Measure Campaign Success: Essential KPIs and Metrics Based on Campaign Objectives
July 19, 2023
Discover the crucial KPIs you need to monitor to unlock the full potential of your advertising campaigns.
Measuring is the cornerstone of improvement. After all, what really matters when it comes to advertising? Results. Luckily, the era of shooting in the dark is long gone. Today, marketers have an ability to unlock the true potential of advertising success with key performance indicators. KPIs help you monitor and track your results in order to optimize campaigns by making data-driven decisions.
Yet, among the countless metrics, some bear greater significance in empowering the efficacy of your ad strategies. The most relevant for your business KPIs are like the guiding stars that illuminate your path to success. Understanding which KPIs truly matter helps you to allocate resources strategically and take proactive measures that resonate with your target audience.
Let’s explore the most essential KPIs and metrics that marketers need to monitor across different campaign objectives. From lead generation to brand awareness, traffic to conversions, we’ll share the secrets of each KPI's measurement and its implications, so you could easily decide which metrics can help you achieve your campaign objectives more efficiently.
Why monitor KPIs?
Monitoring metrics is not just about tracking numbers. Let’s take a look at a few reasons why metrics monitoring is crucial:
- Performance evaluation
By analyzing key indicators, marketers can identify what is working well and what needs improvement. Metrics provide a clear picture of how the campaign is performing against set goals.
- Optimization opportunities
Metrics act as a compass, guiding marketers toward areas that require optimization. By identifying underperforming metrics or areas with room for improvement, you can refine strategies, target specific pain points and make necessary adjustments.
- Campaign accountability
Monitoring KPIs allows marketers to showcase the impact of their efforts to stakeholders and decision-makers. Metrics help in demonstrating the value and effectiveness of marketing initiatives, facilitating transparent communication and informed discussions.
- Real-time adjustments
By closely monitoring metrics, marketers can identify emerging trends, spot potential issues, and respond promptly. This agility allows them to seize opportunities, address challenges, and adapt their strategies.
But what are the metrics that are so helpful? It’s time to take a closer look at some of the most important advertising KPIs for marketers in 2023:
1. Return on Ad Spend (ROAS)
ROAS is one of the most important marketing KPIs. It reveals the financial gains derived from a specific investment, illustrating the returns achieved relative to the initial spend. Simply put, ROAS tells you how much money you get by investing a certain amount. For instance, if you invest $1 in advertising and get $2 back, that's a 100% ROAS and an exceptional outcome. Thus, ROAS is essential for evaluating whether you are getting out more than you invest. The higher the ROAS, the better your performance.
To calculate ROAS, divide the revenue attributed to your ad campaign by the cost of that campaign multiplied by 100.
2. Cost per Acquisition (CPA)
CPA refers to the cost of acquiring a single user, regardless of whether they become a paying customer or not. Usually, it’s better to keep CPA as low as possible to be profitable. Cost per acquisition reveals the financial impact of your ad campaigns and allows you to reallocate marketing budgets and ad spend accordingly.
Average cost per acquisition is calculated by dividing the total marketing cost (including marketing and sales costs, and at times, even team salaries) by the total number of conversions. For example, if your ad receives 2 conversions, one costing $2.00 and one costing $4.00, your average CPA for those conversions is $3.00.
3. Lifetime Value (LTV)
LTV metric shows the total revenue a business can expect to generate from an average customer over the entire duration of their relationship with the company. It provides valuable insights into the long-term profitability of retaining customers and fostering their loyalty. So basically LTV shows the financial worth of each customer to the business, considering their repeat purchases, additional services availed, and overall lifetime engagement.
LTV is ususally calculated by multiplying the average revenue per user by the average customer lifetime.
4. Customer Acquisition Cost (CAC)
This KPI reveals how much it is required to spend to acquire a paying customer. Understanding your CAC is crucial in determining the appropriate pricing for your service or product. This metric goes hand in hand with LTV. The optimal ratio between these two metrics is approximately 1:3 (CAC:LTV). Simply put, you should only spend a fraction of the money that the customer is expected to spend with your business to acquire them as a paying customer.
CAC is calculated by dividing all sales and marketing costs by the number of new customers gained within a specific period.
Remember that the optimal values for these metrics may vary depending on factors such as industry, target audience, and campaign objectives.
Now it’s clear that monitoring metrics is a fundamental aspect of any successful advertising campaign. It’s time to figure out how you decide which metrics are important in your particular case. Throughout this exploration, we will focus on five most popular campaign objectives as an example, namely reach, traffic, lead generation, brand awareness, and conversions.
For each campaign objective, we will list the essential metrics that need close attention with brief description given, so you could clearly see why each metric was chosen for a particular campaign objective. Thus, by understanding unique metrics that matter most within these objectives, you’ll be able to choose KPIs for achieving your goals.
The Reach campaign objective is centered around maximizing the visibility of your ad to a broad audience. It focuses on delivering your message to as many unique individuals as possible within your target audience. Unlike other objectives that prioritize specific actions, the primary goal of a reach campaign is to ensure your ad reaches a vast number of users.
It is appropriate to select reach as a campaign objective when, for example, introducing a new product or brand to the market. The reach campaign can effectively create awareness and generate interest among a wide range of potential customers. Or, for instance, promoting time-sensitive deals, sales, or events to ensure the maximum number of people become aware of the limited-time opportunity.
Let’s now have a look at important metrics to monitor when measuring Reach:
Impressions represent the total number of times an ad is displayed to users, regardless of whether they interacted with it. The higher the impressions, the greater the potential Reach
Counting: Ad platforms count each instance an ad is shown on a user's screen as one impression.
Frequency represents the average number of times an ad is shown to a user within a specific time period. Too low a frequency may result in low ad recall, while too high a frequency might lead to ad fatigue. Strive for an average frequency that keeps your brand top of mind without overwhelming users.
Counting: It gets calculated by dividing your total ad impressions by the ad reach.
3. Unique reach
Unique reach measures the number of distinct users who have been exposed to an ad. It provides a more accurate estimate of the actual audience size. A higher unique reach indicates that the campaign has successfully reached a larger audience.
Counting: Unique reach counts the number of individual users who have seen the ad, eliminating duplications.
These metrics play an essential role assessing the performance of reach campaigns. Take a closer look at them if you want to effectively expand audience and maximize brand visibility.
The Traffic campaign objective is designed to drive a higher volume of relevant and potential customers to a website, landing page, or specific destination, encouraging them to take action by clicking on the ad and visiting the designated web page. It primarily measures the number of link clicks and website visits generated by the ad. It provides insights into the ad's ability to pique audience interest and encourage further engagement.
Traffic campaign is best suited when it comes to website or E-commerce launch, as it helps kickstart user visits, promoting the platform and generating initial interest. Moreover, when seeking to attract potential leads, a Traffic campaign drives visitors to a landing page where they can provide contact information or sign up for newsletters, thus generating leads.
Here are five important metrics to monitor when launching a traffic ad campaign:
Clicks represent the total number of times users click on an ad to visit the designated destination. A higher number of clicks indicates increased user interest and engagement.
Counting: Clicks are counted each time a user interacts with the ad by clicking on it.
2. Click-Through Rate (CTR)
CTR is the percentage of users who click on an ad after viewing it. It indicates the ad's relevance and attractiveness to the target audience. A higher CTR suggests that the ad resonates well with the audience. While average CTRs vary by industry, a good result might range between 2% and 5%.
Counting: CTR is calculated by dividing the total number of clicks by the total number of impressions and multiplying by 100.
3. Cost per Click (CPC)
CPC measures the average cost of each click on an ad. Monitoring CPC helps assess the cost efficiency of the campaign by determining the average cost incurred for each click generated. A lower CPC indicates efficient cost management and better return on investment.
Counting: CPC is calculated by dividing the total ad spend by the number of clicks.
4. Bounce Rate
Bounce Rate represents the percentage of users who leave a website or landing page without taking any further action after arriving. A lower bounce rate suggests that users find the website or landing page engaging and relevant. A good result might range between 30% and 50%, but it varies across industries and campaign goals.
Counting: Bounce Rate is calculated by dividing the number of visitors that leave a website before interacting with it in any way by the total number of visits and multiplying by 100.
5. Time on Site
Time on Site measures the average duration users spend on a website or landing page after clicking on an ad. A longer time on site indicates user engagement and interest in the website's content. The desired duration varies based on the nature of the website, but a good result might range between 1-3 minutes.
Counting: Time on site is calculated by tracking the duration of each visit and averaging the results.
Monitoring and analyzing these metrics can guide marketers in optimizing their traffic campaigns. Take them into consideration if you’re aiming at increasing click-through rates, reducing bounce rates, and driving valuable traffic.
The Lead Generation campaign objective revolves around capturing and acquiring potential customers' information, such as names and email addresses. Its primary focus is to build a database of interested prospects, allowing businesses to nurture and convert them into loyal customers through subsequent marketing efforts.
You might want to launch a lead generation campaign for providing valuable resources, such as e-books, whitepapers, or guides, that can encourage users to exchange their contact information. Lead generation campaigns are also ideal for promoting webinars, workshops, or events, or offering exclusive discounts or special deals.
To track the effectiveness of lead generation campaign it’s essential to keep track of the following metrics:
1. Conversion Rate
Conversion Rate measures the percentage of users who take the desired action, such as filling out a form or providing their contact information. A higher conversion rate indicates the campaign's effectiveness in generating leads. While average rates vary by industry, a good result might range between 2% and 5%.
Counting: Conversion Rate is calculated by dividing the number of conversions (leads) by the number of ad interactions or clicks and multiplying by 100.
2. Cost per Lead (CPL)
CPL quantifies the average cost incurred for acquiring each lead or conversion. Monitoring CPL helps evaluate the campaign's cost-effectiveness by calculating the average expense incurred to generate each lead. A lower CPL suggests efficient cost management and a better return on investment.
Counting: CPL is calculated by dividing the total ad spend by the number of leads.
3. Lead Quality
Lead Quality evaluates the relevance and value of acquired leads by considering factors such as demographics, interests, or engagement levels. Evaluating lead quality helps businesses prioritize and focus on leads with higher conversion potential.
Counting: Lead quality is typically assessed through manual or automated evaluation processes based on predefined criteria.
The following metrics allow marketers to improve their lead capture strategies, refine lead nurturing processes, and improve overall conversion rates, ultimately driving business growth and revenue.
The Brand Awareness campaign objective aims to enhance brand visibility and recognition among the target audience. Unlike campaigns focused on specific actions or conversions, the primary goal of an awareness campaign is to create a lasting impression, generate awareness and establish brand presence.
Awareness campaigns are the best choice when it comes to introducing a new brand or undergoing rebranding efforts. For launching new products, an awareness campaign generates interest and curiosity among potential customers, setting the stage for future consideration and purchase. Awareness campaigns are also suitable for promoting events, raising awareness about social causes or important public service messages.
Important metrics to monitor when launching brand awareness campaign are:
Monitoring the reach of your ad provides insights into the number of unique users exposed to your message, reflecting the campaign's potential impact on a broad audience. A higher reach suggests increased exposure and potential for brand awareness.
Counting: Reach is calculated by aggregating the total number of unique users exposed to the brand's messaging through various mediums.
2. Share of Voice
Share of voice refers to the brand's visibility and share of conversations in a specific industry or market. A higher share of voice signifies a stronger brand presence and a larger portion of relevant conversations.
Counting: Take the number of your brand mentions, divide it by the total number of any brand mentions in the market, and multiply by 100.
3. Brand Recall
Brand recall measures the audience's ability to remember and recognize a brand after exposure to a campaign or ad. A higher brand recall indicates that the campaign successfully resonates with the audience and leaves a lasting impression. The desired result varies, but a good recall rate might range between 40% and 60%.
Counting: Brand Recall is typically evaluated through surveys, interviews, or recall tests conducted among a sample of the target audience.
With given brand awareness metrics you can easily assess your brand's reach and impact, and make informed decisions to enhance brand visibility and recognition in the market.
The Conversions campaign objective centers on driving specific actions or desired outcomes from users, such as making a purchase, signing up for a newsletter, or completing a form. It measures the number of successful actions taken by users after interacting with the ad.
Conversions campaigns are well-suited for promoting products and driving online sales, aiming to convert users into paying customers. Conversions campaigns also can effectively drive app installations, encouraging users to download and engage with mobile applications. When offering free trials or demo versions of products or services, conversions campaigns can prompt users to sign up and experience the offering.
Here are five important metrics to monitor when measuring conversions:
1. Conversion Rate
Tracking conversion rate can indicate the percentage of visitors who took the desired action (e.g., filling out a form or making a purchase) after clicking on the ad. A higher conversion rate indicates the campaign's ability to attract qualified leads that have a higher probability of becoming paying customers. The average good conversion rate is somewhere around 2% to 5%.
2. Cost per Conversion
Cost per conversion is a metric that calculates the cost of getting one new customer or turning a lead into an actual sale. A lower cost per conversion suggests efficient cost management and better return on investment.
Counting: CPC is calculated by dividing the total cost of a marketing campaign by the number of conversions.
3. Cost per Click (CPC)
CPC is good not just for traffic campaigns, but also for conversion campaigns. measures the average cost spent for each click on an ad. Monitoring CPC helps assess the cost efficiency of the campaign. A lower CPC indicates efficient cost management and better return on investment.
Keeping an eye on these conversion metrics will enable you to evaluate the effectiveness of your conversion strategies, optimize the user journey, and maximize the return on your marketing investments.
It is clear now that monitoring and analyzing key performance indicators is extremely essential for the success of ad campaigns. By aligning KPIs with specific campaign objectives, you can gain valuable insights into the performance and effectiveness of your campaigns. Continuously refining and adapting strategies based on KPI insights, you will unlock the full potential of your advertising efforts and pave the way for sustainable growth and success in the dynamic world of digital advertising.
What is more, automated rules coupled with regular KPI monitoring grant marketers a powerful combination of efficiency and data-driven precision. Start automating your ads with AutomatedRules today. Need some help or have questions? Book a demo with our Customer Success team or contact us to start your marketing automation journey.