If you’ve ever explored your business’ digital advertising or Google Analytics dashboards, you’d see an inundation of metrics such as click-through-rate (CTR), cost-per-click (CPC), cost-per-result (CPR), cost-per-mille (CPM) and conversion rate, to name a few.

It’s easy to get stuck in the weeds of this data and at times difficult to decipher what these metrics indicate – especially when some of the results can contradict each other.

This is why having a clear marketing strategy and understanding its corresponding key performance indicators (KPIs) and success metrics is key.

Once you’ve set your short- and long-term goals and identified which KPIs (in line with industry benchmarks) define success, you can refer to the specific metrics to track your progress toward achieving your objectives.

Whether you are focusing on building long-term brand awareness and informing your target audience about your business’ unique value, or if you’re looking for quick and converted leads contacting you about a specific offering – knowing which metrics to look at, and the broader context of why they matter, is critical.

Here are some things to consider:

Know your strategy before activating in market

It sounds obvious yet having a clear understanding of your objectives before launching a marketing campaign—be it paid or organic, short or long term—is essential to how you strategise, execute, and measure its success.

Before any go-to-market strategy is developed, ensure you first research and understand your target audience including buying behaviour.

Consider then what the intention of the go-to-market campaign is. It could be subtly and consistently increasing awareness about your brand through the form of thought leadership content (website articles, video content, or resharing of industry insights). Or it might involve short-term lead capture and conversion ads. Each campaign serves a distinct purpose in guiding prospects through the buying journey.

Once you’re clear on your message, who you are targeting and what you are seeking to get from the marketing activity, ensure your campaign is set up optimally to achieve this. There is no point analysing the data from your campaigns that were set up incorrectly from the onset.

Define your KPIs based on industry benchmarks

We are often asked how you know what a ‘good’ cost-per-click (CPC) is in digital advertising (among other metrics). Sometimes you can see the cost of a click being $0.10 and other times it’s upwards of $175. The answer? There are many variables to consider.

Firstly, your industry and respective business’ margins factor into this. When benchmarking a low-cost, high-volume product against competitors, one could expect to see a cost-per-click or cost-per-result <$0.10. Conversely, for a niche service offering, where an inquiry form submission may be rare but highly valuable, the expected cost differs significantly.

You would also expect that new yet cold leads submitting their details into a lead capture form would be a less expensive ‘result’ (CPR) than warm and engaged prospects.

Other factors to consider include whether you are setting your KPIs based on quick conversions or perhaps expanding your brand’s reach. For example, you may have an objective of engaging with industry influencers in the form of reshares, comments or likes. While this may not lead directly to ‘conversions’, it can effectively position your brand to attract potential future leads into your pipeline. It all comes back to your strategy and predetermined success metrics.

Identify at which stage of the buying cycle you are targeting

You also need to consider the quality and stage of the ‘leads’ or prospective customers you are engaging with.

For example, sometimes it is easy to see a volume of leads come in submitting an enquiry on an ad. It’s difficult, however, to see quality and ‘verified’ leads enter the sales funnel. An example of seeing verified leads entering your CRM is a lead nurture campaign. Herein a lead submits an initial form and then progresses through a series of nurturing emails until a ‘lead score’ is met based on their engagement with your content – at which point the lead is delivered to the sales team for follow-up.

Some businesses prefer their sales team to contact leads at all stages, while others prioritise lead verification and only engage with warm, ready leads, thus saving operational time sifting through cold leads. Each would observe different KPIs.

Optimise your campaigns for the outcome you are seeking and focus on the metrics that align with this

In digital advertising, there are many outcomes to consider, such as lead generation, brand awareness, website traffic, conversions, and engagement. Tailor your campaigns on a campaign-by-campaign basis, optimising them for the specific result you are seeking.

An example of this is optimising your ad for ‘website visits’ if you’re seeking to increase brand awareness about your overall business or optimise for landing page ‘clicks’ if you’re seeking to directly capture lead details for a particular offering. It’s at this stage that the contradictions in metrics we discussed earlier can come into play:

For instance, you might outperform in terms of cost-per-click (CPC) results, which may seem outstanding. However, this doesn’t necessarily mean that you’re effectively engaging your audience; you might observe a low click-through-rate (CTR).

While metrics like website visits and CPC provide valuable insights, CTR offers a deeper understanding of how engaging and compelling the ad is to the audience.

And this is where it gets complicated: marketers often focus on ‘clicks’ (CPC) as a measure of success, but it’s really the click-through-rate (CTR) that matters. Clicks indicate how your budget is being spent (relative to your margins) and provide a raw count of interactions. CTR on the other hand offers a more nuanced perspective by contextualising those clicks within the broader audience exposure to the ad (impressions). The CTR is calculated by dividing the number of clicks by the number of times the ad was shown (impressions). Thanks for sticking with us here!

Below are some other considerations of additional factors you should consider when optimising your activity:

Content relevance
Is your content accurately reflecting what you’re offering? If there’s a disconnect between your messaging and your landing page content, visitors may click out of curiosity but then leave because they didn’t find what they expected.

Landing page experience
Is your landing page optimised for conversions? Factors such as page load speed, ease of navigation, clear CTA, and compelling content all contribute to whether visitors will take the desired action.

Visual components
Is your creative engaging and persuasive? High CTRs don’t always translate to conversions if the ad fails to communicate the value proposition effectively or if the offer isn’t compelling enough.

Conversion tracking
Are you accurately tracking conversions? Make sure your conversion tracking is set up correctly so that you can identify which content is driving actual conversions.

Optimisation
Continuously monitor and optimise your campaigns based on performance data. Adjust targeting, creative, bidding strategy, and other elements to improve both click-through rates and conversion rates over time instead of a set and forget approach.

Quality Score considerations – introducing SERP (search engine results page)
Quality Score is a metric used by Google Ads to measure the relevance and quality of your ads, keywords, and landing pages. It’s a crucial factor in determining where your ads will appear on the search engine results page (SERP) and how much you’ll pay for each click (CPC). Note, this measure is separate to social media digital advertising and just related to Google advertising.

So, even if your ad has a high click-through rate (CTR), if it has a low-quality score, it may still end up with a lower position on the ‘SERP’ and a higher cost-per-click (CPC) compared to ads with higher Quality Scores. This is why maintaining a good Quality Score is essential for optimising your ad performance and getting the most out of your Google advertising budget.

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In summary, establishing clear short- and long-term goals, and knowing which KPIs and respective success metrics to monitor is the foundation of a robust marketing strategy.

Whether your aim is to cultivate enduring brand awareness or generate leads for specific offerings, understanding the significance of relevant metrics and their broader context is indispensable. By leveraging this insight, businesses can refine strategies, optimise performance, and ultimately drive sustainable growth.

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