UNDERSTANDING KPIs

Digital Analyst

What are KPIs?

KPI stands for key performance indicator — a way of measuring how well you’re doing on a particular goal or objective over time. KPIs give you targets to aim for as well as checkpoints to stay on track, which in turn give insights to optimize campaigns and make smarter decisions. They’re like the strategic GPS for every part of your business.

Why Are KPIs Important?

Here’s the lowdown:

They keep your teams on the same page so that everyone is aligned on goals and heading in the right direction.
They give you a reality check on how your campaign is doing, from spotting low-performing creatives to checking out whether or not you’re using the best platforms for your goals.
They help you figure out what’s working and what’s not, so you can adjust your game plan accordingly.

What Makes an Effective KPI?

When it comes to setting up KPIs, you want them to be SMART:

Specific: Make sure you know exactly what you’re measuring and why it matters.
Measurable: You should be able to track your progress somehow.
Achievable: Keep it real — set goals that you can actually reach.
Relevant: Make sure your KPIs actually help the campaign succeed.
Time-bound: Set deadlines to keep things on track.

How do I select KPIs?

There are so many measures and ways to pull data to analyze it, but how do you pick the right KPIs for your campaign? Ask yourself:

What do you want to achieve? Figure out what your main objective is.
What does success look like? Get clear on what results you need to hit.
How can historical performance influence current objectives and goals? Look at what’s happened in the past to determine what you need to do in the future.
Can you set benchmarks? Have something to aim for and checkpoints to see how your campaign is doing.

Examples of Marketing KPIs

Measure the impact of your campaign by establishing KPIs that are in line with campaigns relevant to your marketing funnel. Below are examples of a marketing element within a phase and the thought process behind choosing the correct KPI for the campaign.

Awareness Phase — Paid Social

The goal of a paid social campaign is to raise brand awareness to maximize brand visibility to a large audience. This means getting as many people as possible to recognize the brand so that it is top-of-mind for potential customers.

Estimated Ad Recall Lift (EARL) is a KPI for paid social brand awareness in order to:

Measure Effectiveness: EARL shows how many users will remember seeing the ad within a two-day window. If ad recall is high, then these ads stand out to users within their feed.
Gauge Impressionability: Testing various ad copy themes and formats to identify what the audience responds to best in order to steer them towards making a purchase.
Boost Sales: Working hand-in-hand with brand recognition, a customer is more likely to purchase products when a brand is top-of-mind.

Consideration Phase — Paid Search

The goal of a paid search campaign in this phase is to engage users who already know about the brand or product and are looking for more information. These campaigns help users see your brand as a good choice and encourage them to visit your website.

Clicks/Sessions are the KPIs for paid search consideration campaigns for:

Measure of Engagement: A high number of clicks shows that the ad is relevant and interesting to the audience. It means people find the ad attractive enough to click on it to learn more.
Website Visits: The main goal is to get users to visit the website for more information, bringing them closer to making a purchase. High clicks means more visitors to the site.
In the past, CTR was a KPI to determine which campaigns and ads were the best performers. Google has launched new responsive search ads (RSAs), which will drive more impressions, clicks and conversions. With this update, it’s important that brands focus on increasing clicks/website sessions, which ultimately lead to sales.

Conversion Phase — Shopper Program

The goal of a shopper campaign with a conversion objective is to drive potential customers to take action. This type of campaign wants to turn interested people into paying customers, aiming to get the most money possible from ads by encouraging them to complete purchases or take other actions, such as adding items to their cart.

ROAS (return on ad spend) is a KPI for conversion-focused shopper campaigns for:

Measure of Profitability: ROAS shows how much money is made for every dollar spent on ads. It helps figure out if a campaign is making money and how well it turns ad money into sales.
Long-Term Planning: If ROAS is high, it means the campaign is working well and can grow. It makes decision-makers confident that increasing ad spend translates into higher revenue.
Resource Allocation: Understanding ROAS helps brands spend their budget more effectively, allowing them to focus on campaigns and vendors that have the highest return.

The bottom line is KPIs are the backbone of any successful campaign.

At GKV, we swear by them to help us make smart decisions and drive campaign results. If you’re all about using data to develop your marketing strategy, give us a call — we’d love to chat!