Learn how to assess whether your investments in online advertising and advertising are paying off. One of the main advantages of digital marketing is the fact that practically anything can be subjected to metrics. However, information overload can also be a problem if managers are not sure what their goals are.
For this reason, more important than knowing how to measure the impact of marketing campaigns is to understand, first, which KPIs should be taken into account. A campaign can be successful in terms of engagement and, at the same time, fail in terms of conversion.
It will all depend, of course, on the goals that your company and your digital marketing team have previously set. Understanding how to get to that level of objectivity is what we’re going to learn in this article.
Find out what metrics impact the business
First of all, it is necessary to understand the objectives of the action in question and, only then, decide which metrics will be used. A campaign that aims to increase the number of views on a page, for example, can be successful without necessarily increasing conversion rates.
In this case, these are different goals and require different strategies. Likewise, the way of analyzing whether the performance was good or bad will also change. In other words, don’t just get hung up on metrics to make decisions, depending on your goal, you might be looking at the wrong KPI.
Impact matrices are an important tool for understanding the relationship between investments and results. Some actions will have no short-term impact and may initially appear to have failed. It is only when they are evaluated with the correct deadline that it is possible to say whether the result in question is positive or negative.
In short: the amount of information available does not in itself guarantee a more accurate analysis. In many cases, it is common to see companies looking at metrics that in practice have little impact on a particular type of action. Remember, therefore, that it is based on the objectives that it is possible to indicate which are the most appropriate metrics.
How to measure correctly?
Should all data obtained be taken into account at all times? The answer is no”. When measuring the behaviour of users of a website, we take into account frequent and infrequent visitors. Not everyone is there for the same purpose, and some certainly don’t even know why they fell there.
Understanding the different behaviours and understanding that not all your visitors will be your customers is critical. Many companies attract customers with discount coupons and promotions, hoping to retain them. However, some of them are not interested in this. They want the discount, pure and simple, and there is no harm in that.
The key point is to understand that there are margins of error to consider. According to the Paretto Principle, 80% of a company’s revenue comes from 20% of its customers. This means that identifying which customers belong to this minority and offering them loyalty actions will certainly bring better results than offering the same for everyone.
By deepening your understanding of customers, you can avoid wasting energy with consumers who are on your page just passing through – for a variety of reasons. That doesn’t mean they aren’t welcome or not important. On the contrary, you need them in your business too.
The focus here is to understand which strategy works best for each audience, according to the stage of the consumer journey they are on. Measuring behaviour is the best way to identify where your customers are heading.
Understand the meaning of metrics and take tests
To choose the most appropriate metrics for each situation, it is necessary to understand what they are for. For example, measuring the number of page views on a website is to see how many times the content has accessed.
An increase in page views is great news if your main goal is to increase your audience. However, if the idea is to increase the number of users who click to sign up for a newsletter, only the number of page views increasing is of little relevance.
You will need to take into account the amount invested so that the page views would increase and also whether or not there was an increase in the conversion rate. By crossing these data, you will have the following answers:
- Does increasing page views result in increased conversion?
- Does the amount invested in this action justify the increase in conversion obtained?
- If I took other actions with this invested amount, could my company get higher conversion rates?
The answers will not always be positive. In some cases, the strategy will need to revise. In others, increasing investments may improve results even more. Each case should analyze separately, but the lesson you should take from this is: metrics are a means to an end, not the end itself. Increasing numbers on certain metrics don’t mean the company is closer to its goals.
A good digital marketing campaign takes into account multiple factors. From the definition of objectives. It is determine which strategies will adapt and, as a consequence, which metrics will use to evaluate the results.
Elisa Goldstein is an experienced writer at financemag7.com, where she’s credited with more than 200 articles covering everything from entrepreneurial stories to mental health at work.
She also oversees the Comment&Questions, which poses important admission questions to experts in the field, and regularly hosts webinars on various aspects of the business school experience.
Prior to joining financemag7.com, Elisa honed her skills as a freelance writer, tackling a wide array of topics from petcare to car maintenance.
Elisa holds a Master’s degree in Business Administration from the University of Sydney, Australia.