Digital marketing is the most important marketing channel for businesses.
However, many companies still struggle to find the right metrics to measure in their campaigns. This guide will cover everything you need to know about measuring the results of digital marketing to gauge your performance.
The State of Digital Marketing
In just over a decade, digital marketing has trumped traditional mediums like print and television to become the biggest marketing channel today.
Worldwide digital marketing spend is expected to hit $336 billion this year, with the industry expected to double in value within the next decade. The majority of digital marketing budgets go to social media advertising which makes sense as there are currently close to three billion users on social media—and the growth is not slowing anytime soon.
Marketing Can Only Succeed If It's Measurable
Many brands do not measure the impacts of their digital marketing efforts the right way. Some don’t measure at all!
A company may drop $50,000 on a Facebook campaign without knowing what to measure. Put yourself in the shoes of that company. You don’t measure your share of voice. You don’t have in-depth traffic stats. You don’t analyze customer demographics. How do you know if your $50,000 budget is actually making you money?
This is why marketing metrics are important. When you measure your campaigns, you uncover valuable insights that drive your brand to success. You’ll gain a better understanding of how and why your strategies are performing which helps a lot in refining your campaigns to generate more ROI.
Measuring the different types of digital marketing metrics in Lucidya
Different brands have different metrics depending on their priorities. However, there are a few evergreen KPIs that help measure your digital marketing ROI regardless of your niche or business goals. Let’s dive into it.
Five Metrics You Need to Measure Your Digital Marketing ROI
Traffic measures the amount of users visitors for your target page, account, or app. It is the easiest metric to collect as most ad platforms show you traffic stats automatically when you run campaigns. Some platforms (e.g. Facebook) offer detailed information such as user countries and traffic sources to provide more insights for your business.
The higher your traffic, the better. Don’t panic if you are on the low end, however. Some niches do not have wide audiences in the first place. A construction firm, for example, will never have as much traffic as a popular industry like eCommerce.
Use traffic as a general baseline for performance but don’t use it as your only metric.
Engagement captures the rate at which users engage with your company. Liking your social media posts, downloading content, and reading blog posts are examples of brand engagement in digital marketing.
Tracking user engagement on social media with Lucidya
A good way to measure engagement is to look at user activity. You can track activity stats like:
- How often are users reading your website’s content?
- How long do they spend on your social media channels?
- Are they visiting your brand frequently?
These questions help a lot in evaluating your brand’s engagement rates with precision.
Conversions happen when customers buy your products or services. It doesn’t have to be a purchase. Actions that don’t cost money like signing up for demos or trials are considered conversions if they help customers progress in the buying cycle.
The formula for calculating your conversion rate is:
Number of conversions ÷ number of leads × 100 = Your conversion rate in percentage
The average conversion rate for businesses is around 2.35%—that is two conversions out of every 100 leads. Ideally, you want it to be somewhere between 5% to 11% for optimal results. This allows you to achieve the target of netting returns five to ten times your ad spend.
4. Share of Voice
Share of voice (SOV) measures your brand’s influence in your industry. Nike and Adidas are companies with strong SOV values in the sportswear industry, for example.
A high SOV value translates to better digital marketing results as you’ll be able to reach more people compared to less influential brands.
You should utilize social listening tools to track your SOV. This saves you time and money from not having to do manual data work. Read our in-depth guide on share of voice here to further understand why it's important to businesses.
The three vital cost metrics to track in any digital marketing campaign are:
- Cost per click (CPC)
- Cost per lead (CPL)
- Cost per acquisition (CPC)
These metrics tell you how much you’re spending for each click, lead, or customer you get respectively. Your costs depend on your industry and the price of your products. A B2B company is going to pay a lot more for customer interactions compared to a tiny eCommerce startup.
Ad networks usually show detailed cost breakdowns to help with measuring performance. As a rule of thumb, keep your digital marketing costs around 10% to 25% of your product’s value. Anything higher and you risk losing money in the long run to expensive customer acquisitions.
Why Lucidya Is the Perfect Tool to Measure Marketing ROI
Lucidya is an AI-powered social media listening tool that empowers companies with in-depth, never-before-seen customer insights. Lucidya’s best-in-class text analysis engine also provides powerful sentiment analysis for conversations in English and all Arabic dialects including Najdi, Hijazi, Levantine and many more.
With Lucidya, businesses can build profitable products, boost customer satisfaction, execute successful campaigns, and close more sales thanks to our extensive list of social media listening features.
Ready to listen to your most valued customers?