Alexander Montium-Åberg is the Nordic Social Media Manager at Findus in Sweden, formerly Head of Social Media at NIBE Energy Systems and Social Media Manager at Bergendahls. He is fascinated by the speed of the evolution of tech and communication, as well as how the change of online human behavior impacts how we interact offline.
You’re in a meeting being presented with a report for your company’s latest campaign. You as a marketer know that the campaign went well in regards to your KPI’s and can understand all the metrics and numbers that are being presented. In the room with you are colleagues from sales, business development, and corporate leadership. They just see a bunch of numbers without context and aren’t familiar with what CPM and CTR mean.
While this is somewhat of an exaggeration (I hope), I think many of us can identify ourselves on either side of this scenario. Either in the sense that what we are presenting isn’t being understood or that we are being presented with numbers and metrics that don’t make sense to us.
In my mind, reporting and the setting of KPIs for marketing should be approached from two angles. And just to make sure everybody is aboard the same train going forward when I say digital marketing KPI I am talking about Key Performance Indicators, which are also metrics – just metrics with authority over all other metrics. The metrics that define your success. Makes sense? Good, let’s go.
What is the goal of the business overall? Increased sales? Increased brand awareness? The answer to this should always serve as the foundation on which we decide upon what our marketing KPIs are. That said, I feel it is extremely important to make sure that you don’t get stuck on ”increased sales” as a KPI for reporting. Because that is missing the point.
So how do we go about this treacherous route?
Well, for starters, when you have defined the foundational business goals you have to try and quantify them in a manner that can be applied to your available marketing metrics. And this is where we end up at a crossroads.
If you are selling a product online, you can follow up sales connected to your marketing activities in real-time. E.g. you have a product on your website, you market that product in all sorts of digital environments and can access the marketing performance of those ads in an instant. How many clicks, how many impressions, and how much sales you’ve gotten from each specific ad down to the dollar (or whatever your currency of choice might be). Easy enough and very much quantifiable.
But what if your business goals are different, or if you don’t sell products directly via your website to the consumer?
This is where you have to delve deeper into what creates value in alignment with your business goals. Say we want to increase revenue, how do we do that? By selling more, and how do we sell more? We tell more people about us and our amazing product. Pretty straightforward – but if we sell through retailers for example, then we can’t follow up our sales in the same manner as mentioned above. In that case, we have to decide on what digital marketing metric we can define as a success metric. If we increase awareness about our brand, will that lead to more people recognizing us when visiting our retailers where they can actually buy our product? Probably, and in that case that is the next piece of the puzzle.
Alright, we know that we want to increase brand awareness – but what does that mean in terms of hard numbers? Well, we could define it as how many people are exposed to our brand, which is quite easy but really doesn’t say much other than “your ad has been viewed X times”, and that might actually be enough. You just have to make the decision whether it is or isn’t. Talk to your team, talk to colleagues from other departments, what are their goals? Make sure you understand each other on both sides of the table and then make the decision. Maybe you’ll find that “impressions” are the best way for you to measure your success, or maybe it’s “unique website visitors who stay more than 30 seconds on our website”. The important thing is that the marketing metric is agreed upon, understandable, foundationally driven, and relevant.
Some digital marketing KPIs that have worked for me in the past and ticked all the boxes are for example: “unique website visitors”, “amount of leads”, “unique reach” and the obvious and ever so clear “sales” – in the case of the sale it was calculated based on the amount of money generated by checkouts on the website coming from traffic generated by a specific campaign.
In my mind, there isn’t really a “best practice” to this, and if there was, it would probably only be applicable to a handful of the businesses trying to make use of it.
There has been an epidemic ravaging the digital marketing landscape for pretty much as long as I’ve been in the business (for what that’s worth) in the form of “vanity metrics”. This is a cheap trick used by marketers who don’t have the confidence to show the numbers that matter – or know how to. It’s easy, but not fair, to deceive your colleagues from other departments or your clients for that matter – just to make your numbers look more impressive than they are. Or give a completely false image of how a campaign actually performed – anyone can make a hockey stick diagram.
This is where we return to the importance of clear, business goal-aligned, quantifiable digital marketing KPIs. We live in a time where we can measure E V E R Y T H I N G when working with digital marketing. That doesn’t mean we should, but we can. And a lot gets measured, and a LOT of it goes into marketing reports, and most of that makes sense when presented to other people who work in digital marketing. But ask yourself this, is it really necessary to waste – yes waste, your and other people's time by trying to explain every single metric? No, no it’s not. Really, it’s not.
If we have one, two or three digital marketing KPI’s that define the success or unsuccess of a campaign or marketing activity every follow up-meeting wouldn’t just be shorter – it would be SO much better. Everyone in the room would understand everything, and if they don’t it would take hardly any time to explain it to them.
Here's an example:
KPI A – we surpassed our goal, great!
KPI B – we are level with our goal and expectations
and KPI C – is underperforming compared to expectations and goals.
“But Alexander, how do we handle underperformance when we just focus on three metrics?”
We don’t focus on just three metrics, we present three marketing metrics that we have together decided on to define success or lack of success. If we find an issue, we immerse ourselves in all the data we have at hand and work with identifying the cause. You see, just because you have the data doesn’t necessarily mean you have to present it.
Everyone is busy, and our job as marketers is not to waste people's time in four-hour follow-ups or waste our own time teaching sales directors about every single abbreviation related to digital marketing metrics. By working with clear and foundational digital marketing KPI’s, we make it a lot easier to present campaign performance and analytics and give ourselves the space needed to do proper analytical deep dives when needed.
We live in a crazy, fast-paced, perpetually changing world – so working with a strong marketing data foundation for analytics that is decided upon together with other stakeholders makes that world a little bit more endurable.