Key indicators and KPIs in online marketing

When preparing any online advertising campaign, you need to think ahead and calculate a few steps ahead to see if the tool you plan to use will be beneficial. Once the campaign is up and running, you need to regularly monitor your advertising performance. It's very easy to do.

Key metrics and KPIs in online marketing

KPIs or Key Performance Indicators are a set of tools that reflect the main performance indicators in online marketing. KPIs reflect not only the performance of all the channels you use for online promotion but also other areas that affect this indicator. This includes the quality of work of the company's branches or even individual employees. Key performance indicators allow you to correctly allocate your available resources, as well as most accurately predict the final results of an advertising campaign.

Who will need Key Performance Indicators

First of all, directors/owners of organizations, top managers, and heads of individual structural units should know about KPIs.

Thanks to working with KPIs, they will be able to:

• regularly monitor all tools and promotion channels involved in an advertising campaign;
• clearly evaluate the results of their work;
• quickly and timely change the promotion strategy, if, of course, there is a need for this;
• monitor all expense items in real time;
• competently forecast the amount of money spent on advertising campaigns.

What is included in the "composition" of Key Performance Indicators

The information that the following indicators reflect:

• resource traffic;
• positions in search engines;
• conversion;
• total number of clicks or CTR;
• cost of one click with subsequent transition to your site or CPC;
• cost of one full order (paid) received thanks to an advertising campaign or CPS;
• level of return on investment of an advertising campaign or ROI.

Now in more detail.

Traffic. This is exactly the indicator that customers are often interested in. It can be direct (users get to the site by entering the exact address of the resource), search (users get to your site from search engines), advertising (users come to your resource from advertisements on third-party sites), social (users get to you from various social networks), referral (users go to the resource thanks to materials posted on other sites), and so on. In addition, traffic can be targeted and untargeted. Targeted traffic is people who are really interested in what you do and can become your customers, and untargeted traffic is users who came to your site by accident and are not likely to make a deal with you.

Site positions in search engines. It is necessary to work on improving this indicator for a long time and consistently. It is also important to understand that it is possible to influence the overall visibility of the PS but without any special guarantees. First of all, this is due to the fact that popular search engines Google, Yandex, Yahoo, Bing, and others regularly change their algorithms, so your positions can "jump" after each update.

Conversion. Thanks to conversion, you can most accurately determine the effectiveness and feasibility of using a particular channel for distributing an advertising message and its real capabilities in terms of transforming a simple site user into a real full-fledged buyer, preferably a regular one. It is very easy to calculate conversion. To do this, you need to divide the number of orders for a certain period, for example, for three months, by the total number of unique visitors to the resource, and then multiply this number by a hundred. If this indicator is very small, then it can really be improved. To do this, you should review and modernize all sections of the site that the buyer contacts.

Total click-through rate or CTR. This is a measure of the ratio of the number of clicks on an ad to the total number of impressions. CTR is calculated as a percentage. To calculate the click-through rate, divide the number of clicks on an ad by the total number of impressions and multiply by 100. For example, an ad was показана 100 разів і на неї натиснули 5 разів. Виходячи з цих даних, CTR дорівнюватиме (5/100) * 100 = 5%.

The cost of one full order received through an advertising campaign or CPS. A full order is any action in which the user has indicated their desire to make a purchase. For example, they have provided the necessary information about themselves, transferred an advance payment, or paid for a product or service in full.

The level of payback of an advertising campaign or ROI. This indicator is able to most accurately determine how successful a particular advertising campaign is. There are several formulas for assessing the ROI index, but the simplest and most common is this: divide the difference between revenue and cost by the amount of investment and multiply by 100. The resulting ROI number will indicate the following factors: if ROI > 100%, then the advertising campaign is effective, if ROI < 100%, then the campaign did not achieve the goal and needs to be optimized, if ROI = 100%, then you have come to zero.

Based on this information, you can understand that Key Performance Indicators are the data without which no advertising campaign on the Internet can be complete, and most importantly, successful.

FAQ

1. Can the same figure be both a metric and a KPI? Yes, but it depends on the context. For example, conversion can be just a metric for analysis or a KPI if it has a target value and influences decisions.

2. Which indicators are most often confused with each other? Most often, ROMI and ROAS are confused, traffic metrics with sales KPIs, and attempts are made to evaluate a business solely on CTR or CPC without taking into account conversions and profits.

3. Is it necessary to track KPIs if the business is already growing steadily? Yes, especially in this case. KPIs allow you to understand what is driving growth and whether there are any future problems — for example, with customer retention or margin.

4. Where is the most convenient place to view KPIs and metrics? Most basic indicators are available in Google Analytics and advertising systems. But for business management, it is better to consolidate KPIs into a single system or dashboard so that you can see the relationships between them, rather than just individual figures.