For a long time, marketing was seen as more art than science. Advertisements were created based on what felt good or whether or not it appealed to a certain demographic. If it succeeded, great; if not, it's back to the drawing board.
Times have changed, and rather than just flying by the seat of their pants, advertisers now need to have certain benchmarks and metrics in place to know exactly what's working and what isn't. While this may seem like a simple measurement of cost vs. revenue, the analytics involved are highly sophisticated, with everything from cost-per-click to time spent viewing a specific ad. KPI's, or Key Performance Indicators, can go a long way in helping a business grow.
One of the more broad views that an advertiser can look at their campaigns is by seeing how many people interact with their ads, which ones, and for how long. KPI's used to measure interaction (or consumption) metrics may include tracking unique visitors, page views, or unique page views, which measures how many pages a specific user visited during their visit. This information is vital for content marketers who want to know intimately which content is performing and how well.
Generally speaking, this type of information is primarily used by the marketing department that generates campaigns. If a certain keyword or email is underperforming, sometimes a few specific and minor tweaks can increase visibility by 1-2%, which can mean hundreds or even thousands of dollars in revenue, depending on the content.
How 'viral' is your content? If you post a blog or picture to a website, one of the things you'll want to know the most is whether or not others have found the material engaging as well, and social media metrics help the marketer understand what is garnering people's interests. This metric tracks everything from likes and shares on Facebook, to likes and retweets on Twitter, to shares and comments on Youtube, but may also include stats from sites like Pinterest, Quora, and Reddit. While some may see this as a brand-boosting endeavor, social shares can provide a fundamental first step in a buyer's journey.
With every advertising campaign, the goal is for people to ultimately engage with your business. People who do so are called 'leads,' in that they've demonstrated a willingness to interact - and possibly buy - from your company in the future. Developing a solid lead generation campaign is pivotal to future profits and generating qualified customers.
The metrics commonly used here are new leads and conversion rates from those leads. These can sometimes be difficult to track because every customer's buying path is different, but automated software tools can help determine these numbers.
Ultimately, the goal for every marketing department is to funnel customers from a simple audience, to interested leads, to customers; back-end marketing is usually responsible for retaining those customers once they're in place. BI Dashboards can help aggregate all of these different metrics in one easy-to-read format, which allows marketers the ability to make tweaks to certain campaigns to increase sales metrics.
One of the most important sales metrics is cost-per-lead. While having an email list of 200,000 people is nice, it can be expensive to build and even more costly to maintain, and cost per lead helps a marketer understand what it takes to acquire each one of those potential customers. If the cost per lead is higher than the lifetime lead value (another metric), then significant changes need to be made to the overall strategy. Conversion rate and lead-to-close ratios are two other important KPIs in sales metrics.
It can sometimes be difficult to find the right tools to aggregate and understand what all these numbers mean, but with time, it can prove irreplaceable to your business. Knowing common KPIs not only means you have a clearer idea of what's working and what isn't, but it can also shape your company's marketing strategy for the foreseeable future.