A Bank Marketer’s Dictionary Of Digital Marketing Metrics
There are a ton of digital marketing metrics out there. So many, in fact, that it can be hard to know which ones you should be tracking or how you can be using them to increase the effectiveness of your campaigns. In this resource, we'll go over the most common digital metrics, what they mean, who actually needs to see them, and how to take action on them.
Macro-marketing metrics will be most valuable to the executive team. It will give them the insight into how the marketing team is performing both in terms of lead generation and in managing their budget effectively.
- Goal Completions- Did you accomplish what you set out to do? Perhaps you were looking to grow leads or maybe it was to increase account openings. Regardless, this metric reflects how many completions you accomplished of your primary goal.
- CAC (Customer Acquisition Cost)- This metric reflects how much you had to spend in order to attract a new customer. To determine this cost take your marketing budget and divide it by the number of goal completions you had during the same duration. For example, if my marketing budget was $10,000 and I had 1,000 people open a new account with me, my CAC would be $10. Your goal should be to maintain or reduce your CAC. (total budget/customers acquired)
- ROI (Return on Investment) - An effective marketing team can point to how many dollars of business they bring for every dollar they spend. This is more commonly known as the return on investment. When looking at channels, knowing their ROI can be valuable in determining where to invest and where to cut. You can calculate a channel's ROI by taking the net revenue generated by the channel and dividing it by the cost of marketing on that channel. For example, if I made $1000 through Facebook Ads that cost me $500 to run, the formula would look like this: ($1,000 - $500)/$500. This would give me an ROI of 100%. If my Twitter ads only delivered an ROI of 50%, then I would know I should reallocate those funds to Facebook to increase my impact. (Revenue generated - cost of marketing)/(cost of marketing)
Funnel metrics should be looked at by the CMO and whoever manages the digital marketing strategy. They will provide a nice macro view of how the digital marketing channels are performing against one another.
- Conversion Rate - Your conversion rate measures what percent of people moved on to the next step in the funnel. Imagine I have a gated e-book that I want people to download. 100 people visit the landing page, but only 20 of them fill out the form and download the e-book. My conversion rate would be 20%. The formula is (people who took the action)/(total people who could have possibly taken the action). Identifying stages with the lowest conversion rate will let prioritize where to focus your efforts.
- Cost-Per-Conversion - How much did it cost you to get someone to take the desired action? This metric is similar to the CAC except it doesn't necessarily mean someone became a customer. A conversion could be any activity, like signing up for an email list or downloading a case study. Let's say we know that 20% of our email list would spend $100. We could then say that each person on our email list is worth $20 ($100*.2). If we know our cost-per-conversion for email subscriptions was $4, then we can feel confident that this is a profitable channel for us. (Total marketing costs spent)/(number of customers earned)
Ad metrics are valuable to the digital marketing manager, an ad specialist, or third-party agencies responsible for managing your digital advertising.
- ROAS (Return On Ad Spend) - ROAS will answer "How much do I get back for every ad dollar I spend?" In order for this to work you need to be able to attribute revenue to a specific campaign. This can get a little tricky as there are many attribution models. The important thing is consistency in its application. Using pixels will also help in determining your ROAS. For example; Facebook's pixel will let you know when someone converts from one of your ads. The formula is (revenue attributed to campaign - ad spend)/(campaign ad spend). Use this metric when you want to see which ads or ad sets are performing best.
- CPC (Cost-Per-Click) - As the name suggests, this metric is how much you spend on a digital channel for each click you earn. It is important to look at the quality of clicks when evaluating if a cost is good or bad. A channel might have a higher CPC, but if it also provides a higher conversion rate, then it might be worth maintaining. The formula is (total ad spend)/(number of ad clicks)
- CPM (Cost-Per-Mille) - The M (mille) is the Roman numeral for 1,000, so your CPM is the cost to reach 1,000 impressions on a channel. This is a valuable metric for measuring ad fatigue. Typically, your CPM will rise over time. Set a threshold you are willing to pay and when you reach it, change creative. Calculate your CPM by taking (Ad budget)/(Total Ad impressions/1000)
- CTR (Click-thru-Rate) - Your click-thru-rate is how many people clicked your ad relative to how many people saw your ad. It's a good indicator of how enticing your ad is. A good companion metric to your CTR is the conversion rate of the page the ad leads to. Together, they will let you know if you are delivering the experience your ad suggests. An advertisement for candy that then leads to a dentists website would likely have a high CTR but a low conversion rate. It would suggest you need to either change your ad to more accurately reflect the product, or you need to change your landing page. You calculate your CTR by taking (Total # of Clicks)/(Total # of Impressions)
Content metrics are valuable to the person responsible for content strategy, channel ownership, and for the creatives responsible for making the content. It will provide insight into channel health and what is resonating with your community and motivating them to take action.
- Website - These metrics can all be found in Google Analytics
- Sessions - This metric tells you how many visits to your site you had. It's important to remember that a single person can have multiple sessions in a given time range. Tracking sessions can let you know how well you are driving traffic to your website.
- Pages/Sessions - How many pages did people look at while on your website? Depending on how your site is structured, this could be good or bad. If you notice people are browsing around on your blog, then you want a high number of pages per session. If your page was a landing page, a high number of pages per session might indicate that your content is unclear and consumers are looking around for missing information.
- Time On Site - The Time On Site metric reflects how long someone spent browsing your website. Time invested in a site is a good proxy for interest. Consumers who spend more time on your website are likely more engaged and more interested in your services. That said, the same context applied to Pages/Sessions should be applied here in evaluating if this metric is a good or bad sign.
- New v.s. Returning Visitor - Like Time-on-site, people returning to your website is a good indicator of interest.
- Source/Medium - It's important to know where your audience is coming from so that you know where to further invest. If you notice that LinkedIn is successfully driving traffic, you can either optimize current efforts or let it be and focus on underperforming channels.
- Blog Content - These can be found in Google Analytics
- Views Per Post - This metric is a nice proxy for popularity. The more views a post received, the more interesting the topic is to an audience. I say "an audience" here because this may or may not be your desired audience.
- Links Per Post - One of the most important contributing factors for SEO is the number of links pointing back to your site. For that reason, it can be useful to track which of your blog posts are getting the most links. It is a good indicator of topics that you should explore more deeply or authors you should request more content from.
- Social Media Content - These can be calculated from data provided on each social media platform
- Audience Growth Rate - A positive growth rate means your community is growing, both in headcount and in potential value. Larger followings demonstrate powerful social proof and assists your brand in content distribution. You want to measure rate as opposed to raw number as it paints a picture of the speed of growth; Did this campaign accelerate your growth or is this channel dying? The formula for growth rate is (new followers)/(total audience)
- Engagement Rate - Your engagement rate is a macro view of how well your content is performing. High performing content gets like, comments, shares, and clicks. A lot can be learned by identifying content with a high engagement rate; What type of media does my audience like? What topics? What times? What voice? Calculate your engagement rate by taking all of your engagement metrics and dividing by your impressions. (Total Engagements)/(Total Impressions)
- Applause Rate - Applause rate measures likes, favorites, upvotes, or whatever the one-click vote is for a platform. This type of engagement is the most transactional. It is a simple nod to the fact that your content is going in the right direction. It's most useful when benchmarking against yourself. (Total Likes)/(Total Impressions)
- Conversation Rate - Comments are more valuable than likes both because it shows more effort and because it causes the content to appear in a user's circle of influence for most platforms. A note of caution about comments; Factor in sentiment. A high conversation rate might seem great, but if the comments are negative, then we have a PR issue. (Total Comments)/(Total Impressions)
- Amplification Rate - Sharing content is the strongest sign of endorsement that a consumer can give your content. Amplification measures what percent of your audience is helping to spread your message. (Total Shares&Retweets)/(Total Impressions)
- Video Content - Available through your video hosting platform.
- Views - This is the number of people who have watched your video and it speaks to how well you are promoting your content. A video with a low number of views tells you that you should re-evaluate your promotion and optimization strategy.
- Average Amount Viewed - The percent of your video that is viewed will tell you how interesting your content is. Uninteresting videos will result in a majority of the audience leaving. Interesting content will have a higher amount viewed. If your % viewed is low, then you should experiment with your topics, format, pacing, and video length.
- Email Marketing - Available through your email marketing platform
- Open Rate - Your open rate speaks to two elements; (1) How effective is your headline? (2) How strongly does the audience trust/respect your brand? Consumers that know you only deliver high-value content will open your content. If you are seen as spammy, then your open rate will be low. The open rate formula is (# people who open)/(total recipients)
- Click-Thru-Rate (CTR) - Effective emails will have a call-to-action somewhere within it. This might be an offer or a link to more content. Regardless, every email should have a purpose, and your click-thru-rate lets you know what percent of the audience took this action. (# of clicks)/(total recipients)
- Click-to-Open Rate (CTOR) - Your CTR looks at what percent of the total audience took action. The click-to-open rate looks at how many people took action compared only to the audience that opened the email. This, to me, is a more informative metric and speaks to the effectiveness of your copy, positioning, and offer. (# of clicks)/(# of people who opened the email)
- Unsubscribe Rate - This metric functions similarly to your open rate in the sense that it speaks to how much your audience (or email database) trusts your brand. People who unsubscribe are sending a strong message that your content is not resonating with them. If you have purchased an email database, a high unsubscription rate will let you know that the quality of the database is poor. If you email database was built organically, then you should look at what might have changed in the content you've delivered. For example, are you overselling? Measuring your rate will allow you to set benchmarks for emails even as your business grows. (# of people who unsubscribed)/(total database)
- Database Size - How many people can you reach with your emails? Your database size is the key number in estimating the impact of your email marketing campaigns. For example, if you know you have a 2% conversion rate and each conversion is worth $100, then you could effectively value a database of 10,000 people at $20,000.
It is more profitable to keep the customers you have than to go out and attract new ones. Retention metrics help you understand how your existing customers are impacting your business. It will answer questions like "Are they happy?" and "Who are our most valuable segments?"
- LTV (Lifetime-Value) - To know if your marketing is cost-effective, you need to know how much a customer is worth. Lifetime-value takes a holistic view of the consumer. In our industry, imagine that the consumer will stay with your institution for eight years and that they generate $165 in profit a year. The lifetime value of this customer would be $1,320. Knowing this, you can look at ways to increase the LTV through activities like cross-selling, upselling, and reducing the cost-to-serve. You should work to find the segments with the highest LTV and build campaigns to attract them. (Average annual profit of sale)*(Average duration which a customer stays)
- NPS (Net Promoter Score) - Word-of-mouth marketing is increasingly effective in the age of social media. The net promoter score is considered to be the most accurate measurement of customer sentiment. It is based on the single question "How likely are you to recommend this business to a friend?" Consumers respond on a 1-10 scale, with those answering 9 or 10 classified as "promoters." There are also "passives" and "detractors." Your net promoter score is calculated by taking (promoters)-(detractors)
- Churn Rate - Your churn rate measures how quickly consumers are leaving your business. It's another metric that helps you determine how well you are delivering on your promises. A high or growing churn rate means that consumers are growing in dissatisfaction and should be an indicator to look at your customer service, products, and value proposition. (customers who have left)/(total starting customer base)
- LTV:CAC (Lifetime-value:Customer Acquisition Cost) - We have saved the best metric for last. This ratio should be your key metric when evaluating your marketing. Assume that when you add together staffing costs, tools, and ad spend, you find that your CAC is $500. Then, we determine that every customer is worth $1,500 over their lifetime. This gives us a ratio of 1,500:500, or 3:1. For every $1 we spend, we will make $3 for our institution.