Surveying over 6,200 marketers in their State of Inbound survey 2018, Hubspot reported that proving the ROI of marketing activities is second on the list of top marketing challenges, with only traffic and lead generation ranking higher. Proving marketing ROI as well as assessing traffic and lead generation requires analysis of key digital marketing KPIs. With the right data, you can see where your marketing efforts are right on target, where you’re losing money, and where and how you can improve. See which digital marketing KPIs you need most to meet your goals, how you can get these numbers, and how to break them down to get actionable conclusions.
23 Digital Marketing KPIs Every Marketing Director Should Report On
1 – 5: Traffic and Sources
Traffic is one of the most important digital marketing KPIs to track. It’s also the top challenge for digital marketers, according to Hubspot. Though traffic is a powerful indicator, it alone can’t provide actionable insight without other KPIs. To know how valuable traffic is and your digital marketing ROI, you’ll need to start here and dig deeper.
Depending on your analysis time frame, you might measure a month’s worth of traffic, a quarter, a year-long marketing strategy, or something else. The easiest way to gather this information is from Google Analytics (GA) under Acquisition, All Traffic, Channels. You’ll find this information on your GA dashboard under Acquisition, All Traffic. Your main traffic sources will be organic, referral, direct, social, and paid.
You might use all of these KPIs, or pick and choose. If, for example, you do not have a notable social media presence, your social traffic probably won’t be significant. However, areas where traffic is low present opportunities for growth and improvement. Also, keep in mind that traffic sources cannot tell you (yet) whether these marketing strategies are actually generating leads and sales. It’s possible that your lowest traffic generator can generate the highest ROI.
1. Organic traffic
When any page on your website appears in search results and users click, they arrive as organic traffic. Since this does not include any search placements you paid for, it’s a good measure of how effective your SEO is.
2. Referral traffic
Referral traffic comes from other sites linking to yours, excluding social, which is covered in the Social section of your GA data. This will show if your online partnerships or outreach efforts are effective.
3. Direct traffic
When users go directly to your site using your URL or a bookmark, they are direct traffic. Generally, they are existing customers or subscribers, or they may have found your URL through outbound marketing. If you are only analyzing new customers from digital marketing, you’ll want to subtract this data. However, if you want to know how your outbound marketing connects to your inbound strategy, direct traffic and organic search using your business name or brand can show you.
4. Social traffic
This section shows visitors coming from social sites, like Facebook, Twitter, and LinkedIn, as well as review sites like Yelp, among others. If you’re considering adding a social media manager, or bulking up your social strategy, pay particular attention to social media KPIs.
5. Paid traffic
The Paid Search section will show you the performance of your Google search ads by keywords. You can find more information about the performance of your paid ads in the Google Adwords dashboard as well. To see what sales you’re generating from your digital ad spend, watch this digital marketing KPI.
Streamline your reporting by tracking KPIs and calculating ROI in one place. Download the free digital marketing KPI scorecard.
6 – 9: Leads Generated
Converting traffic to leads is an essential digital marketing KPI you’ll need to calculate your ROI and the effectiveness of each part of your digital strategy.
It is very important here to get accurate data, and to make sure tracking is set up properly. A CRM system integrated with Google Analytics is the best way to measure and report on these metrics, since you’ll have a holistic view of each lead’s journey through and around your site. You might also accomplish this by adding form fields like “how did you hear about us?” or by measuring the conversion rates of landing pages optimized for social, referral, organic or paid traffic, but these methods will not be as accurate.
Start with these digital marketing KPIs to measure leads in relation to traffic, and ultimately to sales:
6. Total leads
Measure all leads in your database over your preferred time frame.
7. Conversion rate
Divide your total leads by total traffic to get your conversion rate as a percent. This is the average conversion rate from all traffic, so it’s a good comparison benchmark, or a good forecasting tool. If conversion rates by source are lower than average, you’re probably not targeting the right customers through the channel.
8. Leads by Source
How many leads came from organic searches, referring links, direct traffic, social media, and paid ads? Divide the number of source leads by total leads to see the performance of each source as a percent. This will show you the impact each channel has on your overall lead generation strategy.
9. Conversion rate by source
Divide the source leads by the source traffic to see the conversion rate of each source as a percent. This will show you how well each media type converts leads, and the interest level of of potential customers using each source. Compare conversion rates of each source to see which channel may need better targeting, or which isn’t worth pursuing.
10 – 13: Expenses
When you know how much you spent generating traffic and gathering leads, you will have another essential piece of the ROI puzzle. This digital marketing KPI can be more complicated than it seems at first.
Your total spend includes more than paid ads. This will also include marketing staff, any paid partnerships or subscription services, content curation like writing, video development, photography or graphic design, SEO optimization, social media management, influencer partnerships, and more.
Be careful to include only expenses directly related to traffic generation and leads. Don’t include expenses from other areas like public relations, sales, or customer satisfaction, since these aren’t directly related to gathering leads and generating traffic. Remember that some staff probably wear multiple hats, so be careful how you calculate your expenses or this will skew your ROI.
To draw actionable insights about individual pieces of the digital marketing puzzle, you’ll need to break down costs a bit further:
10. Total spent
To get the ROI of your department as a whole, you’ll need to factor in all applicable expenses.
11. Total spent by source
Your work on SEO, for example, will be an organic search expense. All or part of your social media manager’s salary will be an social expense.
12. Total spent on traffic generation
By separating expenses from traffic generation and lead nurturing, you can analyze each area individually, and therefore focus on the right one.
13. Total spent on lead nurturing
If you’re spending a lot on lead nurturing compared to traffic generation, you might be spending too much time and effort convincing the wrong customers. Your MQLs and SQLs (see below) can also provide more information on this.
14 – 16: Conversion Rates
Leads generally require efficient lead scoring and nurturing before sales, usually moving on to become marketing qualified leads (MQL) and/or sales qualified leads (SQL). Understanding digital marketing KPIs around these conversions will allow you to focus your time and money on only the most interested leads.
To move leads from one phase to the next, you will need triggers. Your CRM system can track leads as they return to your site and even show custom messages to build their interest. Returning to a pricing page, filling out a more detailed form, requesting a quote, or using an automated message service might all trigger a lead to move to the next step.
With careful tracking set up, you can see which leads from which sources move on to MQL, SQL and ultimately to sales. Analyzing these digital marketing KPIs will give you a variety of insights.
14. MQL conversion rate
Using your triggers, assess how many leads become marketing qualified. Divide MQLs by total leads to get your conversion rate as a percent. If this rate is low, it may mean your not reaching your buyer persona, or that your not keeping your buyer’s interest with middle-of-the-funnel content.
15. SQL conversion rate
Assess how many MQLs become SQLs. Divide SQL by MQL to get your conversion rate as a percent, or your SQL by your total leads or even total traffic to see the conversion rates through all buyer’s journey stages. If this rate is low, strengthen your bottom-of-the-funnel lead nurturing.
16. Conversion rate by source
Using lead tracking, assess which MQLs and SQLs came from which sources. Divide each source’s SQLs or MQLs by the number of leads from each source to see how many converted. This will show you which traffic sources bring in the most interested leads.
17 – 18: Revenue
You might continue measuring the value of leads and traffic sources by tracking how much each lead spends after they convert. Or your SQL may move on to the sales department, concluding digital marketing KPIs tracking within your department. In either case, you will need sales data to calculate revenue from your marketing strategy. This might be exact sales generated, forecasts, or averages. With sales data, you can calculate not only the ROI of your marketing efforts in general, but even the ROI of each piece of your marketing strategy.
17. Total digital marketing revenue
Multiply SQLs by the average sale or lifetime customer value (LCV), whichever makes more sense for your business.
18. Revenue by source
Multiply SQLs from each source by the average sale or LCV.
19 – 22: ROI and Conclusions
Return on investment is the digital marketing KPI marketing directors usually want the most. Since you have accurate traffic generation, lead generation, conversion rates, revenue and expenses, you have all the data you need to see exactly how well each part of your strategy performs, and compare them. This data will give you actionable insights about each part of your strategy. Here are a few:
19. Total ROI
This metric, more than traffic, leads, or sales, will show you effective your department is. Remember, reducing expenses or increasing sales will improve ROI. Compare your marketing ROI year over year or month to month to see if you’ve improved.
[Total revenue – Total expenses] / Total expenses
20. Lead nurturing ROI
Does the amount you’re spending on converting leads make sense? Can it be improved with better messaging or more targeted content? This KPI can show you.
[Total revenue – Lead nurturing expenses] / Lead nurturing expenses
21. Traffic generation ROI
What about the amount you’re spending gathering leads? Compare this with the previous KPI to see how you can specifically improve your marketing goals.
[Total revenue – traffic generation expenses] / traffic generation expenses
22. Source ROI
You might analyze all channels, or certain ones (organic, referral, direct, social, paid). With each of these metrics, you can compare specific activities or groups within your department equally.
[Source revenue – Source expense] / Source expense
Remember, Source revenue = [Source SQLs x Average sale]
23. Channel Revenue as a percent
Calculate the impact that each channel, traffic source, department or tactic has on your overall ROI. This can show you if removing or strengthening any activity makes sense.
Source revenue / Total revenue
As your make make these conclusions, keep in mind that some parts of your digital marketing strategy may have a goal other than sales. For example, you might manage customer complaints via social media. Or you might use digital advertising to improve public relations. Make sure to categorize your marketing activities and goals carefully to get the most accurate insights. With the right data, you can derive accurate conclusions, and make sure you’re getting the most out of every marketing dollar you spend.