Over the last 20 years, the rise of new online channels has vastly grown the data-gathering capabilities of businesses from all kinds of industries. Multiple touchpoints, from email to paid and social, have expanded brands’ abilities to measurably determine the success of their marketing efforts and iterate accordingly.
However, this rise in data has also come with setbacks, especially for small businesses. Tracking multiple touchpoints and vast data points can be daunting for even the most seasoned marketers. What data points should I include in my analysis? What do all these acronyms mean? How do I choose KPIs? These are common questions CMOs ask themselves daily.
Are these questions keeping you up at night? Worry no longer with this guide on the top metrics you should track to grow your business.
Why is choosing the right marketing metrics important?
It’s often thought that online marketing is all about sharing pretty images on social media. The truth is for online marketing strategies to be effective, data is vital. Gathering the right metrics will allow you to iterate on your messaging and learn what makes your target audience tick.
Furthermore, benchmarking with third-party tools, such as Varos, will allow you to determine trends in your industry.
There are distinct metrics for different channels you should consider for each of your advertising efforts. This blog will cover the following: marketing, paid, social, email, and SEO. These metrics are a great place to start diving into data analysis and will allow you to understand your business better, regardless of your growth stage.
These metrics will allow marketers to monitor and measure their business progress over time. According to an MIT study in partnership with Google, 89% of leading marketers use strategic metrics, like gross revenue, market share, or CLV, to measure the effectiveness of their campaigns. Let’s look at each one in more detail.
Gross revenue is the total amount of revenue generated by a business over a specific period. Gross revenue differs from Net Revenue because it doesn’t consider any expenditures incurred by the company. For example, if a business sells a product for $100 that costs $10 to manufacture, the gross revenue would be $100, whereas the net revenue would be $90.
Gross revenue helps demonstrate a business’ value to stakeholders. Furthermore, gross revenue is the starting point for a brand’s accounting. However, it’s important to note that a company shouldn’t solely focus on gross revenue, as this metric will not prove whether a business is profitable.
Market Share is the percentage of an industry earned by a particular business over a specific period. It is calculated by dividing the total company sales by the total industry sales. For example, if a company generates $100 in sales over a month compared to $1000 in sales for their entire industry over the same period, its market share in their industry would be 10%.
This metric helps determine the size of a brand in relation to its competitors. Furthermore, monitoring its changes over an extended period helps determine the brand’s competitiveness within its industry.
Customer Lifetime Value
Customer Lifetime Value, or CLV, stands for the total revenue a business can expect from a single customer throughout their relationship. It is calculated by multiplying the average customer value over a specific period times the average customer lifespan. For example, if an average customer for a brand spends $100/year and the average customer lifespan is five years, the CLV will equal $500.
CLV helps identify potential issues to help a business boost customer loyalty and retention. Furthermore, by segmenting CLV by cohorts, a business can further hone in on its target audiences with the highest potential CLV.
Paid Marketing Metrics
Paid media refers to external marketing efforts that involve a paid placement. Examples of this include Meta Ads, Google Ads, and TikTok Ads. Paid Marketing Metrics will allow businesses to monitor and assess their media buying campaigns and iterate on their overall strategy accordingly. The paid marketing metrics will vary depending on a business' overarching goals. However, there are some basic metrics all companies should consider including in their tool belt.
ROAS and MER
ROAS stands for Return on Ad Spend, a metric used to measure the revenue earned for every dollar spent on a campaign. ROAS is calculated by dividing the revenue attributed to a specific ad campaign by the cost of that campaign. For example, if a campaign on Meta Ads is attributed $1000 in revenue with a $500 ad spend, the ROAS for that campaign would be 2x. This number would mean that the campaign generated $2 in return for every dollar spent.
Historically, ROAS has been one of the most important metrics leveraged by Paid Media Buyers to determine the success of a campaign. However, due to ongoing increases in privacy protocols across the paid media space, such as iOS14, we'd recommend complementing ROAS analysis with the Marketing Efficiency Ratio, or MER.
MER, also known as blended ROAS, is a metric used to determine the effectiveness of your overall paid media efforts. MER is calculated by dividing total revenue by total ad spend. For example, if a company has a total revenue of $1000 and a total ad spend of $200 across their paid media platforms, their MER would equal 5.
While ROAS remains a widely used metric across the paid media space to determine the performance of specific campaigns and optimize them accordingly, we suggest incorporating MER into your paid media analysis tool belt. The latter will give you a holistic view of your paid advertising strategy.
Link Click-Through Rate
Link Click-Through Rate or Link CTR stands for the number of clicks an advertiser receives on their ads per the number of impressions. Link CTR is calculated by dividing the number of link clicks an ad gets by the number of times an ad was shown. For example, if an ad had ten link clicks and 100 impressions, the CTR would equal 10%.
Link CTR is a valuable metric to determine your ads' relevance to the targeted audience. If the link CTR is high, the audience has a higher affinity to the ads' messaging. Furthermore, a higher link CTR directly relates to higher search rankings and lower costs for your ads. The platform's algorithm will view your ads as more relevant to your audience, rewarding you with better and cheaper placements.
Determining a good CTR will vary depending on your industry and specific platforms. Still, a good CTR is generally considered to be >1.91% for Google Search and >0.9% for Facebook Ads. If your CTRs are below those benchmarks, we’d suggest considering testing out new creatives or copy.
Link Cost per Click is a valuable metric to benchmark the performance of your campaigns. Furthermore, for Google Ads, in particular, Link CPC is used to determine how much it will cost you to advertise on Google, and it’s a vital metric that Google’s algorithm will leverage to assess your brand’s positioning against your competitors.
Social Marketing Metrics
Social Marketing Metrics refer to the metrics used to determine the success of your different business’ social media platforms. 82% of the US population uses at least one social media platform, making it extremely important for brands to advertise through these channels. The specific platforms a business will leverage will depend on its industry and where its target audience is most likely to be. Regardless of the social media platforms you choose for your business, there are some key metrics you should consider tracking.
Average Engagement Rate
Engagement in social media generally refers to metrics that involve a viewer taking action on a specific post, such as likes, shares, and comments. Average Engagement Rate measures the amount of interaction social media content earns relative to reach or audience size. The Average Engagement Rate is calculated by dividing the total engagement metrics (e.g., likes+shares+comments) by the number of followers. For example, if a brand has 100 likes, ten shares, and ten comments over one month, and 1000 followers, the average engagement rate would equal 12%.
Average Engagement Rate is a valuable metric to determine whether your content resonates with your target audience. Furthermore, it's important to note that the engagement metrics will vary based on the platform analyzed. Other engagement metrics include quote tweets, regrams, sticker taps, and branded hashtags.
Impressions refer to the total number of times your content has been shown to social media browsers.
Impressions are a valuable metric to determine the exposure of your social media posts and your brand's ability to get content in front of your target audience.
Follower Growth Rate
Follower Growth Rate refers to the percentage of new followers on a particular social media account over a specific period. The follower Growth Rate is calculated by dividing the number of new followers by the number of total followers. For example, if a brand gained 20 followers over one month on its Instagram account and had 100 followers, its Follower Growth Rate would equal 20%.
Follower Growth Rate helps determine your follower growth, develop benchmarks, and compare your growth to your competitors.
Email Marketing Metrics
With 4 billion daily email users worldwide, the importance of having an email strategy cannot be overstated. However, sending emails without focusing on key metrics to determine the success of different strategies will doom your brand in the long run. Regardless of the email marketing software you use, there are some key metrics you should consider adding to your tool belt.
Open Rate refers to the percentage of subscribers who open a specific email. It is calculated by dividing the number of people who opened a particular email by the number of people who received it. For example, if a brand sends an email to 100 people and 20 people open it, the Open Rate would equal 20%.
Open Rate is a valuable metric to determine how each campaign and subject line performs with a particular audience. Furthermore, an increasing open rate could indicate increasing consumer trust over time.
Bounce Rate refers to the percentage of a brand’s emails that couldn’t be successfully delivered to a recipient’s inbox. The bounce rate is calculated by dividing the number of bounced emails by the total number of emails sent. For example, if a brand sent 1000 emails and ten bounced, the bounce rate would equal 1%.
Bounce Rate is a valuable metric to ensure everything runs smoothly with your emails. A high bounce rate could lead to problems with Internet Service Providers (ISPs). In email marketing, in particular, this refers to the major email providers, such as Outlook, Gmail, and Yahoo. A high bounce rate could lead ISPs to label your brand’s emails as spam.
List Growth Rate
List Growth Rate refers to the Rate at which a brand’s email list grows over a specific period. It is calculated by subtracting the number of new subscribers minus the number of unsubscribes and dividing that number by the total number in your email list. For example, if a brand gains 50 new subscribers over one month, loses 10, and has 1000 addresses in its email list, its list growth rate would equal 4% for that period.
List Growth Rate is a valuable metric to determine your email strategy's growth rate. According to an eMarketer study, email marketing is the most effective digital marketing strategy for acquiring and retaining customers, making your subscribers' growth vital to your business.
SEO Marketing Metrics
SEO stands for Search Engine Optimization, which refers to getting traffic from organic search results in search engines like Google. SEO metrics offer vital information to marketers that can help them build better strategies or improve existing ones. While there are hundreds of SEO metrics, we'd recommend adding the following to your analysis.
New Referring Domains
New Referring Domains are websites from which the target website has one or more backlinks. Backlinks are hyperlinks that point from one website to another, and it's one of the key indicators search engines use to determine a target website's ranking. You may receive multiple backlinks from the same site.
Overall, referring domains are vital for SEO as these will signal the quality and credibility of your website to search engines. They are high-impact ranking factors. Referring domains can be viewed through Google Analytics. To view them, go to Acquisition>All Traffic>Referrals. Once here, you’ll see a list of all the sites that referred traffic to your site.
Keyword Rankings refer to where your website places when a user searches for a specific keyword or phrase. A search engine usually uses hundreds of data points to determine your website's ranking. Still, incorporating high-traffic keywords into your content is a great way to begin moving the needle.
Google’s Keyword Planner tool is excellent for finding high-value keywords relevant to your business. To leverage this tool, input your business URL and a few relevant keywords. The system will then provide you with a list of potential keywords you can leverage. You can then arrange this list by search volume and competition level to determine the best keywords to focus on.
Domain Rating refers to the grade given to a website to predict how likely it is to rank on a search engine's result page. The rating ranges from 1 to 100.
There are several third-party tools businesses use to determine their ratings, including SEMrush or Ahrefs. Brands need to track domain ratings on an ongoing basis to determine the success of different content strategies and develop benchmarks against competitors. In general, scores between 40 and 50 are considered average. Scores above 50 are considered good, and a domain rating above 60 is considered excellent.
Regardless of your business' industry or size, tracking performance is vital to any company. Developing key metrics for each of your advertising efforts will allow your brand to track and improve performance on an ongoing basis and determine the results of different tests and strategies.
If you still need to decide what metrics to track for your business, our knowledgeable Growth Partners are happy to answer any questions! Connect with us here to learn more about how we can help.