Key performance indicators (KPIs) in online marketing

Knowing your personal goals is important when looking at individual online marketing KPIs. This is because the indicators are only a means for measuring whether previously-set goals have been achieved. Key performance indicators (KPIs) are figures you can use to measure the progress and success of the marketing measures in place.

Each marketing team (after consulting various other departments) should individually define their own personal goals so they can make the most of the KPIs. These objectives can be divided into four main areas:

• Branding/brand development: if you want to make your business more well-known or strengthen your brand, ensure you pay attention to the number of visitors to your website and social media channels, keep positive feedback on social networks in mind, and especially try to generate organic traffic to brand terms.

• Leads: a lead is an individual or a business that is interested in what you have to offer. This is a valuable factor, especially regarding technically challenging products with a long decision-making process. Contacts, registrations, downloads – all activities where potential customers show an interest and leave their information - are relevant.

• Sales: the main objective in e-commerce is to increase sales. Besides the number of orders taken, it also helps to know where paying customers originate.

• Engagement: user engagement refers to actions and interactions between users and companies. There are various KPIs which are relevant to user engagement like social media figures. From these you can find out the social environment of a company and what the target group looks like.

Once you’ve defined your goals or sub goals, you then have to pick out the most important information from the mass of online marketing figures described below. The figures fall into two groups: primary and secondary indicators. Social media statistics is a further group and there are additional specific figures of interest for every marketing sector, e.g. for e-commerce, search engine optimization, and E-mail marketing.

Primary indicators in online marketing are directly related to the objectives and are transaction-specific. They provide information on the profitability of implemented measures. Overall, they’re the most important key performance indicators and are crucial factors in every online marketing campaign.

• Number of conversions: depending on the business model and objectives, this could be sales, e-mail contacts, downloads, or registrations.

• Conversion rate: conversion rate is the ratio of clicks or visitors that lead to registered conversions. It shows how many visitors have performed the desired action.

• CPA: this indicator (cost-per-action) estimates the cost for each objective or action. It’s also referred to as cost-per-order (CPO) or cost-per-lead (CPL).

• ROI: the ROI (return on investment) is the ratio of profit to invested capital and so represents the most important economic indicator for marketers. It shows whether certain marketing measures are profitable or not.
  
  
• ROAS: ROAS (return on advertising spending) describes the correlation between the invested marketing budget and the sales generated from it. From this you can find out a campaign’s effectiveness.

Secondary indicators are indirectly related to the above mentioned objectives. They are predominantly related to data and communication and provide information on the route that potential customers are taking up until the buying process. Here, it’s easy to identify obstacles and weaknesses in usability.

• Visitors: the number of visitors is the simplest and most basic online marketing indicator when conducting a web analysis. The impact that the implemented advertising activities have isn’t just reflected in sales, but also in traffic and can be traced through visitor numbers.

• Unique Visits: unique visits provide information about the net quantity of the total number of visitors. During the web analysis, visitors’ IP addresses are registered and only unique visitors are counted. If a site is visited several times on the same computer within a certain time frame, this will only count as one unique visitor.

• Returning visitors: the number of returning visitors is a good sign when it comes to how attractive a site is. If a lot of visitors keep coming back, it shows that the site has many loyal visitors or readers and indirectly indicates that your content is interesting and relevant. But be cautious: if the number is high in comparison to the number of absolute visitors, you should try to win over more new customers.

• Page impressions: if you want to find out how active your site’s visitors are, you should take a looks at the page impressions. They reflect how many times a visitor accesses the site. If the number of page impressions is high, it means that the visitor engages a lot. If the value of this KPI is low, you could try integrating more information or improving internal link structure.

• Bounce rate: ‘bounce rate’ describes the correlation between visitors who stay on a website and click on more pages and those who leave the site straight away. A high bounce rate suggests that visitors aren’t finding what they’re looking for, or that the usability/attractiveness of the site could be improved.

• Retention time: the retention period is the average amount of time that a visitor stays on your site. You can use this KPI to find out information on users’ actions and the quality of your web presence. The figure is especially important for those working in content: if visitors are quickly leaving a page with a long text on it, you need to optimize the page.

• CTR: the click-through rate (CTR) is generally measured to work out the success of individual advertising, such as AdWords or newsletter campaigns. It provides information on the attractiveness of an advert or a promotional message by showing how often it’s clicked.

In social media, and especially in social media monitoring, marketers have established fixed measurements so they can see how the company’s social media is fairing. Online marketing indications are interaction-based. There are numerous KPIs when it comes to measuring reach, mood, engagement, and social influence. Here are the most important indicators at a glance:

• Social media awareness: social media awareness (also called ‘social buzz’) can be measured using social media tools. Using these tools, you can monitor your own brand on different social networks. All mentions of your company, brands, or products are collected and presented in a single online marketing KPI. With the ‘share of buzz’ you can find out how your number of mentions differ compared to those of your competition.

• Feed subscribers and newsletter subscribers: for newsletter marketing, there are specific tools like e-mail marketing software and indicators that are relevant for successful campaigns. But since new newsletter recipients are often generated by other marketing measures and primarily through the website, the number of subscribers is also an important indicator for on-site measures. E-mail and RSS feed subscribers show customer loyalty and are an important retargeting instrument.

• Social media contacts: the number of contacts is purely quantitative and provides information about a social media campaign’s potential and reach. But they can usually only make small statements about quality. Thousands of ‘likes’ are worthless if the user doesn’t interact with the site. Engagement is needed to turn social media contacts into success-oriented figures.

• Number of retweets/replies/posts/comments/likes: based on the number of actions (retweets, comments, posts, etc.), you can measure the above mentioned user engagement and then you have a qualitative figure in the context of social media. The right tools enable you to measure the activity as well as perceive the mood and find out which contexts your company is mentioned in.

If you want to evaluate your online marketing KPIs, you have to measure them over an adequate period of time. This is the only way to understand and identify trends and anomalies. Seasonal fluctuations and differences on a weekly basis can be disregarded. Which numbers are relevant depends on the business model since KPIs only make sense in a sector-specific context.

An example from the e-commerce sector: an online store selling small, everyday products uses a completely different rating based on the CTR or conversions compared to a store that offers expensive, consultancy-based products. In the B2B sector other parameters are relevant since there are fewer conversions for a good ROI. What’s clear is that if you’re working with KPIs, you have to keep an eye on your individual objectives along with the market context. You can read more about this in our guide on web analysis.