As we’ve discussed before, marketers are shifting their focus away from rigid (and sometimes misleading) ad metrics and towards measuring business outcomes. This amounts to a more holistic approach, a way of zooming out and asking simply – did the business make more money during a particular time period or not? In this way, marketers avoid getting mired in data, instead focusing on the big picture.
So how does this translate to the overwhelming number of digital marketing metrics at our fingertips, available on web analytics platforms like Google Analytics? In this blog, we hope to clear the air and make measuring the success of your digital campaigns a little easier (and more accurate).
Digital Marketing ROI: Setting Up Your Strategy
No matter what type of campaign you’re running – whether paid, organic, or social media – monitoring your success requires planning up front. Prior to launching into a campaign, make sure to set goals, then determine KPI’s to measure them.
1. Set specific, measurable goals.
In other words, decide what you want your campaign to accomplish. What do you want users to do? Sign up for a mailing list or free demo? Share your social media posts? Make a purchase? Get specific – maybe you want to get a certain number of mailing list sign-ups in a given timeframe or hit a particular conversion rate by a certain date.
Determining if and how the goals of a particular marketing campaign align with your business objectives will help you determine what kind of campaign you should be driving, and what kinds of KPI’s to set up in order to figure out whether you’re doing what you set out to do. For example, if your goal is increased sales, a lead generation campaign based on blog content won’t get you very far.
2. Set up relevant KPI’s.
Once you’ve established your goals, determine which KPI’s will help you see how you’re doing. We’ll go into more detail about which KPI’s best fit which kinds of campaigns. But as a general rule, you can ask yourself the following questions from Hootsuite to help narrow down the most appropriate metrics:
- Does it align with my goals?
- Does it help me make decisions about the future of my strategy?
- Do I have the ability to actually measure it?
If your goal is conversions, for example, focus on metrics like conversion rates or cost per conversion. Define conversion – maybe it’s landing on a “Thank You” page after signing up for a free trial – and then track that behavior. At Bloom Ads, we use tags and pixels – bits of code strategically embedded into your site – to generate 1st party data you can use to track target actions so you have a fully hands-on approach to performance monitoring.
How to Calculate ROI: Revenue / Cost
Your digital marketing ROI is simply the amount of revenue your business gains for every dollar spent on marketing. As such, the specific variables will differ slightly depending on whether you’re calculating ROI for paid search, content marketing, or social media.
The most common way to calculate ROI for a marketing campaign is to divide the total revenue gained by your total marketing costs for that campaign. If the resulting number is greater than 1, you have a positive ROI – a net profit. If not, you probably need to tweak your strategy.
Choosing Metrics for Digital Marketing ROI
If you’re investing in paid search, you need to be able to track conversions with precision. First, that means clearly defining what conversion means to your campaign – again, do you want leads, sales/purchases, or something else? Then, set up metrics that will track that behavior.
At the very least, consider tracking the following key paid search metrics:
- Quality Score – Quality Score determines your ad ranking and, importantly, how much you pay per click (PPC). If your keyword relevance is too low, your quality score will decrease and your PPC rate will increase, hurting your pocket.
- Click-Through-Rate (CTR) – CTR measures how many people are actually clicking on the ad and going through to your landing page. It’s an important measure because it affects your quality score.
- Conversion Rate – The rate at which users actually fulfil the conversion action you want them to take tells you a lot about the intent of the users who are being exposed to your ads.
- Cost-Per-Conversion – Cost-per-conversion gives you an idea of how much you’re actually spending on each lead or sale. If it costs you more to get the conversion than you make from the lead or sale, you’ve lost money on the customer.
By aggregating these metrics, you get an idea of what you’re spending on each ad vs. the effectiveness of those ads on your target audience.
SEO and Content Marketing
Organic search is a long-term form of marketing that can often take lots of time and calibration to bear fruit. In some ways, measuring content and SEO performance can be less scientific than with paid search – but it can absolutely be done. Again, the idea is to set measurable goals that are aligned with business objectives.
We’ll go over a few useful KPI’s for SEO and different types of content below.
- SEO Metrics – SEO is about ranking as high as possible on organic search engine results pages. Some things you’ll want to measure are keyword rankings for particular pages or page types (like your blog), website visits, page speed, and bounce rates.
- Blog Content – Many of the same metrics apply, such as website visits and bounce rates. Blogs have notoriously high bounce rates, so if this is the case for your blog, it may not be a red flag. It can be useful to focus instead on something like time spent on page, which gives you an idea of whether users are actually reading your blogs through to the end (i.e. engaging with your content). You’ll also want to look at specific web traffic analytics to see how people are finding your page.
- Case Studies and White Papers – In addition to web traffic analytics and time spent on page, consider looking at shares and engagement and brand mentions (are other people linking to your case study or featuring you in the media)?
- Podcasts – Look at new subscribers, downloads, and listening lengths to see how many people are finding and engaging with you vs. when and where people are losing interest.
- Webinars – Like with podcasts, you need to see how many people are making first contact vs. staying engaged. Measure registrations against actual attendees, then measure drop-offs to see where you’re losing people.
Just like with Google Ads and Google Analytics, social media analytics platforms offer a staggering number of metrics that can all seem equally mystifying. It can be difficult to interpret how post shares and brand mentions relate to your actual revenue.
People often talk about the “vanity” metrics of social media monitoring – basically, any metrics that don’t actually align with your objectives. For a sales campaign, for example, a high click-through rate might not be very valuable, since it shows that you have lots of traffic but not necessarily lots of purchases.
To avoid relying on vanity metrics, first note that social media might be contributing to business outcomes in an indirect way, rather than straight into your pocket. After all, most users aren’t logging onto Facebook to go shopping. Once again, it’s crucial to determine what you want to get out of your social media presence and then measure that.
Hootsuite breaks down social media metrics roughly into four types of campaigns:
- Awareness Metrics – How many people are you reaching with your posts? Consider tracking audience growth rate and post reach.
- Engagement Metrics – It’s one thing to reach someone, but how many users are actually responding? This is where “applause” metrics such as likes come in, as well as virality rate (post shares).
- Conversion Metrics – These include metrics mentioned above, such as conversion rates, bounce rates, and cost-per-click (CPC) .
- Customer Metrics – What are customers actually saying about you? Social media is a hotbed of mentions and reviews where you can gauge customer sentiment.
Results-Driven Digital Marketing