4 Digital Marketing Metrics Every CEO Should Pay Attention To
As a digital agency that believes in being an extension of our client’s team, we have the opportunity to work directly with amazing CEO’s, CFO’s and CMO’s. Often times these executives ask me, what high level metrics we should use to measure our digital marketing campaigns and strategy at the executive level?
Some executives might want to get deeper in the weeds when it comes to your digital strategy but here are 4 things that every CEO should track and have their team report on.
Metric #1 Conversion Rate
A conversion rate is the percentage of the visitors that come to your site and convert. Depending on what type of business you have, this conversion rate could be measured across several goals.
E-Commerce Businesses
This conversion rate would be measured based on the percentage of visitors that make a eCommerce checkout and purchase product. You may want to take a bit of a deeper look and look at this percentage in terms of the amount of “new visitors” vs. “past visitors” as well as the “mobile” vs. “desktop” visitors who are converting. Every site and business is different but usually a 2%+ conversion rate is what you want to strive for.
Lead Generation Businesses
This is often a conversion rate based on the percentage of people that come to your website and either A) fill out a form or B) call you. For phone call tracking we recommend using CallRail. CallRail is a great partner of Power Digital and a popular service for tracking phone calls due to its seamless integration with Google Analytics.
Related: Digital Marketing Best Practices – Channel by Channel
Lead Generation sites should have higher conversion rates than E-Commerce and generally we’d like these to be above 5%. However, they can greatly exceed that metric and we have many client sites who are 10%+ depending on the industry and traffic sources.
If your conversion rates are below the numbers mentioned above, do not panic, you can easily improve them!
- Check your traffic sources and make sure that traffic is quality. If not, come up with a plan to adjust.
- Conversion Rate Optimization is one of the most high value initiatives you can invest in. We have had HUGE success with the Power Digital CRO program and have been able to generate huge returns for our clients through this data aggregation process and proactive A/B testing.
Metric # 2 Cost-Per-Lead (CPL), Return On Ad Spend (ROAS), & Overall ROI
These metrics vary based on your business type, (E-Commerce vs. Lead Gen vs. Subscription, etc.) but in my opinion is absolutely critical to understand and keep a very close eye on.
These metrics show the efficiency and success of your marketing campaigns. I find that many CEO’s do not know these numbers nor do they have a clear goal for what these numbers should be. You need to have that goal and “over / under point”.
Cost-per-lead
For starters, you’ll need to be able to answer the following question: “What is the highest amount of money, I would pay someone for a quality lead?” Is it $50, $100, $1,000? That is for you to decide based on your close ratio, average profit in a deal, etc.
Related: Score Your Digital Marketing Agency [QUIZ]
However, it’s important for you to set a top threshold so you can put a line in the sand and measure against it. Your marketing team’s goal will be to bring you leads below that rate and continue to bring the cost per lead down as they get more data and your marketing campaigns grow.
Return on Ad Spend or ROAS
For E-Commerce businesses, this ratio represents amount that you are spending in ads or overall marketing spend (your choice) and the amount of sales it generates. Typically this metric is the core measure for me on Paid Media Ad Campaigns for ECommerce businesses.
Example:
200% ROAS would mean that for every $100 you spend you get $200 in sales
500% would mean that for every $100 you spend you get $500 in sales
This is the same process as finding your CPL, you’ll need to determine what your break even point is for campaigns. What is the point that you break even when considering COGS (cost of goods sold) and other financial factors? Once you have that number and determine what your minimum acceptable ROAS is, you can work to exceed it by as much as you can.
Related: Tips for Managing Your Marketing Team
I often have CEO’s give me out of reach goals for their businesses such as 1,000% ROAS. If you are running a “branded” ad campaign that is possible, meaning you are ProActive face wash and are bidding on the keyword “Buy ProActive face wash” it may be possible. However, for non-branded campaigns such as “buy face wash” that goal is not realistic. Typically 250% – 300% ROAS is pretty attainable depending on competition in your industry. Once you start exceeding 300% you are probably doing pretty well.
Overall ROI
This will be a bit more manual to measure but is one of the most important aspects to consider. It is key to look at your overall marketing spend and dive deep into what that is doing for you and the business it is generating for you. I do deep dives into this quarterly if not monthly to assure I am spending the right amount and getting the return I desire. It is the key driver for me into deploying more budget into initiatives or cutting efforts that aren’t money makers for me.
Metric #3 Channel Growth
This one is simple, take a look at each of your core traffic channels each month to see growth or decline. This will help you note what initiatives are growing and what parts or your digital program are in decline. Keep in mind that there may be seasonality to your business that causes channels to decline – you know this better than anyone as you are the CEO and know the trends of your business. When it comes to seasonality, it typically will translate over to your website.
The core channels to track and measure each month:
- Direct: The number of people typing in your website URL (This will indicate your overall brand awareness.)
- Organic: Your SEO traffic from organic rankings.
- Referral: Your PR traffic coming from media hits and other sources linking to your site and driving traffic to you. (We drive this channel heavily through our PR programs, creating partnerships and having them work for you.)
- Email: Insight to how your email campaigns are producing.
- Paid: These are your ad campaigns such as Google PPC or Display ads. You can buy this traffic and it fluctuates with how much ad spend you have in a given month so this traffic growth isn’t a true metric I pay that much attention to. I will dig deeper in how to measure this channel in a bit.
- Social: how your social media channels are doing in terms of sending traffic to your website.
I recommend that every CEO track all these channels and use them to better understand progress of the various campaigns your marketing team is running or maybe should be running or should be discussed in greater detail.
Metric #4: SEO Rankings In Google
Do you care about how your clients and potential clients are describing your business? I know I do. Your rankings show you how Google is describing your business and how highly they think of you vs. your competition.
Related: What to Look for in a Digital Marketing Agency
If you want to know how people are classifying your business you should want the same thing from Google. It amazes me how many organizations don’t track their rankings or don’t review them monthly to see what is trending up and down. SEO is the lowest cost channel to capitalize on traffic and rankings. Plus, it will tell you a lot about how your business is performing online.
Wrapping Up
I hope this article helps you focus on the right metrics so you have greater visibility into the health of your campaigns and website. Please feel free to reach out if you need assistance understanding these metrics! We also are happy to answer any questions about how to further customize them to your business and establish plans to improve these numbers.
If you have some other marketing metrics that you think every CEO should track and measure monthly please leave them in the comments section below, we would love to hear from you!
