What is a KPI? A Key Performance Indicator is a metric used to measure the effectiveness and success of a marketing action. It's important to choose the right KPIs and track them regularly so you can make informed decisions and stay on course toward your goals.
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In this article, we'll walk you through the most relevant KPIs to monitor so you can better understand the performance of your digital marketing campaigns.
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Conversion
- CPA (Cost Per Action)
This metric measures the cost incurred to generate an action. It equals the total campaign cost divided by the number of conversions. Depending on your goal, a conversion can be a sale, a subscription, an add-to-cart, a like...
Our tip: define your target CPA before launching a campaign so you can set your budget more accurately. It should reflect the maximum amount you're willing to spend to obtain one conversion.
- ROAS (Return On Ad Spend)
As the name suggests, ROAS measures your campaign's effectiveness in terms of return on investment. It's calculated by dividing the total revenue generated by the total amount spent. For example, if your campaign cost $100 and generated $500 in revenue, your ROAS is 5.
- Add-to-cart events
If you run an e-commerce store, this KPI deserves close attention. It's especially useful to look at add-to-cart events on campaigns that aren't generating conversions. If your audience isn't buying but is adding items to their cart, it means they're interested in your offer but something is holding them back at the decision stage.
Our tip: address that friction point with a decisive message through a retargeting campaign to convert cart abandoners into customers.
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Traffic
- Outbound link clicks
This metric tells you how many users clicked a link redirecting them to your website. It can be used to calculate your conversion rate by dividing conversions by the number of outbound clicks.
Our tip: alongside this KPI, also look at landing page views to know the exact number of users who actually landed on your page.
- CTR (Click-Through Rate)
CTR is calculated by dividing the number of clicks on an ad by the number of times it was served. It reflects how compelling your ad is to your audience. Use it to determine which ads or ad formats resonate most with the people you're targeting.
- CPC (Cost Per Click)
This metric represents the cost paid for each click on an ad. It tells you how much each visit to your site is costing you. It's especially important to monitor on paid search campaigns. CPCs can vary based on your Quality Score, competitive pressure in your market, or your bidding strategy.
Our tips if your CPCs are rising:
- Optimize your ads, make sure they are high quality and include the keywords you're bidding on.
- Target more specific keywords with less competition.
- Test different ads to find the ones that perform best at a lower cost.
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Delivery
- CPM (Cost Per Thousand)
This KPI represents the cost paid for 1,000 impressions. CPM lets you compare delivery costs across different ad platforms and adjust your budget accordingly. Note that CPM can vary based on the targeted country, competition level, or audience size.
- 100% video views
This KPI measures how many users watched a video ad all the way through. Tracking it helps you identify which videos hold your audience's attention the longest, so you can refine your video content strategy.
- Impressions & reach
Impressions are the total number of times your ad was served, while reach represents the unique users who saw it. For example, if your impressions are 100 and your reach is 50, it means 50 unique users each saw your ad twice.
Our tip: monitor your ad frequency to avoid ad fatigue. We recommend a maximum of 6 exposures per week for retargeting campaigns.
In conclusion
KPIs are essential for analyzing and steering your campaign performance.
To avoid getting lost in the numbers, focus on the indicators that are most relevant to your objectives and use them to make the right decisions.
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Want expert support for your digital marketing strategy? Don't hesitate to reach out!
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