One of the key reasons that marketers focus campaign efforts on digital strategies is that they are highly measurable. In today’s landscape, marketing leaders are expected to demonstrate the impact that each campaign, tool, etc., has on ROI, or risk budget cuts. With this is mind, marketers value measurable tactics that allow them to easily demonstrate where they are seeing success and what is underperforming that must be optimized.
Marketers rely on campaign insights that assist in filling in details about the consumer’s path to purchase. These insights may show that a customer clicked on a link in a social post that led to them to sign up for emails on the blog, ultimately leading to a conversion after being offered a discount code or promotion. With insight illuminating exactly where the consumer clicked, what they read, etc., before converting, marketing teams can focus on creating similarly useful and attractive experiences.
Common Marketing Metrics Defined
As marketers seek to understand and act upon all of the various digital metrics available for their optimization efforts, they must understand what each number represents and what role it plays in the customer journey.
There are many digital measurement platforms, each of which records different metrics. However, there are a few measurements that are commonly used across campaigns that marketers should be aware of. We have pulled a few of these key metric definitions, as well as terms that help define and determine KPIs, from our Marketing Dictionary for reference.
Impact Measurements: Impact measurements are the metrics to which marketers refer to understand their progress towards a key goal. These measurements look beyond basic information to understand how marketing is affecting bottom line, or how efforts are shaping the customer journey, etc.
Impact Data: This refers to KPIs such as sales, brand awareness, downloads, etc.
Gross Rating Point (GRP): The GRP represents 1 percent of the target market reached. If a campaign has 5 GRPs, it is reaching 5 percent of the target audience being measured. GRP is often determined by multiplying the reach of an ad or campaign by the frequency of ad exposure.
Bounce Rate: Bounce rate refers to when visitors leave a website after only viewing one page. A high bounce rate is typically negative, as marketing teams want to move consumers from discovery pages, such as blog posts, to converting pages.
Churn Rate: Churn refers to customer loss. Thus, churn rate measures how many customers have left your brand or organization over a given period of time.
Click Through Rate (CTR): Click through rate measures the ratio of how many people will click on an ad when they see it. This is done by dividing the clicks on the ad by the number of times the ad is shown.
Cost Per Click (CPC): This is an important metric for determining the ROI for an ad. CPC measures how much it costs to earn each click on an ad. If an ad is shown 100 times for $1 per showing, and only 1 person clicks it, the brand is paying $100 per click, which means the ad may not be worth the spend.
Cost Per Thousand (CPM): This is a ratio determined by measuring the cost of reaching 1,000 people.
Impressions: In digital marketing impressions refer to how many times and ad or message was displayed, regardless of whether it was displayed to unique or repeat consumers.
Cost Per Impression (CPI): The cost amount an advertiser pays for each impression in an online campaign.
Leveraging Metrics that Give the Right Information
Above are the types of metrics that marketers will often encounter when running digital campaigns. However, just because these are common does not mean they are necessarily providing the right insights by which to make optimizations. Take click through rate for example. Let’s say you sell running shoes and put out two ads. The first ad refers to your business as selling shoes, while the messaging on the second ad refers to your business as selling high-performance running shoes. The CTR for the first ad will likely be higher, because a greater portion of the population is interested in shoes in general than running shoes. However, though the second ad will have a lower CTR, it will be reaching a more targeted audience with a greater likelihood of converting. It is important to consider what is being measured when referencing these metrics, or marketers risk optimizing ads based on bad data.
With this is mind, it is important that marketers avoid making decisions based on vanity metrics, that look good on paper, but can lead to incorrect optimizations. Rather, focus on impact measurements and data metrics that indicate progress towards identified goals, and offer insight into the success of marketing campaigns. Forrester suggests focusing on metrics and insights such as:
- Easily quantifiable conversion or cost per conversion metrics that allow teams to identify low performing campaigns.
- Leading indicators such as open rates which can be compared against financial performance to determine which campaigns are performing well, then course correcting.
- Diagnostic metrics that show how operational elements of a campaign (load speed) can affect experience and conversion.
Integrating Metrics with Unified Marketing Measurement
In addition to avoiding vanity metrics, marketing teams must ensure they can correlate and compare the various metrics they identify as impactful. A good way to do this is with unified marketing measurement (UMM). UMM centralizes person-level and aggregate metrics from digital and offline campaigns for a 360° view at marketing impact. Leading indicators and diagnostic metrics may not always be comparable - for example, open rate to load speed. However, if these metrics are normalized and viewed in a unified way, they can provide a more holistic understanding of the customer journey and which tactics work.
In addition to correlating digital metrics, unified marketing measurement allows for the integration of measurements garnered through offline campaigns such as TV ads, as well as long-term data such as seasonality trends, economic factors, etc.
There are a variety of digital metrics that marketers can rely on to measure the success of their campaigns. However, it is important to know exactly what each of those metrics represents and how they relate to your campaigns. When selecting which measurements to focus on, emphasize those that provide concrete insight into the customer journey and financial impact.
For more information on marketing analytics and measurement strategies, check out our Marketing Dictionary.