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Marketing KPIs

If you can't measure it, you can't improve it

- Peter Drucker

You must have encountered bodybuilders at least once in your life. The way they go about their business and track their progress. Bodybuilding is a science that helps people in attaining their desired objectives, i.e., the ideal physique. Bodybuilders keep track of their calorie intake, rest periods, and diet to achieve their desired results. They track their progress through metrics such as body mass index and fat level percentages. Marketing key performance indicators (KPIs) perform a similar function in marketing. How? Let's jump right into it. This explanation discusses the fundamentals of marketing KPIs.

Marketing KPIs Definition

Companies employ marketing to capture, engage, and retain the target audience. They develop marketing campaigns to deliver the message, assist in the customer purchase journey, and communicate the created value to their customers. The outcome of these campaigns determines how well the companies executed the marketing strategies. Here, the pertinent question is: can they track the performance of these marketing campaigns? The answer is a resounding "yes." Marketing KPIs give companies the option to keep track of marketing performance.

Marketing KPIs (key performance indicators) are metrics used by businesses to track and improve the performance of marketing campaigns.

During the planning stage of a marketing campaign, companies set the objectives and allocate the marketing budget. During this phase, they also pinpoint areas where they want to direct the marketing efforts. These areas could be return on investment or market share, for example. Setting key performance indicators helps companies effectively gauge the campaigns' performance at the end.

A shoe brand wants to increase its digital presence. The marketing department would set marketing KPIs based on that objective. It could allocate more resources for digital marketing. Hiring expert digital marketers, improving digital content, or utilizing tools for digital marketing could all be part of their actions. The brand might observe reach, engagement rates, and impressions as key performance indicators.

The performance measurement of marketing campaigns allows companies to rectify the issues and improve the marketing campaigns overall.

Examples of KPIs for Marketing

Companies may focus on single or multiple marketing KPIs to measure and improve their marketing campaigns. Here are two examples of KPIs for marketing.

Return on Investment (ROI)

In marketing, the return on investment means the amount of money received compared to the marketing costs. This performance indicator shows the success or failure of a marketing campaign in terms of investment. When the gain is less than the cost incurred, it means that the campaign's return on investment is low. Companies use this marketing KPI to evaluate results and possibly improve the results in the future.

Check out our explanation of Marketing ROI to learn more.

Conversion rate

This online marketing KPI measures the percentage of visitors who complete the desired action, i.e., purchasing a product or subscribing to a service. Conversion rate is an important marketing KPI because it shows how successful a business is at attracting leads. For instance, the social media account of a brand shows more engagement but fewer conversions, which means it can drive traffic but cannot get visitors to complete the desired action.

Marketing KPIs to Measure

Marketers use KPIs depending on which aspect of the marketing campaign they want to focus on. These marketing KPIs help them keep the campaign on track and improve it if possible. Here are some of the usual marketing KPIs.

  • Cost per lead – This marketing KPI is required when advertisers pay for every new lead generated. It measures the cost-effectiveness of a marketing campaign. A lead is generated when a customer interacts with the brand.

  • Cost per acquisition – The overall cost of closing a sale is calculated through this marketing KPI. It could include every stage related to the sales funnel. Each cost is calculated from research until the end of a sale to determine the total cost per acquisition. It is a good marketing KPI to determine the budget for future customer acquisitions.

    Take a look at our explanation of the Marketing Funnel to learn more about customer acquisition.

  • Customer retention – This marketing KPI measures the ability of a business to retain its customers. In business, it is more expensive to attract new customers than it is to retain existing ones. Therefore, companies prefer keeping existing customers if possible. It also helps businesses improve their services if they lack customer support.

  • Sales revenue – This KPI is used to measure the progress of a business to generate sales revenue. Marketers analyze data and trends to set a sales revenue target.

  • Organic traffic – Marketers use this marketing KPI specifically in online marketing. One of the critical tools of online marketing is SEO (search engine optimization). Marketers use this KPI to track the organic traffic on a website.

    Want to learn more about organic traffic? Check out our explanation of SEO Marketing.

  • Response time – This marketing KPI is used to measure the sales team's response time. This team works in tandem with the marketing team to provide value to the customers. When the response time is less, it is satisfying for customers.

Marketing KPIs Response time StudySmarterFig. 1 - Response time - A key marketing KPI

Influencer Marketing KPIs

Influencer marketing is a common theme these days. Brands pay influencers for promotions. We can use many marketing KPIs to measure influencer campaign performance.

  • Referral traffic – The traffic directed to a page from external sources. This KPI shows the level of success and reach of a campaign. It also tells us how many people visited the page.

  • Brand reach – With influencer marketing, brands can reach audiences on a wide scale. It certainly increases the brand reach. Through this KPI, a business can determine the reach of a campaign.

  • Audience growth – This KPI in influencer marketing is used to measure audience growth. Marketers check to see the audience growth through social media analytics.

  • Engagement – When visitors interact with a website or social media page, it is called engagement. In influencer marketing, this KPI is used to gauge the effectiveness of a campaign. Engagement could be in the form of likes, comments, clicks, or the overall engagement rate.

Learn more about influencers in our Influencer Marketing explanation.

Types of Digital Marketing KPIs

Digital marketing KPIs are used to gauge the performance of digital marketing campaigns. They help businesses track their performance and attain their marketing objectives. They help marketers identify the areas where it works and the areas where they can improve. Here are the common types of digital marketing KPIs.

Search Engine Optimization – Search engine optimization (SEO) is a standard digital marketing KPI. It helps a business rank higher in search engines. With a higher ranking on search engines, customers are likely to be exposed to the content and business offerings. The critical aspects of SEO are keyword research, backlinking, and web layout.

Marketing KPIs Digital marketing KPIs StudySmarterFig. 2n - SEO, a type of digital marketing KPI

Social Media – social media KPIs help marketers keep track of social media campaigns. They include social media platforms such as Facebook, Instagram, LinkedIn, TikTok, and YouTube. These platforms provide analytics to give a comprehensive view of the progress of a campaign. Marketers get measurable results through these KPIs.

Search Engine Marketing – Search Engine Marketing (SEM) is a paid form of digital marketing KPI to improve the visibility of digital advertisements. Marketers use paid tools such as Google Ads to promote their ads and increase their audience. One of the main KPIs of SEM is PPC (pay per click), where advertisers pay for the clicks generated on an ad through the help of a paid tool.

Marketing KPIs - Key takeaways

  • Marketing KPIs (key performance indicators) are metrics used by businesses to track and improve the performance of marketing campaigns.
  • Companies may focus on a single or multiple marketing KPIs to measure and improve their marketing campaigns.
  • Marketers use KPIs depending on which aspect of the marketing campaign they want to focus on.
  • Digital marketing KPIs are used to gauge the performance of digital marketing campaigns.

Frequently Asked Questions about Marketing KPIs

Marketing KPIs (Key Performance Indicators) are metrics used by businesses to track and improve the performance of marketing campaigns. 

Marketers set KPIs based on the objectives of their campaigns. If marketing objectives are clearly defined, it helps in setting the KPIs for marketing. 

The most important KPI in marketing depends on the objective of your campaign. Overall, ROI (return on investment) is an essential marketing KPI. 

Conversion rate is one of the KPIs in affiliate marketing. 

ROI and conversion rates are KPI examples in marketing. 

Marketing KPIs can be monitored during the evaluation of a marketing campaign. 

Final Marketing KPIs Quiz

Question

Define Marketing KPIs 

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Answer

Marketing KPIs (Key Performance Indicators) are metrics used by businesses to track and improve the performance of marketing campaigns. 

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Question

During the ________ stage of a marketing campaign, companies set the objectives and allocate the marketing budget.

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Answer

Planning

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Question

_________ help companies set key performance indicators to effectively gauge the performance of their campaigns.

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Answer

Marketing objectives

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Question

The performance measurement of marketing campaigns allows companies to rectify issues and improve their marketing campaigns overall. 

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Answer

True

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Question

What does ROI stand for? 

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Answer

Return on investment 

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Question

What does ROI mean? 

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Answer

It means the amount of revenue received compared to the marketing costs. 

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Question

Companies use the ROI KPI to evaluate the result and possibly improve the results in the future. 

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Answer

True

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Question

What does the conversion rate show? 

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Answer

Conversion rates show how successful a business is at attracting leads.

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Question

Is conversion rate a digital marketing KPI? 

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Answer

Yes

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Question

When advertisers pay for every new lead generated, it is called _____. 

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Answer

Cost per lead

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Question

What is a cost per acquisition? 

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Answer

Through this marketing KPI, the overall cost of closing a sale is calculated

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Question

The traffic that is directed to a page from external sources is called ______.

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Answer

Referral traffic

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Question

_________ helps a business to rank higher in search engines.

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Answer

SEO

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Question

____ is a paid form of digital marketing to improve the visibility of ads. 

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Answer

SEM

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Question

The important aspects of SEO are keyword research, backlinking, and web layout. 

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Answer

True

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