First, it is important to understand what a KPI or indicator is in digital marketing.
What is a KPI?
Digital Marketing KPIs or Key Performance Indicators are quantifiable metrics that help you track and measure the success of your project.
KPIs are a very important tool for digital marketers to set expectations and prove that their work is having a positive impact. For example, if your goal is to generate sales for your client, the total sales need to be measured, right?
It may seem obvious, but this process is not always simple. Sales cannot always be attributed to digital channels, which is where the challenges of selecting KPIs begin.
While the impact of digital marketing may be seen as difficult to measure in the above case, it is typically easier to assess the progress of a digital campaign than an offline one.
Furthermore, the digital environment has provided access to hundreds of data for any company, through tools such as Google Analytics, Facebook Insights, among others.
We have never had so much data, basically for free, to evaluate the impact of our projects.
What is the difference between KPI and Metric?
A KPI is a metric, but not every metric is a KPI. ☺
KPIs are important metrics for your project and your goal, while a metric is just a number. If this number is important for your goal – for example: increasing sales in my store – then the metric “sales or total sales” is important! This metric then becomes a KPI, because if I want to increase sales, I need to measure sales.
The important thing is to understand what can help you reach your goal. An example of another possible KPI for those who want to increase sales: sales conversion rate. After all, if I increase my store's sales conversion rate, I should have more sales at the end of the month.
However, the total number of new followers your client requested or the increase in ad clicks don’t seem to be helping your sales process much? Then “new followers” or “ad clicks” wouldn’t be good KPIs, even though they are metrics available in the tools.
Assessing what is important depends on a number of factors, such as your scope, project context, and client expectations. But we’ll show you a way to select the most relevant KPIs for your digital marketing projects.
How to select a KPI?
The most important part of defining a KPI is choosing what to measure. The first step is to try to measure the factors that will affect your project or client’s objectives or goals.
KPIs are often tied to a “conversion.” This can be defined as any interaction that is valuable to your goal, such as a contact on your website, a newsletter signup, etc.
It's up to you to define what to track as a conversion, depending on what you want to achieve.
As a general rule, conversions should be specific (i.e. well-defined and easy to measure) and aligned with your objective (for example, a user filling out a contact form when making a purchase is more interesting for an online store than the number of clicks on products).