Whether you are a digital advertiser or traditional advertiser, data is crucial to your advertising success. But what do you measure? There are two kinds of data points to consider KPI’s and Metrics. The main focus of any advertiser should be on their KPI’s, not metrics.
What Are KPI’s and Metrics
KPI’s (Key Performing Indicators) are the data points that are used to measure performance and success. A metric is a number that may be a part of the KPI. Metrics and KPIs are like squares and rectangles: All squares are rectangles, but not all rectangles are squares. Similarly, all KPIs are metrics, but not all metrics are KPIs. For example, Company A has “sales” as a KPI. In order to make the sale they need to have an appointment with the prospect. Appointments usually occur after the prospect either fills out a form on their website or makes a phone call. In this instance the KPI’s would be Sales, Appointments, Phone Calls and Form-fills. If the business determines there is no correlation between how many people see their ads and call, then Impressions would just be a metric. A bit confusing?
KPI’s are directly related to the objective of the advertiser measuring them. KPI’s can vary within a company. The Sales department of Company A has the KPI’s described above, but the PR department believes that the more people who see their messaging the greater their level of success. In that case the PR department would classify Clicks on their posts and Impressions of their content as KPI’s, because it leads to their success.
Define Your KPI’s
Before starting an advertising campaign, goals should be set. If you are working with an advertising agency, they will help you determine objectives. Based on experience there will be a recognized path to the goal. In some cases, the path may be direct. See an ad then call or click to buy. In other cases, the path will involve several steps. By understanding the path, you can establish your KPI’s and measure them.
Do not ignore metrics, because you may find correlations between a metric and your KPI’s. In general, Clicks may not directly influence your KPI’s but you may find a particular channel where that is not true. Maybe your Facebook ads and organic traffic clicks do not lead to Conversions, but with Google Ads there is a correlation. This will effect your strategy.
In digital advertising there are many metrics to consider. When working with a digital advertising agency they will not just look at your traffic metrics such as Clicks, Click-through Rate, Site visits etc. They will also review Engagement metrics to understand how people interact with your site. Things like Bounce Rate, Page Views and Time on Site will show the interest level of site visitors. Engagement levels often correlate to KPI’s/Conversions.
Measure Your Data
Most metrics can be measured through Google Analytics (GA). As mentioned many times before on this blog, GA is free and very comprehensive. If you are not comfortable with GA look for a reliable digital advertising agency. Not all KPI’s and Metrics can be found in GA. If you are a retailer, counting store visits is extremely important. For other businesses phone calls are a valuable KPI. If that is the case and multiple advertising channels are being used, then a telephone tracking service is a must. A tracking service will provide unique phone numbers for each ad channel and track when the calls come in, session duration and even record the calls for review.
Measuring KPI’s requires some planning and then careful execution. KPI’s and Metrics need to be measured over time and compared. Careful review of your data may reveal that what was thought to be a Metric is really a KPI, or the reverse. KPI’s will tell you a lot about your marketing efforts and how to optimize them. With detailed reporting, and accurate analysis, KPI’s will put you on the path to success.