Digital Marketing can be overwhelming & messy if you’re not carefully measuring the right metrics.
When Digital Marketing first became a talking point in my country, an acquaintance of mine made quite a bit of money by latching on to that opportunity.
Back then, it was only about social media advertisement and search engine marketing. Many companies had no idea how to read digital marketing analytics but they wanted to use that as a tool.
That guy formed his company and sold two vanity metrics to these companies — “How many likes your post/page is getting” and “How many people you are reaching”.
Companies that were used to handling TV, press, and outdoor ads saw even those metrics as a win. Of course, they didn’t know the full potential of digital marketing analytics. They didn’t know that they were just scratching the surface.
Times have changed. (That guy closed shop almost a decade ago). In today’s world, there’s no lack of digital marketing metrics to measure.
You can even say that there are too many metrics to measure. And you wouldn’t be wrong.
The big question is — Which ones should be on your dashboard?
Source of Web Traffic
Web Traffic sources show you from where you are getting your audience. Are they coming from a social media, search engine, another website, a QR code o something else?
By understanding your source, you start gauging how effective your marketing campaigns are, how much dependent you are on paid campaigns and if there are any 3rd party sources generating traffic for your (indicating brand strength or good PR).
Engagement by First Visit
Engagement by the first visit indicates whether the people you are bringing in are doing what aids your business. The engagement depends on your business completely. For a blog, it’s about reading an article or maybe subscribing to a mail list. For an e-commerce site, engagement can be about registering as a customer or purchasing something.
For the first visit, you’d likely want them to take any action that’d allow you to bring them back through retargeting ads or email marketing.
Returning visitors are users who come back to your website multiple times. It’s a good way to check how successful you are in retaining users.
Within these returning visitors, you can classify them into subgroups —
- Users with 2–4 visits, 5–9 visits, and 10+ visits
- Average page per session
- Average time on site
- Average conversion compared to new users
Unique visitors show whether the total number of people visiting your site is increasing. It helps you understand if you need to spend more on top of the funnel activities or whether you’re generating enough traffic as of now.
Bounce rate is the percentage of visitors that enter your site and leave without visiting an additional page. Or in other words, they leave your site after just going through one page.
It’s usually high for blogs as most users just read an article and leave. For e-commerce, it should be lower as your product portfolio should be on different pages.
Pageviews per session
Pageviews per session show how engaged your audience is with your website. You can imagine that for a site like Amazon, which is optimized to keep you within it for longer, pageviews per session will be higher than most sites.
Depending on the type of your site, high page views per session can be a bad thing. If you have an efficient site with a minimal number of products, high page views may indicate consumer confusion, lack of useful information, or too long a funnel.
Ultimately, one of your key objectives should be to bring audiences to your website, app, or store. Click-through rate is understanding what percentage of your audience is clicking on your ads to get to your digital assets.
Leads help your team measure the effectiveness of your marketing campaigns. You can track the total number of leads that have been generated over time, assign a value to each of the leads and then if your marketing expenses can be just calculateified.
Cost Per Lead
By comparing your marketing expense with the number of leads, you will get the cost per lead. Over time, it will give you a direction to be more efficient with marketing spending. If you have access to industry standards, that standard can guide you towards marketing efficiency as well.
The purchase funnel varies from company to company. Depending on your business, the details can vary. But in general, it should have top-of-the-funnel activities like awareness generation, and then increasing consideration among those, and converting them into revenue generation.
After that, it’s about retaining those paying customers and converting them into referrers of your products.
Funnel Conversion Rate
The marketing funnel helps you divide your marketing activities into stages. It also shows you where you should focus. For example, maybe people are considering your product but not purchasing it. It can be because of your pricing, website complexity, or some minor issues that you should be able to solve. It’s different when you see that your awareness is low. Then your focus should be on generating awareness.
The funnel conversion rate shows what percentage of audiences is moving to the next step. If you have a low conversion rate in one stage, you know where you need to focus.
Goal Completion Rate
The goal completion rate is a very specific metric. For each of your campaigns, you’d have a specific goal. This shows how effective you are in reaching that.
Modern social media and search engine marketing allow you to connect goals with campaigns. It gives you an estimate on your Return on Advertisement Spend (ROAS) as well.
Marketing Originated Customers
Marketing originated customers are the group that came to your business through direct marketing. Over time, PR and brand image should start bringing more people over to marketing. Till then, this metric will help you plan your performance marketing budget.
Customer Acquisition Cost
Simply put, Customer Acquisition Cost is the amount of money you’d spend to make someone a consumer paying.
Customer Lifetime Value
Customer Lifetime Value is the estimated total revenue/profit a business can expect from a customer throughout their business relationship.
There are multiple ways of calculating it including a complex one with churn rate, average gross margin per consumer, and discount rate.
Lifetime Value: Customer Acquisition Cost (LTV: CAC)
Without this ratio, LTV doesn’t make full sense. This helps you understand if you are making more than you are spending to acquire a consumer.
In today’s world, where acquisition is often prioritized over profitability, this metric will keep your business alive even during bad times.
Return on Marketing Investment
Lastly, the return on marketing investment is a straightforward one. Return on Investment comes in two forms. CAC is a type of ROI that shows how much expense is required to get one customer. Similarly, you can connect ROI with revenue to see how much revenue each marketing dollar is generating.