With so many metrics at your fingertips, it can be challenging to know which are useful indicators of campaign success, and which are simply adding to the white noise.
Marketing should be supporting sales and your bottom line at every stage so it’s vital business owners can distinguish between the useful indicators of marketing’s contribution to revenue and vanity metrics that look good but really don’t say much about the efficacy of your campaigns.
So, which metrics are merely a distraction, and what should you be tracking instead?
Cost per click and ad impressions
Many business owners and marketers fall foul to the allure of a reduction in the cost per click [CPC] of their paid ad campaigns. Broadly speaking, it works by dividing the total cost of a given ad by the total number of clicks that ad receives, and in theory, should provide a useful metric for determining the return on investment for ad campaigns.
In practice, a race to the bottom when it comes to CPC can result in your ads attracting less qualified traffic, and in turn, negatively impacting your conversion rates. This means that while cost per click might be low, ad spend is ultimately being wasted through a lack of conversions.
Similarly, taking an increase in ad impressions without considering where those impressions are coming from can be misleading. While a lot of people may have seen your ad, if the vast majority of viewers are not from your potential target audience, this is yet another waste of ad spend.
Instead, when it comes to paid ads, it’s useful to consider how CPC translates into your cost per acquisition. New customer revenue is the predominant growth factor for online businesses, and this requires ads that do their job: convert viewers into customers. In this case, focusing on the quality of your ad traffic should be the priority, even if this means a high CPC and lower click through rate. While this might sound counter-intuitive, ads that pre-disqualify low-quality leads that won’t translate into sales also ensure a higher overall conversion rate and lower cost per acquisition – metrics that both positively impact your bottom line.
Social likes and follows
When it comes to measuring organic impact, it’s understandable that many businesses assume likes and follows are a good indicator of how well your social strategy is going. Social media statistics such as follower count, likes and comments, while providing a nice ego boost, are more often than not simply vanity metrics if your organic social strategy is aiming to increase sales.
This holds true across every social platform. For example, your Instagram post may have garnered several thousand likes, but if your customers and target audience are not on Instagram, or if those likes are not translating into actionable insight that drives growth for your business, that time and effort can be better spent elsewhere, such as looking at how your paid ads are converting and how your cost per acquisition is integrated with your organic social performance.
Traffic and page views
Website traffic and associated page views are a perfect example of a metric that, without additional context, won’t tell you much about your marketing efforts. On paper, the more traffic and views your webpage is generating, the better. After all, sales, especially online sales, is ultimately a numbers game.
Taking a closer look, however, reveals that by themselves, traffic and views are not a reliable indicator of success. While a healthy stream of traffic might be great, if that traffic is not being converted into sales, then those year on year increases in traffic are irrelevant to your bottom line.
We might even take this further and argue that increases in traffic and views that aren’t translating into revenue are an overall negative, as constant streams of visitors that leave your website without making a purchase are actually costing you more in hosting than they’re generating for your business.
If traffic and views aren’t telling you the full story, what should you be focused on instead? A good starting point is considering not just the number of people visiting your site, but the quality of those visitors and their behaviour once they get there. A high bounce rate, for example, is a strong indicator of wider problems and visitors being unable to find what they’re looking for [or even worse – they’re finding what they’re looking for, then leaving, suggesting that you may be attracting the wrong type of traffic!], technical issues, or an overall poor user experience. Tracking visitor behaviour on your site over simply the number of visitors you receive will be far more useful in informing your marketing strategy, and indicating where improvements need to be made.
Final thoughts
While marketing metrics are tied into the overall problem of attribution, where it is not always possible to track precisely where revenue is coming from, being able to distinguish between the metrics that do feed into revenue and those that simply look nice on paper is central to leveraging the data you do have to support continued growth and sales.
