[Updated for 2021]
As a marketer, analyzing digital marketing data is the best way to see whether or not your digital marketing tactics are working and where you can improve.
Many efforts to analyze data are fruitless, so it's important that the data is analyzed correctly. In order to properly analyze marketing data and get actionable results, let’s examine seven of the top ways to analyze digital marketing metrics and why they are so crucial to your business's success.
1. Sales Revenue
The first metric to analyze is sales revenue. This is kind of obvious, but believe it or not, some of the smartest marketers overlook this metric. It's not easy to tie your sales revenue to the actual marketing activities you're launching, but without it, you have no idea if your digital marketing is paying off.
To measure your sales revenue correctly, utilize a software program that specializes in measuring sales data and other key performance indicators (KPI). The goal is to see a clear differentiation and year-to-year increase in your sales that can be associated with your digital marketing initiatives.
2. Customer Retention Rate
We’ve discussed the elements of a good social media campaign before, along with how digital marketing methods lead to new engagement and new customers through top-of-mind awareness. However, we haven’t fully discussed how digital marketing can help with client retention.
After all, current customers or clients are your most valuable assets, and retaining them over time is important. Measuring your client retention rate is absolutely essential. Fortunately, this metric is relatively easy to track, as long as you compile simple information (for example, sales in a certain year by customer account or how many return coupons are used in your system). By doing this, you can see if you are retaining current clients and determine how to raise this rate over time through marketing efforts such as retargeting campaigns.
3. Social Media Engagement
Many quality digital marketing campaigns begin and end with social media. Social media engagement is one of the most important metrics to measure when looking at the longevity of your brand and how people interact with your company over time.
To measure the engagement rates of your social media accounts, you may want to first focus on putting your accounts into one highly-effective social media scheduling app because many of them track engagement analytics for you.
One of the most important metrics to track is engagement rate. In order to calculate engagement rate by post, record the number of likes, shares, and comments the post gets. Divide this by your number of followers and multiply the result by 100 -- this gives you that post's engagement rate (as a percentage). The benchmarks for social media platforms differ. Instagram tends to have higher engagement overall, so the benchmark is 3-6%, whereas Facebook and Twitter benchmarks are more like 0.5-1%.
4. Cost Per Click (CPC)
Cost per click measures how efficiently you're reaching the people who are likely to click on your ad. It's basically the amount of clicks you have had on a particular digital ad in relation to the money you’ve spent promoting it. This is a terrific metric, as it allows you to directly see if specific ads are performing to the best potential for the budget.
Measuring your CPC can be done for multiple types of digital advertising, including social media, Google Ads, and link-building campaigns. Many platforms actually have the ability to directly measure CPCs themselves. However, if yours does not, it’s as easy as analyzing how many clicks you're getting and comparing that to the money you spent on the ad campaign.
5. Site Traffic
Another important group of metrics is your site traffic. You can analyze these through Google Analytics with ease, and they are sure to provide a clear image of where your company is headed and whether or not your marketing is truly helping you to expand your brand.
To analyze site traffic, you can stick with Google Analytics, as well as incorporate site traffic data plugins on your site. Using these will give you a clear image of your site traffic and what digital marketing campaigns are doing the most for your company.
Furthermore, analyzing site traffic and choosing to collect the right data from your website visitors can actually help you grow awareness, know who to target in the future, and better hone your buyer personas over time.
6. Return on Advertising SpenD (ROAS)
Similar to an ROI metric, but specifically for advertisements, ROAS measures the amount of money spent on advertisements in comparison to the amount of money made on sales directly linked to advertisements. Essentially, you should be making more than you spend on ads, and this is a great way to monitor whether or not your investment is ringing the register.
To measure your ROAS, take the sales revenue data (use only the sales data that can be linked to ads) and then compare this to the money spent on any and all advertisements.
By doing this, you can determine if your advertisements are actually leading to a return on your investment and make adjustments accordingly. This will also let you analyze which of your channel strategies is most effective, and help you to determine how and where your money should be spent.
7. Conversion Rates
Conversion rates indicate the percentage of visitors to your website who complete a desired goal. High conversion rates mean that your marketing campaign and website are proving to be successful - so it's a metric you really want to pay attention to.
Whether you're a B2B or B2C business, there is a standard equation to measure your website conversion rates:
Conversion Rate = Total number of conversions / Total number of sessions
Find the number of sessions to your website, and your conversion metric, through Google Analytics or your Content Management System (CMS). Next, find your conversion metric. Your conversion metric is dependent on what your goal is, and an example of a conversion metric could be number of orders, form submissions, CTA clicks, number of downloads, or something else. Once you have these numbers, simply place them into the formula.
Conversion rate is important because it gives you insight into what works and what doesn't work - ultimately showing you what people or companies want. This will help you decide whether or not your strategy is working.
Wrap Up: Analyzing your Digital Marketing Metrics
Starting with these seven metrics, you'll be able to better measure what's working and what' s not. Marketing vehicles vary by business and industry, so be sure to monitor these metrics, invest in what's working, and minimize what is falling flat.
Want help in analyzing your digital marketing metrics? Our digital marketing strategists are ready and excited to make those numbers mean something to your bottom line. Let us show you how.