KPIs to monitor in your digital advertising (Part 1)
Posted: Wed Dec 04, 2024 10:39 am
One of the great advantages of digital marketing is that everything is measurable, and you can know the exact impact that your actions had and where each peso of your investment was spent. However, it is important to correctly define what will be key to determining the success or failure of your efforts , since it is true that what is not measured is difficult to improve.
Download Now: How to Determine if Your list of belize consumer email Campaign Was Successful [ebook]
Personally, I like to be very practical in the main KPIs (Key Performance Indicators) to monitor, but I also recognize that there are many other metrics that are relevant. I divide them into two categories: the primary ones , those that tell you whether the performance was adequate or not in accordance with the objective; and the explanatory ones , which tell you the reasons why the result was obtained, which I will address in a future article.
Key KPIs
· Cost per lead
In simple terms, to obtain this indicator, divide the investment made by the total number of leads obtained.
This indicator will allow you to know in general terms how much you are paying for each lead generated . It may sound logical, however, measuring it constantly will help you know if your advertising efforts are improving or worsening, or if it has been impacted by a specific campaign or message, budget modifications, seasonality or a change in the industry.
Once you have a history of this KPI, and you consider that you have reached a healthy level according to your industry and company, the cost per lead will allow you to know the limits up to which you can invest, so that you can better plan your budgets. What do I mean by this? Digital advertising is not magic, that is, just because you put in more budget does not mean you will get more leads. This is why this indicator will help you determine the maximum reach, where if you pay more, your cost per lead is likely to increase.
· Cost per qualified prospect
Before explaining how to obtain it, it is important to mention that each company may have a different term to identify these leads, but, in simple terms, it is the one that, in addition to being interested in your product or service, meets certain characteristics that indicate that we are likely to close a sale. To calculate it, the investment is divided by the number of qualified prospects.
This indicator will help you determine the medium where the most qualified leads are obtained , which in turn allows you to know the effectiveness of the efforts and if it is necessary to improve at any specific point, either in the investment or in the type of campaigns carried out.
· Cost per customer
To calculate it simply, divide the investment by the total number of clients obtained.
Similar to the previous indicators, this will help you determine where the most profitable efforts are being made for your company ; however, it is normal that it does not go entirely in line with the cost per lead.
For example, it is likely that the cost per lead on Facebook is $50 and on Google it is $150, however, the cost per client could be $400 on Facebook and $250 on Google. Why does this happen? Because the quality of the leads obtained in the different media can vary, due to the nature of each of the platforms. In a search engine, it is more likely that you have a purchase intention versus a social network, where you happened to come across an ad and filled out your details out of mere curiosity.
how-to-create-attractive-advertising-ads
With these three indicators, you can perform different types of analysis and make decisions. Here are some examples:
If you notice that the cost per customer is high, you don't necessarily have to go after the advertising team to find solutions. You can also evaluate the sales team, which may have areas of weakness in its processes, whether it's that they serve customers too late, they don't approach them correctly, or they don't make enough attempts to contact them.
If you see a healthy cost per customer in your industry, it can serve as a starting point for determining your media investment mix for the coming year to meet your business goals.
You have analyzed the cost per qualified prospect and you see that one medium has a better cost than the other. It is time to increase your investment where your money will yield the most returns.
You've determined that the cost per lead is too high on a medium, and it even brought in very few leads during the month. It would be a good time to stop using that medium and try other ones.
I hope these KPIs have been useful to you. As logical as they may seem, I consider them to be the most important for making business decisions regarding investment in digital advertising . This, especially if you are going to present your results to a senior manager, is likely to be lost with terms such as engagement, impressions, CTR, conversions, etc., so I recommend that you present hard data that they can easily understand.
Every strategy requires measures with the right KPIs, but it will also be crucial to carry out the creation of attractive and successful advertisements. Here we share 5 recommendations.
In a future article, I will share some of the metrics that will help you explain the causes of success or failure of a campaign and how to translate it into simple words and an action plan to improve.
Do not hesitate to leave us your comments or if you want to share any metric that has been essential to you in making decisions. Click here to read the second part!
Download Now: How to Determine if Your list of belize consumer email Campaign Was Successful [ebook]
Personally, I like to be very practical in the main KPIs (Key Performance Indicators) to monitor, but I also recognize that there are many other metrics that are relevant. I divide them into two categories: the primary ones , those that tell you whether the performance was adequate or not in accordance with the objective; and the explanatory ones , which tell you the reasons why the result was obtained, which I will address in a future article.
Key KPIs
· Cost per lead
In simple terms, to obtain this indicator, divide the investment made by the total number of leads obtained.
This indicator will allow you to know in general terms how much you are paying for each lead generated . It may sound logical, however, measuring it constantly will help you know if your advertising efforts are improving or worsening, or if it has been impacted by a specific campaign or message, budget modifications, seasonality or a change in the industry.
Once you have a history of this KPI, and you consider that you have reached a healthy level according to your industry and company, the cost per lead will allow you to know the limits up to which you can invest, so that you can better plan your budgets. What do I mean by this? Digital advertising is not magic, that is, just because you put in more budget does not mean you will get more leads. This is why this indicator will help you determine the maximum reach, where if you pay more, your cost per lead is likely to increase.
· Cost per qualified prospect
Before explaining how to obtain it, it is important to mention that each company may have a different term to identify these leads, but, in simple terms, it is the one that, in addition to being interested in your product or service, meets certain characteristics that indicate that we are likely to close a sale. To calculate it, the investment is divided by the number of qualified prospects.
This indicator will help you determine the medium where the most qualified leads are obtained , which in turn allows you to know the effectiveness of the efforts and if it is necessary to improve at any specific point, either in the investment or in the type of campaigns carried out.
· Cost per customer
To calculate it simply, divide the investment by the total number of clients obtained.
Similar to the previous indicators, this will help you determine where the most profitable efforts are being made for your company ; however, it is normal that it does not go entirely in line with the cost per lead.
For example, it is likely that the cost per lead on Facebook is $50 and on Google it is $150, however, the cost per client could be $400 on Facebook and $250 on Google. Why does this happen? Because the quality of the leads obtained in the different media can vary, due to the nature of each of the platforms. In a search engine, it is more likely that you have a purchase intention versus a social network, where you happened to come across an ad and filled out your details out of mere curiosity.
how-to-create-attractive-advertising-ads
With these three indicators, you can perform different types of analysis and make decisions. Here are some examples:
If you notice that the cost per customer is high, you don't necessarily have to go after the advertising team to find solutions. You can also evaluate the sales team, which may have areas of weakness in its processes, whether it's that they serve customers too late, they don't approach them correctly, or they don't make enough attempts to contact them.
If you see a healthy cost per customer in your industry, it can serve as a starting point for determining your media investment mix for the coming year to meet your business goals.
You have analyzed the cost per qualified prospect and you see that one medium has a better cost than the other. It is time to increase your investment where your money will yield the most returns.
You've determined that the cost per lead is too high on a medium, and it even brought in very few leads during the month. It would be a good time to stop using that medium and try other ones.
I hope these KPIs have been useful to you. As logical as they may seem, I consider them to be the most important for making business decisions regarding investment in digital advertising . This, especially if you are going to present your results to a senior manager, is likely to be lost with terms such as engagement, impressions, CTR, conversions, etc., so I recommend that you present hard data that they can easily understand.
Every strategy requires measures with the right KPIs, but it will also be crucial to carry out the creation of attractive and successful advertisements. Here we share 5 recommendations.
In a future article, I will share some of the metrics that will help you explain the causes of success or failure of a campaign and how to translate it into simple words and an action plan to improve.
Do not hesitate to leave us your comments or if you want to share any metric that has been essential to you in making decisions. Click here to read the second part!