The Marketer's Guide to Advertising KPIs

Choose the right KPIs to ensure your campaigns are effective.

Advertising KPIs

Key performance indicators (KPIs) refer to the most important metrics for any business to track. Businesses track a lot of metrics — but not all of them are relevant to advertising specifically.

Advertising KPIs show marketers how their campaigns are currently performing, how they might improve, and how customers are behaving. Some of the most important general advertising KPIs include:

  • ROI/ROAS. Return on Investment and Return on Advertising Spend both track the dollar-level effectiveness of your advertising campaign. If you’re spending $50 to bring in every $500 of sales, that’s good; if you’re spending $50 to bring in $60 worth of sales, that’s less good.
  • CRR. Customer Retention Rates are important to any modern business. The cost to retain a customer is usually a fraction of the cost to get a new customer. If your CRR is going down, then something internal is wrong — or the advertising company isn’t focusing on the right demographics.
  • CLV. Customer Lifetime Value is used for sales professionals more than marketers, but again, it’s also important to the advertising campaign. A low CLV might mean that advertisers need to focus on customers with a higher value; customers who have higher income or are looking for higher value products.
  • Traffic. Traffic shows the exposure of a company in terms of its website and social media use. Traffic is always good in terms of brand awareness, but it may not be the best metric because it doesn’t actually deal with sales.
  • Conversion. Conversion indicates how many individuals are actually making a purchase from the business. For many, this is absolutely the most important metric. But without other metrics, conversion doesn’t tell you much.

In the old days, marketers only had to track traditional KPIs. But today, there are digital advertising KPIs as well. Marketers must seamlessly track a dozen or dozens of channels. Often, this requires some help.

Digital Marketing KPIs

There are KPIs that are most popular with digital marketing. Digital marketing KPIs include traffic, conversion rates, clicks, cost-per-clicks, bounce rates, email opens, and more. Digital marketing KPIs can be tracked either through an advertising platform or through a platform-specific dashboard such as Facebook Insights.

Understandably, digital marketing KPIs are most important when fine-tuning and optimizing a given advertising campaign. Without digital marketing KPIs, advertisers can’t tell whether their advertising spend is effective. For Facebook Insights, an individual is able to see whether the campaign is being viewed, how responsive the people are to the campaign, and which campaigns are doing their best.

Digital marketing KPIs can differ significantly from platform to platform, so consolidating this information can be a challenge. But the more data a marketer has, the better they can tell which of their campaigns are performing effectively and which of their campaigns may need a boost. Digital marketing KPIs can tell marketers which channels are most effective for them, which demographics are going to be most interested, and which products and services are most popular in certain areas.

Because digital marketing is such a fast-moving industry, it’s hard for any marketer to take anything for granted. Detailed data is what helps marketers keep up in a fast-paced market.

KPIs For Display Ads

What’s a display ad? A display ad is an ad that displays on another website. The other website signs up for a service (like Google Ads) and is paid to advertise other sites. Google Ads is the most popular, but there are also other services like Bing Ads. Every time your ad is clicked on, you pay a small amount of money (usually a few cents). The hope is that the person who clicks your ad will be interested in your product.

There are specific advertising KPIs for display ads:

  • Views. A decade ago, advertisers charged by the view. But because views usually don’t lead to conversion, views are usually free now. If you’re getting a lot of views but no clicks, it means your ad itself isn’t alluring or isn’t being shown to the right people.
  • Clicks. Clicks are what you want. If you get a lot of clicks but few conversions, then it means your product and your ad probably aren’t properly aligned.
  • Conversion. Services like Google Analytics can actually track conversion rates too, which (of course) are one of the most important metrics.

A lot of companies use Google for their display advertising metrics. Google has the most extensive and robust third-party advertising network out there. So, Google Display Ads KPIs tend to be among some of the most important. But they aren’t the only digital advertising KPIs that you need to look out for.

Programmatic Advertising KPIs

Programmatic advertising is a special type of advertising that allows the advertising campaign to purchase online advertising on the fly.

Most KPIs for programmatic advertising are the same as other digital advertising campaigns; the methodology for choosing the advertising spend is different. Some key programmatic advertising KPIs include:

  • Cost per click. This would be the metric that determines how expensive each click is. The goal of the programmatic solution is to support the lowest possible click rates with the best yields.
  • Cost per impression. In some advertising platforms, impressions (also known as views) may also cost money. This would outline the cost per each impression.
  • Unique visitors. It may not just be visitors you want to track, but unique visitors. This would show your actual reach. If you’re only tracking any visitor, you may see the same visitor checking multiple times.
  • Return on Investment. You will also need to know how the ROI is when it comes to the advertising KPIs; the better the return is, the more you can spend.

Many companies find targeting programmatic advertising much more effective because the program is able to select the right advertising channels through an automated, optimized process.

KPIs For Social Media Ads

Social media is a unique venue because many companies can create a solid marketing campaign without spending money. But social media ads are a very effective way to boost social media campaigns. KPIs for social media ads are similar to display ads, but there can be some nuances that are important, too.

Facebook ads metrics, for instance, will help you track your major demographics. In addition to standard KPIs (like clicks, impressions, and so forth), Facebook will let you track:

  • Post engagements. Because you can boost individual posts or your entire page, you may want to see how many people are viewing or engaging with your posts.
  • Likes and follows. Likes and follows indicate that your content is successful, though this may not immediately translate to a conversion rate.
  • Event responses. If you’re promoting events specifically, you’ll want to know how many people are interested or planning to attend.

These are unique to Facebook. But, of course, that introduces a challenge. A marketer could have problems if Facebook is only one of eight platforms that they are tracking. If a marketer is tracking a multitude of platforms, they’re going to need to consolidate that data one way or another. And a service (such as Advertising Intelligence by Lumenad) will be necessary because Facebook and other social media platforms have unique KPIs.

advertising intelligence video

KPI For Brand Awareness Campaign

Not every campaign is based around conversions. For startups especially, campaigns may be situated around brand awareness. This is also why there isn’t a universal set of KPIs. Every company is different and has unique goals. The KPI for brand awareness campaign channels will be different.

Some brand KPI examples include: raw traffic, likes, and follows. These are high-level funnels that indicate that people know about the brand, are interested in the brand, and are primed for conversion.

From there, you can look at middle funnels (which are when visitors are turned into leads and properly qualified) and lower funnels (where these qualified leads are actually converted into sales). But brand awareness is where everyone starts. Few individuals want to deal with companies that they don’t really know or have a relationship with.

Social media and digital marketing are frequently used to build a lot of brand awareness and very deep relationships. These relationships are often built far before an individual ever makes a purchase. Companies have discovered that deep relationships foster recurring expenditures, rather than one-off sales. Social media is an affordable way to build brand awareness and track these KPIs. Perhaps most importantly, companies cannot just skip brand awareness.

guide to advertising kpis

Advertising Metrics

Advertising metrics aren’t always as straightforward as they seem. A small example is just impressions vs. traffic; some companies may track an “impression,” some may track “traffic,” and when they are both consolidated improperly, they could tell a different story.

When comparing advertising platforms, a common issue is that one platform could count all hits as traffic (every page a person sees) whereas another platform could track visits as traffic (an entire single session). Bringing this data together would be very misleading because one platform would show much more “traffic” than the other and would unduly influence any consolidated information.

To compare your advertising metrics, you need a digital KPI dashboard. And to ensure that these metrics are being used correctly, you need an intelligent solution. The Lumenad Advertising Intelligence platform ensures that metrics are being compared properly, streamlining them into a single system, and consolidating KPIs.

Without a dashboard that shows advertising metrics, it’s very difficult for advertisers to determine which strategies are most effective. But Lumenad can help.