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Evaluating the results of your Digital Marketing efforts with KPIs and ROI
Here at Web Geeks, we talk a lot about how to form and optimize digital marketing strategies. However, we do not often touch on how to analyze the results of your campaigns. Today, we are going to delve into the world of KPIs (key performance indicators) and ROI (return on investment).
What are KPIs?
KPIs or Key performance indicators/ Key metrics are the marketing world’s term for achievements. For example, what did we achieve during this campaign? We have had X number of new users visit our website. They are just simple results used to measure the success of your digital marketing campaigns. KPIs, like any other results, should be relevant to your marketing goals and brand. There is no use judging the outcome of an email marketing campaign by the amount of time you spent at the gym last Thursday now, is there? Exactly! KPIs should be relevant to your campaign.
KPIs should also be measurable. We must be able to monitor and measure fluctuations over time, either against our own results or industry benchmarks. They should also be actionable; in other words, they need to be useful in guiding future decisions. You need to be able to learn, adapt, and grow from these results.
If you ever have an issue deciding upon a KPI, just remember SMART goals – specific, measurable, achievable, relevant, and time-bound.
So, what is ROI?
ROI is a measurement, the final measurement, if you will. ROI, or return on investment, is, quite simply, the profit you have made from your digital marketing endeavours. It can be calculated by deducting the amount you spent on your campaign from the amount you earned. For the more mathematical amongst us, the exact formula to provide you with a percentage of profit would be:
ROI = ( (Revenue-Cost)/Cost) x 100
From then on, it’s pretty self-explanatory. A positive result means you have made a profit, and a negative result means you have made a loss. However, whilst making this assessment, we must take into consideration what type of campaign we are looking at; this is where benchmarks come into play. You may have returned with a positive result, but did you reach the benchmark? If not, then you should take your results and KPIs and learn from them to better optimize your future campaigns.
Now, Let’s take a look at how to measure the success of three different types of marketing campaigns.
Email Marketing
What KPIs should I use to measure my email campaigns?
This all depends on the type of campaign and your marketing goals, of course, but let’s go over the main contenders;
- Open Rate – How many of your emails were opened
- Click-through Rate (CTR) – How many people clicked on one or more links inside the email
- Conversion Rate – How many people made a direct action as a result of your email, such as filling out a form, completing a survey, or making a purchase. What you classify as a conversion depends on your campaign goal. If your email campaign is one of nurture instead of direct sales, you may just be wanting someone to download your ebook. In that case, this is your conversion.
- Unsubscribe Rate – How many people unsubscribed from your mailing list
All of these are measurable ways of tracking your email campaigns. These can normally be tracked within your email or CRM (customer relations management) software. Remember, to make your email campaigns all that more successful, it is key to craft compelling landing pages with clear and well-thought-out calls to action.
How About ROI?
Most companies say that email marketing delivers them the best ROI. This is for a few specific reasons.
Cost-effectiveness
Email campaigns, depending on the service you are using to deliver the emails, normally cost very little to implement, especially in comparison to other marketing campaigns executed on the likes of Google ads. You usually incur some cost from whatever service you are using to deliver bulk emails, normally a subscription cost of some kind or perhaps a very minimal amount per email. Some services are more cost-efficient than others. With this marketing method, you can achieve a very high reach even with a minimal cost.
Direct Delivery
Instead of other marketing campaigns where you are essentially just waving an ad in front of an audience, hoping they are watching and waiting for them to click on it, Email marketing delivers your message straight to the email of your intended audience. The majority of people check their emails at least once per day, and since the development of smartphones, that number has risen as email apps on our phones alert us when new emails are received. Email marketing truly is an effective strategy.
Crafting Your Audience
Unlike with other digital marketing avenues, you can craft your audience specifically using the art of list building, not just by demographics, so you are reaching the exact people you want to reach instead of computer-generated groupings of people. Due to this, email marketing generates a lot of engagement and conversion. You can even use a series of emails to nurture a lead into a fully formed customer. You are also able to automate your emails, leaving you more free time for other marketing activities.
Measuring the ROI of My Email Campaigns
When you are finished with your campaign, to calculate the ROI, just subtract the Cost of the campaign, taking into account the Cost of the platform you are using, the creation costs, staff wages, etc., and anything that you paid to go towards building and implementing the campaign from the revenue you made. Then divide this by the Cost and multiply that number by 100 to see your ROI as a percentage of profitability. So once again:
ROI = ( (Revenue-Cost)/Cost) x 100
When measuring the ROI, don’t forget that direct sales from clicks are not the be-all and end-all of marketing. You may have a sale further down the line from someone who has taken direct action as a result of an email campaign, such as signing up for another newsletter or filling out a form. There is also the lifetime value of that customer; that customer may spend $1000s of dollars with your company over the years just because he/she clicked on one email.
Google Ads (PPC)
Google ads or pay-per-click advertising are another great avenue to go down in your continual efforts to market your brand. Although more expensive than email marketing, they do see good results. Let’s take a look at some of the main KPIs to help you measure the success of your ad campaigns:
- Click-Through Rate (CTR) / Cost Per Click (CPC) – Once again, we see CTR as a main KPI. CTR is the number of people who clicked on your ad when they saw it. However, this time, we are going to compare it to the number of impressions (the number of people who saw your ad). Doing this shows us how effective our ad and demographics are, as we don’t want our audience to just see it; we want them to follow our CTA (call to action) after seeing it. Cost per click is quite simply an average calculation; we divide the number of clicks by the total Cost of the ad campaign to determine how much we are paying for each click.
- Conversion Rate/ Cost Per Conversion – The number of clicks that result in a direct action. To calculate the Cost per conversion, divide the Cost of the marketing campaign by the number of conversions. Remember to define your conversion first, then set up conversion tracking in Google ads to see your conversion rates.
- Quality Score – The quality score is a measurement given to you by Google that measures the quality of your ad based on relevance, keywords, and landing pages. You can see this in the keywords tab in the Google Ads dashboard.
Google ads shows you many more KPIs, all viewable either through the Google ads dashboard or via the combined use of Google Analytics. You can further evaluate your results by looking out for stats such as
- Bounce Rate – this tells you how many people left your site after viewing just one page after an ad click.
- Pages Per Session – which helps you see how many pages of your site a user looked through after clicking on your ad. And many more.
Google ads combined with Google Analytics really do have a whole host of analytics for you to take a look at to help you calculate the success of your campaign. Now, remember, as Google Analytics gives you various data pertaining to your website visitors, you can use the stats you find there to measure the success of your other types of campaigns, too.
How do I Measure the ROI of my Google Ads Campaigns?
Thankfully, with Google Ads Conversion Tracker, tracking your ROI is quite simple. Once you have the number of conversions for the whole campaign and the total Cost of your campaign, just apply the formula we mentioned before.
Social Media Marketing
Social media is a platform that shares a trait with email marketing. It is cost-effective. If you are simply sharing posts on social media, you just have to look at how much it costs to create those posts and how many man-hours went into scheduling and planning, etc. However, without using paid ads, your campaigns’ success depends on your following on your respective platforms. However, if you choose to use paid ads on these platforms, you will reach a broader audience with a cost, in general, a little under that of advertising on Google. Depending, of course, on keywords, demographics and industry.
Social media marketing can also be used to raise brand awareness, nurture your audience or gather followers, not just achieve direct sales. It all depends upon your marketing goals. Always remember that conversion rate is a very adaptable metric.
KPIs
First, we see all the usual KPIs such as Impressions, conversion rate and Cost per conversion. However, social media has a couple of different ones:
- Reach – The number of users who see your content either organically (unpaid) or Paid reach; for this metric, every user is only counted once, so you can measure how many unique individuals have seen your content, not just how many times it was displayed.
- Engagement Rate – This is a measurement of how many times people have engaged with your post, actions such as likes, shares, comments or clicks.
To successfully measure all of your platform-specific metrics, you must use each platform’s respective analytics, such as Facebook and Instagram insights or Twitter analytics.
How to Measure the ROI of my Social Media Campaigns?
ROI calculations generally remain the same irrespective of which platform you choose to run your campaigns on. The calculation itself will never change; all that will change is the costs involved in generating a campaign on each platform. As we have mentioned before, the man hours involved in planning, creation, scheduling and with platforms such as social media – interaction-based tasks, ensuring your audience knows you are there and happy to reply to them. However, even this can be automated – to a point – depending on how authentic you wish to remain. Then, you input this number into the ROI calculation along with the revenue of your campaign. You will find the profit it has generated for your company.
Need Help Tracking your KPIs and Conversions?
Brand+Machine powered by Web Geeks is a marketing software developed to give you the power to do just that! Brand+Machine has an impressive arsenal of inbuilt analytics that will help you track all types of digital marketing campaigns. From email marketing to SEO, it can not only help you to track the results of your campaign but also to develop the campaigns, generate forms and surveys, and track your project progress all in one intuitive application. It can even help you to automate various steps of your campaign so that no step is ever missed. And with its ability to integrate other services, such as Google Analytics, it really does cover all of your bases.
Contact us today to find out more about Brand+Machine and how it can help you with your analytics, campaigns and other marketing activities, as well as your day-to-day business processes.
Key Takeaways
- Before you are able to measure the results of your campaigns, you must clearly define their goals and set relevant KPIs
- KPIs can vary depending on the type of campaign you are running and its method of delivery.
- Conversion rate is a KPI that is self-defined according to brand and marketing goals.
- The use of benchmarks allows us to judge the success of our campaigns in comparison to previous campaigns or industry averages.
- The calculation for ROI always remains the same ROI = ( (Revenue-Cost)/Cost) x 100
- Email marketing normally has the best ROI due to its cost-effectiveness and the direct method of delivering your campaign.
- Even though you can calculate ROI from direct sales of a campaign, other factors must also be taken into consideration, such as a customer’s lifetime value.