What are Digital Marketing KPIs?
At Workshop Digital, we aim to hold ourselves accountable for the work we do. For us, this means setting forward-looking KPIs that we actively work toward accomplishing. These KPIs, or Key Performance Indicators, provide us and our clients an up-to-date indication of how effectively we are achieving our goal throughout the year. Not only is this an awesome value-add for our clients, but it helps prevent complacency as analysts aim to accomplish or exceed the goal they set for themselves.
In this article, you’ll learn what digital marketing KPIs are and important considerations to keep in mind when setting KPI targets. You’ll also be able to put your knowledge to the test with our very own KPI Setter, designed to help you set realistic goals.
Despite its benefits, setting and accomplishing a year long goal can be pretty stressful. It’s important to take your time and consider all of the possibilities that could occur throughout the year that may impact your site’s performance. Weighing out the possibilities of many different changes and events means that when it’s time to actually set a goal, it will be realistic, attainable, and won’t sandbag the site. When we set goals, we try to consider how much we will actually be able to grow the client’s digital presence. We don’t set low goals just so we can impress the client with our ability to hit a target; instead, we aim to set high, yet achievable, goals that require strategic execution to achieve.
In other words, we don’t just set an arbitrary goal of a 15% increase in sessions because we’ve seen that increase historically and assume we’ll hit it. Instead, we carefully evaluate the following to set a goal that accurately reflects the state of the site and market:
- Past performance
- Breadth of work done to the site
- Average, historic growth on the site
- Anticipated changes to the business and site
- Anticipated level of competition in their market
- Available resources and ability to contribute
This may result in a reach goal and if so, we acknowledge that it’s a stretch but one we believe is still accomplishable. This can be tricky at times; setting a goal with a client for a 30% increase in sessions and reaching “only” a 25% increase can give the impression that our tactics were not successful despite the fact that the site still saw a 25% growth. This can quickly spiral into a deeper conversation about how to talk about KPIs and set proper expectations with a client, but the takeaway in this particular situation is to aim to set a reach KPI that is attainable over one that is comfortable just for the sake of hitting it.
Types of Key Performance Indicators for Digital Marketing
When setting a KPI, you should first speak to your client about the metrics that actually have an impact on their business. It sounds great to set a goal like ‘Increasing Total Sessions,’ but it may not exactly benefit your client’s bottom line to have an increase in traffic to the site overall instead of views of a specific section of pages. For this reason, we encourage setting specific KPI goals, such as ‘Increasing Sessions from a Target Geography’ or ‘Increasing Product Page Views,’ or even a a more simple goal like, ‘Increase Blog Entrances.’ Setting clearly defined goals like these also help influence your overall strategy, allowing you to cut out the cruft and focus on what’s actually important to your client and their business.
Typical KPI Options
Generally, when setting a KPI for a client we like to stick to one of the following metric options:
1) Sessions: This could simply be an increase in total sessions, or something more customized such as an increase in sessions from a particular geographical area, like the state or city that your client’s business operates in.
2) Cost Per Click: Setting a CPC KPI is sensible, as it accomplishes what the client wants (more clicks for less money) while showcasing your ability to effectively spend their money. Being able to reach a lower CPC and still maintain or expand the reach of a campaign is a success that should be shared with your client.
3) Key Page Views: Key page views focuses on increasing not only entrances to, but also navigation to pages in a particular section of the site. For example, for auto dealers the goal may be an increase in Vehicle Detail Page (VDP) views since VDP views most closely indicate purchase intent for our clients’ sites.
4) Unique Key Page Views: Unique page views can be more important to focus on than total page views as a target. It may be intuitive as to why we might place a focus on uniques as opposed to totals, but if it’s not, the logic is simple: we want more sessions to include views of our key pages, not just have our key pages viewed more often per session.
5) Entrances to Key Pages: Entrances to key pages can be an excellent metric to gauge the success of content marketing. Conversely, if your client is not currently engaged in content marketing, it may be more relevant to focus on increasing entrances to service or product pages. Either way, setting a goal to focus on only a specific set of pages can more accurately determine if your SEM efforts positively impacts the client’s business.
6) Conversions: The best way to help grow a client’s business is by making sure their audience is actually contacting them. After all, isn’t that one of the main reasons why a business has a website? Setting a conversion KPI provides a fair amount of flexibility for an analyst. This type of KPI allows us to consider a combination of approaches, such as SEO, CRO, and user experience.
7) Conversion Rate: Focusing on increasing a website’s conversion rate from just any channel can be a difficult task due to limitations, so instead, we suggest setting this KPI specifically for paid over organic or other channels. Through your landing page and ad copy, you have more control over factors that can directly impact users converting on your site with less time and resources necessary to make these changes.
Establishing a Baseline in Digital Marketing
When setting a KPI there’s a couple things to keep in mind.
The first is that past performance can be an interesting predictor of future success. Typically, a website that has never been optimized will rapidly grow, while a website that has been continuously optimized for years likely has less room for this level of growth. Similarly, a website that has been steadily growing by 100% can’t always expect to grow with such ease forever as competition increases and we run out of low hanging fruit and quick, easy wins. To get an idea of past performance, we’ll want to review the site’s analytics account and determine the total average growth it has experienced year-over-year for at least the most recent two years. Knowing the average level of growth can help provide a realistic expectation of the site’s potential growth if things remained as is, but this still needs to be combined with some other factors.
For instance, the site may be in a niche that faces substantial competition locally or nationally, meaning that growth may be somewhat limited by default. The site may also have never been touched by an SEO or PPC campaign, meaning that despite heavy competition there is significant room for improvement from optimizations. Building off of what we mentioned earlier, the site may also be a legacy client who has reached a point where gaining an additional 5% in traffic means gaining incremental, but valuable, market share from a director competitor. Additionally, there may be plans for the site or business to go through major changes—a site launch or restructuring—that may greatly impact potential performance.
Each of these factors have to be reviewed and honestly, there will still be quite a bit of guesswork involved. As such, we want to do our best to collect as many insights as possible from historic data, changelogs, developers, and anything else available before setting our target. Once we have a decent idea of what sort of average growth the site has experienced, what work was put in to accomplish that growth, how much immediate competition the site faces, what changes are planned for the site and business, and how much we genuinely believe we can make an impact, we can move onto the next step: modeling traffic.
Setting a Digital Marketing KPI Target
Once you reach this step, you’ll want to hop on over to our handy dandy KPI Setting Dashboard.
To get started, you’ll want to make sure that you’re logged into the Google account that has access your analytics data. Start by opening the dashboard and creating an editable copy for yourself. From there, be sure that you have the ‘Google Analytics Add-on’ for Google Sheets. Once that’s all connected, you’ll drop your View ID into the organic box in the top row, seen below.
It’s important to make sure you’ve got a great grasp of historical growth, previous work accomplished, and how much of an opportunity you have to improve the site before moving on. Not knowing these factors means that the numbers you’re likely to choose in the next step are entirely arbitrary. That’s not always a bad place to start, but it is an uneducated approach and is closer to guessing growth rather than predicting growth. Once you’re sure you’ve got a good understanding of potential growth, it’s time to start playing around with the numbers. For some, this can be very tough, which is why we’ve laid our dashboard out the way it is.
The first section to look at, seen below, is easily the most informative section of the dashboard. This is where we get to see not just the total figures for traffic from the previous year, but how much it was weighted throughout the year. We’ve used conditional formatting to help make it clear which is the busiest part of the year.
For instance, in 2017 this client received 30,503 total sessions from organic traffic, and only 18.3% of it came from the first quarter of the year, whereas only 31.6% came from the fourth quarter. It is very likely that this site experiences at least slight seasonality (or a drop in traffic throughout the holiday season), especially if this is a repeated trend. This sort of information can be useful to consider when setting timelines or strategies for the year.
Moving to the right of this historic data in the chart, we see ‘Potential Growth Targets’. This is where we can start to play around a bit. Simply select a percentage in the orange cells to calculate what that level of increase would equate to in absolute numbers. I tend to use increments of 5 initially so I can get a quick overview of what a 5%, 10%, 15%, and 20% increase to traffic actually looks like. This section demonstrates what different percentage increases to the site for the year would look like each quarter, while accounting for seasonality.
Moving further to the right, we see our ‘Actual Change’.
As you choose different potential growth targets, the ‘Actual Change’ and ‘Actual Growth’ sections will automatically adjust to show the weighted amount the site will have to grow each quarter for you to reach your goal by the end of the year. For example, if we set a 10% increase in sessions as the ‘Most Reasonable Target,’ we would need to see an absolute increase of 3,050 sessions from the year before, with a total of 33,353 sessions for the new year. While the Actual Change is more of an internal number to gauge the feasibility of this absolute increase, the Total Goal is what we would share with our clients.
It’s Still A Lot of Guess Work
I won’t lie, this involves about as much creativity as it does logic, and it has to be approached as such. With the methodology I’ve laid out throughout this post, a lot of the work has been taken care of for you but it’s not totally complete. You still need to go through the manual steps of figuring out all of the factors that can affect potential growth and their levels of impact. Fortunately, the calculations are no longer majorly time consuming or manual. Just use this tool!
Do you have questions you’d like answered about setting a Key Performance Indicator for SEO or PPC? Contact us today! We’re more than happy to share our knowledge!