Digital marketing is evolving at a breakneck pace.
In the past few years, the conversion to digital accelerated far beyond what was anticipated (in particular due to COVID).
Marketers who have ever dabbled in Google Analytics can attest to the overwhelming amount of available data.
Identifying the key metrics that will help you accurately track the ROI of digital marketing campaigns is crucial.
This article will provide you with 15 key metrics to help you determine the ROI of digital marketing. It will tell you whether your efforts have been successful and where you may need to make adjustments.
Cost Per Lead
You need to know the cost per lead if your website collects tips.
If you are losing money on each lead, it is a sign that your return on investment has been skewed.
Understanding your cost per lead will help you determine your marketing campaigns’ effectiveness and provide the information you need to make future budget and strategic decisions.
Lead Close Rate
How can you track your leads closes?
This is often done offline, meaning the data you collect online or through analytics is not used.
You can do that, but keep track of your lead closing rate. This will allow you to compare it with the number of leads you generate.
You can use this to ensure your digital marketing campaigns produce profitable leads.
The information can also be used to control new digital marketing campaigns.
You may need to adjust the targeting of your efforts if you receive a sudden influx of leads but they are closing at a slower rate.
Close rates can also give you an insight into how sales representatives and teams convert leads into sales.
Cost per Acquisition
You should now be able to calculate your purchase cost using the above data.
Divide your marketing costs by sales to get an idea.
Now that you know how much it costs to make a sale, you can better calculate your return on investment.
Most digital marketing leaders use Cost per Acquisition (CPA), paying only for leads or sales that meet a certain amount or target.
This is a great way to push goals toward conversions or preset outcomes.
Average Order Value
You may want to increase the number of orders, but paying attention to how much the average order is worth can be a significant benefit.
AOV is an essential metric that can help marketers track profits, manage revenue growth, and report a profit.
It is often as simple as providing more up-sells and improving the user experience to generate new revenue.
Conversion Rates by Channel
Integrating digital marketing strategies is essential for overall performance and revenue.
CMOs are under increasing pressure and are looking to determine which channels perform best and are most cost-effective.
We all want to know how our traffic is generated.
This information, whether organic, paid, social media, or any other avenue, tells us the location of most of our customers and the areas where marketing efforts generate the most buzz.
But that is not the end of the story.
Conversion rates are a good indicator of success. They can also help you identify the best opportunities.
Consider that 75% of traffic is generated by organic marketing, and 25% comes from PPC. Your PPC conversion rate is double organic.
What you can learn is to invest more in PPC. You can double your ROI by increasing PPC traffic until it matches organically.
Screenshot of Google Analytics in January 2022
With conversion lifting, attribution reporting helps you understand how channels interact and which channels influence others.
Conversion Rates by Device
You can do the same thing by checking the conversion rate by device.
You may want to invest in a device with a low conversion rate, particularly if traffic increases.
The conversion rate will differ depending on which device you use.
This is particularly true for marketers who work in retail and ecommerce, where mobile and tablet devices are increasingly used to make purchases.
Exit Rate
How many people leave your site from a particular landing page?
You should see the number of visitors who left your website from each landing page.
You may also see a percentage indicating the number of pages viewed/exits from the landing page.
Use the number of exits and percentage to improve the stickiness of landing pages.
Blog Clickthrough rates
What are you doing with this traffic?
Blogs are notorious for their high exit and bounce rates. But that doesn’t have to be the case.
Use them instead to set goals to drive traffic from your blog to the leading site.
Even a tiny increase in blog clickthroughs can generate new business for almost no extra marketing cost.
Customer Lifetime Value
It is impossible to truly measure the ROI of marketing campaigns until you know how much the average customer spends throughout their life.
For instance, it costs $500 to get a new client or sale. They only spend $500.
This seems to be a net loss when you add all the costs beyond your marketing investments.
What if you knew this customer would spend $500 every six months for the following five years?
The average lifetime value for that client is $5,000.
It’s not wrong to spend $500 on a customer.
LTV = Average Revenue per User (ARPU), x 1/Churn
You don’t want to lose money on your first customer. But if you know you will profit in the long run, you can quickly write off this first sale as marketing expenses.
NPS
Net promoter score (NPS). Customers use the metric to indicate whether they recommend products or services to others.
Screenshot of SurveyMonkey August 2021
The scores are calculated on a 1-10 scale and can indicate customer satisfaction.
NPS = % promoters v % detractors
You can improve your customer service by measuring and tracking promoters and detractors.