While some KPIs should be channel specific, others should be related to overall business goals. Most organizations will need both kinds of KPIs, especially if they use different teams or individuals to manage different channels. Which KPIs are right for you depends on your marketing mix. Read on for an introduction to digital marketing KPIs. This article also introduces you to the concepts of Cost per action and Return on investment.
Cost per lead
The cost per lead is a measure of the total cost of generating a new lead. In other words, the advertiser pays for each new lead that they generate. The cost of a lead is dependent on many factors, including the size of your company and the amount of annual revenue. You should also consider your budget and the type of offer you are offering. Below are some guidelines to help you figure out your cost per lead.
The cost per lead metric measures the effectiveness of marketing campaigns by comparing the overall cost to the cost of generating a single new prospective customer. A lead is a person who has shown interest in a product or service by completing a desired goal. Cost per lead is closely related to the cost of acquiring new customers. Using this metric will allow your marketing team to determine how much money it costs to acquire a lead.
Cost per action
Cost-per-action in digital marketing is the method of calculating the amount of money it costs to acquire one paying customer. This is an important measurement of digital marketing success and helps businesses understand the investments required to gain one customer through paid marketing. Cost-per-action campaigns evaluate the performance of an ad based on the number of times a visitor takes a particular action, such as purchasing a product, downloading a document, or signing up for a newsletter or membership.
Cost-per-action is an effective marketing technique that can generate a higher number of actions and potential customers. Cost-per-action is different from CPC and PPC in that it rewards those actions that lead people toward making a purchase. Rather than paying for clicks and impressions, cost-per-action pays for every action that leads to a purchase. Those who use cost-per-action should always make sure that they do their homework before entering into a cost-per-action negotiation.
Cost per conversion
When calculating the cost per conversion for your digital marketing campaigns, you need to consider the total cost of each click or visitor. A conversion occurs when a visitor enters their contact details in exchange for a specific action, such as receiving a free asset, getting more information, or speaking to a specialist. The next step in the conversion metrics is to calculate the cost per conversion. This can help you adjust your campaign strategies accordingly.
The calculation of cost per conversion in digital marketing requires that you determine the number of conversions versus the total costs of a marketing campaign. For example, if you pay $100 for an advertisement, you will get five conversions – two leads and one purchase. Therefore, your CPC will be $20 per conversion. In the case of a blogger who sells ad space, this calculation is very useful. The cost per conversion can help you gauge whether a particular channel is worth continuing.
Return on investment
For every business, determining a return on investment in digital marketing is vital. The ROI tells you if your marketing efforts are generating revenue. A negative ROI means expenses are higher than returns and the company is losing money. A positive ROI, on the other hand, shows the actions you take were helpful and had the desired impact. So, how do you measure ROI in digital marketing? Let’s take a look at the various metrics you can use to determine whether your digital marketing efforts are producing a positive ROI.
Often, ROI is difficult to measure, mainly because many marketers disagree on what constitutes a positive ROI. For example, a positive ROI is not generated in the first month of a campaign. Often, ROI is higher when a business is able to measure the ROI of a campaign over a longer period of time. Another issue with ROI is that it does not take into account the length of time that a campaign must run before you can see the full impact. Looking for a webmaster company? Contact Phoenix SEO Geek today!