. Social metrics should include new followers, comments, likes, retweets, channel views, bounces and subscribers, as relevant to your social media platform. When it comes to social, your growth rate is a more important metric.
10. Putting It All Together
Measuring the ROI for digital marketing campaigns can be complicated and confusing. While different marketing channels have different objectives, depending upon your goals and where your customer is in the sales funnel, calculating the ROI for individual channels gives you better insights into which of your campaigns are driving conversions and sales and which areas need to be revised or dropped.
However, in general, ROI can be calculated by dividing customer acquisition cost (CAC) against average customer value — that is, the amount a customer spends on your product or service. If CAC is $100 and each new customer spends more than $100, your ROI is positive. If not, you'll need to assess your individual campaigns to identify what's not working.
Given the amount of information served up to users each day and the increase of user-driven content, measuring digital campaign performance can seem like an overwhelming task. But by using the digital marketing tools available to you and using the right metric for each campaign, you can combine each result to get detailed, actionable insights in a well-rounded and informative report that can help shape future digital campaigns.