Digital Marketing has been disrupting the Marketing ecosystem since the early 90s. It has also been a great addition in helping to revolutionize the way products and services are being promoted to their target audiences. How to choose the right KPIs can make you save a lot of money.
With the evolution of search engines like Yahoo and Google, the rise of social media sites like Facebook and Twitter – to name a few, the demand to shift from offline to online, not completely but to be present on both sides of the spectrum at least has heightened as well. These events served as a catalyst and pushed everyone to adapt and evolve, giving birth to Digital Marketing Agencies who are helping brands achieve their company objectives by taking advantage of the platform’s power.
For starters, Digital Marketing is an additional media for brands which gives them the ability to be present where their target market is at a given moment. Digital Marketing gurus refer to this as “micro-moments”.
Being present where you should be at the right time is crucial. Knowing the right materials to promote, right ways to communicate your message, and all other technical and strategical aspects of online marketing efforts should be taken into consideration as people are consuming content at a fast rate nowadays.
Defining your Business Objective and What Key Performance Indicators (KPIs) to look at
With all these things in mind, assessing and measuring the success of your marketing efforts is just as crucial. Since it is a little too overwhelming to know how you’re performing in your digital activations with all the data available, you should be looking at the correct Key Performance Indicator in order to derive significant results from your campaign. Say, for instance, you are launching a brand online – audiences are yet to be aware of your existence online.
After the campaign activation, it is illogical to be expecting tons and tons of sales/revenue as your target audiences are still at the upper funnel (Awareness) and you are exerting efforts to get them aware of your brand and push them down to eventually becoming a Purchaser – or even to the lowest funnel, Loyalty. And when your brand has been present online for a while now – with correct targeting and optimizations to deliver results – you should see more revenues than your costs otherwise, there is a need to restructure your implementation.
However, many practitioners of the media still don’t understand how it works and which Key Performance Indicators (KPIs) they should be looking at in order to assess the results of their marketing efforts online properly. Prior to implementing any marketing strategy online, you need to have a solid business objective and a clear path on how you plan to achieve it.
“What do I want to get in return?”, “What do I want to gain after this?”, “How do I plan to make this sustainable for the business?”, and so much more. These are just a few questions that could guide you in determining the most appropriate Business Objective for your business and how you would measure its success using the right Key Performance Indicators (KPIs).
The importance of the Awareness Campaign
The challenge to introduce a new brand and raise massive awareness online requires a lot of investments. Time, money, brainstorming of ideas, etc. in order to come up with the best strategies to achieve the goal. And having your eyes stocked to the number of sales you are getting from your paid ads will only give you frustrations.
In order to evaluate your campaign and know whether it is a success or not, try to look at the following metrics:
- A high number of Reach and Low Cost per Reach:
A great number of people your ads have reached would be good if you’re goal is raising awareness. This would indicate that you spent the money in reaching as many people with the given budget, thus having a low Cost per Reach.
- Low Cost per Mile:
The amount you pay for every 1000 times your ads were served. Having a low Cost per Mile would mean that the channel you served your ads with is cheaper.
Consideration matter even more
Marketing doesn’t end after raising awareness of your brand. Pushing audiences down the sales funnel would also require strategic efforts. With your ability to retarget the audiences whom you have engaged with your brand awareness campaign, you should be looking at different KPIs this time.
- High Click-through Rate, Low Cost per Click
A high Click-through Rate would mean that your ads are very engaging that people who would see it, will most likely click on it. This could also lower your Cost per Click, which is a good sign because you’re getting clicks at a low rate and eventually getting the best out of your budget.
- A significant number of Visits (to the site), Low Bounce Rate :
Seeing a significant amount of website traffic after people clicked on your ad would be good for you because this implies that they are in the Consideration stage already. It’s one thing that they’re visiting your website and getting curious about what your brand has to offer but it’s also important to have a low percentage of the people who didn’t wait for the page to load after clicking on the ads (Bounce Rate).
Let’s take a look at the conversion step
As you go further down the funnel, costs get crazier and crazier. That’s why there is the need to have enough audience size for you to expect good returns on your investments, otherwise, your efforts in building your audiences online would go to waste.
- Cost-Income Ratio: This efficiency metric is the most important one to look at when you’re in the conversions funnel already. This ratio indicates how much money you need to spend in order to get 100 revenue in return. The lower the ratio, the better.
- Conversion Rate Another metric to look at is the quality of the audiences you have been retargeting. Does a single visit from one of the audiences enough to convert into a purchase? Conversion rate refers to how aggressive the audiences are in terms of purchasing. So, the higher this ratio is, the better.
Note that as you go down the funnel, audience size gets smaller and the quality is getting richer. Getting them to act is more expensive than people who are still in the upper funnel. Hence, cost dependent on the audience base you are targeting.
Overall, think of the KPIs as your guide whether or not you’re realizing the goals you’ve set for your business. Knowing the right KPI would tell you if the number of clicks you’re getting from a Traffic campaign is translating into a website traffic efficiently with high Click-Through Rate (percentage of people who clicked on the ads after seeing them) and low Bounce Rate (fraction of people who clicked on the ads and did not wait for the landing page to load).
This means that your executions are attractive enough and being served to the right audiences who have intent in taking valuable action which can move them down the sales funnel.
Since the Digital world is constantly evolving, it is important to stay competitive and innovative to get along with all these overwhelming changes.
Whether launching a profit-oriented campaign, or a promotion mainly focused on increasing brand awareness across the market, it is important to stick to the correct data and know which to look at for you to be able to assess how well your performance is and identify any rooms for improvements which you can apply on your further campaign activations.
Justine Jake Silvestre