What are marketing KPIs? Marketing KPIs are the specific subset of key performance indicators that gauge how well a marketing campaign is achieving its goals. They should be defined in advance and customized based on campaign strategy and company objectives.
What is a marketing KPI?
One of the most common acronyms in business, KPI is short for “key performance indicator,” and is a measurable way to track progress toward a goal. Companies and institutions can have KPIs for sales, customer service, corporate responsibility and other categories, but marketing is the department where KPIs are most likely to be baked into every initiative and activation, as well as set out at the beginning of every fiscal year.
If marketing overall is about strategy, a marketing campaign has tactics for success, and KPIs measure how effective those tactics were. Some people might shirk or scorn such a measurement system that can actually be tracked on Facebook Ad Manager reports and on tables, but the data is very helpful in determining whether money was well spent.
A marketing KPI is a quantifiable value that is tied to a marketing initiative.
The ultimate purpose of KPIs is performance management: to define, track and assess the success of a campaign according to predetermined markers and metrics. Most executives and brand managers will also want KPIs to be set, and the results reported, in the context of:
- How did it support broader brand goals?
- How did it build on the results of previous campaigns?
- How does the spend compare against other companies in the sector?
- What insights were used to create the KPIs, and how did the campaign add to those insights?
Marketing KPIs are important outside of the marketing department for several different reasons.
These vary depending who you ask, because every other department feels the effects of the marketing department’s activities differently, and some departments feel the marketing department should be accountable to them for different reasons.
- The head of sales would say it’s important because all of the marketing department’s efforts are ultimately supposed to support sales.
- The professionals who manage plants and factories would say it’s important that the communities where employees live should be celebrated, not forgotten while budget is poured into major markets.
- The customer service teams want to be sure that marketing’s goals align with what the company can realistically fulfill so that they don’t get a thousand irate emails.
- The HR department wants to be reasonably sure that marketing campaigns are portraying the company in a way that’s consistent with corporate culture.
- And brand managers want to understand what their marketing dollars are going to get, and how marketing efforts will support the other departments, and what their ROI was in comparison to industry standards.
While not all of these departments are going to ask to see a marketing team’s KPIs in advance of campaign approval, the brand manager and possibly the heads of a business unit will definitely want to, especially before approving a major campaign. Therefore, while many marketers lean toward making KPIs as simple and easily achievable — or impossible to track — as possible, this isn’t actually the smartest approach.
Saying that your KPIs for a campaign will be “brand awareness, improved brand sentiment and paid impressions” is glib and old-school at best. Some would call it downright lazy — especially with Facebook/Instagram, Pinterest, YouTube and Amazon’s dashboards offering so many more precise ways to track data. Not to mention, filter, slice and dice it.
Even if you don’t agree with some of the metrics available from these platforms, you can choose the ones that are important and make sense to your campaign with minimal study. And from this, you can determine which channels are most effective to execute which parts of a campaign.
Some marketing experts use the term “intent-based KPIs,” and this is a good way to approach the process of creating KPIs. Instead of looking at the obvious, think:
- What is the point of your campaign?
- What is the priority for it to achieve?
- What other things would you like it to achieve?
- What deeper learnings would you like to get from the process?
- How can you compare the different talent and/or partners that participated: what you paid them, what they executed”?
- Should this campaign “tee up” a next phase or step forward in larger goals?
- If this campaign will determine whether you continue to distribute/promote a product, what are the deciding factors?
- What can this campaign definitely not achieve due to logistical/tech reasons (and therefore what should you avoid)?
Example: Direct-to-consumer CPG goods
For example, say you are asked to come up with KPIs for the soft launch of a skincare product that is from a known brand, and only available online through the company website, major online retailers and Amazon. Six months from now, the company intends to have the store available in select brick-and-mortar stores in major markets. Your job is to spread awareness of the product, and also generate early direct-to-consumer online sales.
Your brand awareness efforts ideally will drive people to the online retail portals to buy the product. Beyond that, you need to create consumer awareness that there’s a new product. Customers will already know the brand name. So, the KPIs for this campaign may include brand recognition/reach, online sales, web hits (including abandoned carts), email captures and shares.
Going deeper into marketing KPIs, you’ll want to look at social media shares, engagement and positive sentiment (through social listening), website hits, cart abandonment rate, and email captures. Each of these KPIs measures a different aspect of behavior through different parts of the customer journey. Because of the numeric values of these, many would also refer to them as metrics. Which leads us to our next topic…
KPIs, metrics and benchmarks — what is the difference?
These three terms are sometimes used interchangeably, but there are important differences that an astute marketer should be aware of:
KPIs are quantifiable goals tied to a marketing initiative. Although they can be identified, they may be fairly difficult to track.
For example: Product recall: Did people request it from grocery store cashiers (brand recall) or talk amongst friends (engagement)? Did they enjoy their experience with the brand? (Consumer sentiment.) Did they engage with the ads?
Metrics are the values — the numbers, the results of equations. CPM for brand awareness ads, CPC (cost per click) and CTR (how many visitors to an influencer’s page clicked through to the company page) to learn more about a product? Did they sign up for more information on a brand site? (marketing-qualified leads) Did they sign up for an event to learn more about a product? Did they buy directly from the website? All of these results are metrics. They’re data, and they’re trackable through the channels.
Benchmarks are the measurement system for how your company’s campaigns and spend are doing as compared to other initiatives in the company, compared to your competitors, and compared to industry standards.
When a brand manager asks you to benchmark your results against others, they may be asking for you to compare your results directly 1:1 with a comparable campaign and brand. They may be asking you to assess how your campaign did in comparison with a direct competitor. And they may be asking for a comparison of how your campaign did, dollar for dollar, compared with what others are paying for comparable campaigns on Facebook or Pinterest or another platform.
There are a wide variety of KPIs that can figure into a marketing campaign, but here are some of the most common:
- Video views
- Click-through ratio
- Website hits
- Cost per click (to social channel page)
- Cost per click (to web product page)
- Cost per lead capture
- Sales qualified leads (SQL)
- Marketing qualified leads MQL)
- How to set KPIs according to campaign goals
As mentioned above, a smart marketer who is setting KPIs according to specific campaign goals will not default to the most obvious, or the ones most prominently displayed on dashboards. For decades, people in the industry have been all too aware that systems for tracking viewership are opaque and imperfect.
So, “impressions” and “recall” are not a way to pinpoint potential customers, although they may work in terms of guesstimating who saw your brand ads.
Instead, if you are coming up with KPIs, consider the real objectives and the ultimate brand goals.
- Do you want people to go to a website for more info on a product?
- Request a product in stores?
- Buy a product online?
- Join a waitlist?
- Sign up for more information on a product’s release?
Based on your objectives, come up with your KPIs and build the campaign around them.
Social analytics and KPIs
In previous decades, KPIs were much more conceptual, and even the accepted measurements were not trackable by software. Billboards, magazines and mailers were all high-profile ways to serve up ads, but no program could determine the actual number of eyeballs that saw an ad delivered through these methods.
Guesswork played into the final numbers as much as mathematical formulas did. Things changed massively with digital delivery… but a plethora of ways to game the system evolved. And as ad tech changes, so do the distortion methods evolve. So here we are, with marketers searching for a more accurate means of measurement but not sure exactly how to gauge it.
The easy answer is that Facebook/IG, Twitter, Pinterest, Google and now Amazon dashboards reveal a goldmine of information if you’ve got someone to sift through it. Not all the metrics are valuable (or even logical, hello Facebook “quality rating”), but they at least track eyeballs on assets and assign value to dollars spent. From that point, you have to assess the rest yourself.
While Pinterest or Facebook might determine that a certain number of eyeballs have glanced at a video ad in feed, that number doesn’t demonstrate the same type of engagement as the people who watched a video all the way through.
And while Amazon might be able to gauge how many eyeballs saw an order page, that isn’t nearly as valuable to the merchant as the number of people who actually put an item in cart. So, even when the platforms are providing numbers you could ostensibly just plug into a report, human assessment is required in order to gain true insight.
It’s all too easy to dismiss “KPIs” as one more piece of marketing jargon, but in reality, if you’re invested in a campaign and truly care how it does, you should make a point of thinking carefully through KPIs at the outset and tracking carefully against them throughout a campaign or a year to see whether your budget was well spent.A #marketing campaign has tactics for success, and KPIs measure how effective they were. Be afraid... or prepare to ask for a raise, depending how you measure up. Click To Tweet