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The Ultimate Guide to Understanding and Using Key Performance Indicators (KPIs) in Digital Marketing in 2023

Florian Cabirol
October 9, 2023
The Ultimate Guide to Understanding and Using Key Performance Indicators (KPIs) in Digital Marketing in 2023

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Identifying the best key performance indicators (KPIs) for your marketing efforts is crucial.


You could use many different KPIs to figure out how well a marketing campaign is doing. But they can generally be broken down into four categories: lead generation, engagement, sales, and customer retention. By way of example, you can follow the CPL (cost per lead) in Google Ads because you are a B2B SaaS oriented business or the number of impressions because you need to do a branding campaign.


When you choose the KPIs you want to follow for your business, you need to be really focused on results, not shiny metrics. It's really easy to have a lot of people visit, but few convert. We will try to summarize in this article some of the most common KPIs used and what they track. As a bonus, you can find some tools that you can use to track the KPIs.


Different types of KPIs for different marketing needs

Common KPIs

There are some common KPIs that you want to track in every marketing campaign.


The number of people who viewed your ad. This is the first point of contact with your prospect. The higher these metrics, the more people will know about your website. But be cautious; they don't necessarily indicate engagement or action. By way of example, if your ad is displayed to a user but they don't click on it or take any other action, it still counts as an impression. As such, impressions are often considered a top-of-the-funnel metric that indicates the number of people who have been exposed to your ad or content.


These metrics show how many times people click on your ads. You need to carefully monitor these metrics because you could have a lot of clicks but few conversions, or vice versa. So do not base any decisions solely on this KPI.


These metrics help you understand how much it costs to acquire new customers, generate leads, and drive revenue for your business. You should always keep an eye on this one because some campaigns can quickly become very expensive.


CTR : click-through rate

The click-through rate (CTR) measures the percentage of users who click on your ad after seeing it. A high CTR can show that your ad is relevant and interesting. The calculation of this metric is really simple :


CTR = number of clicks / number of impressions

CPC : Cost per click

The cost per click (CPC) measures the average cost you pay for each click on your ad. By keeping an eye on your CPC, you can make sure you aren't paying too much for clicks and that your advertising budget is being used well. The calculation is :


CPC = costs / clicks.


Often, you try to couple a very high CPC with a very high LTV. But you could have a really low CPC in a competitive niche.

Conv. rate : Conversion Rate

The conversion rate is another crucial KPI. After someone clicks on your ad, the conversion rate measures the proportion of users who complete a desired action, such as filling out a form, making a phone call, signing up for a free trial, or whatever your end goals are.


Conv. Rate = conversions / clicks.


By monitoring your conversion rate, you can determine how effective your ad copy, targeting, and landing pages are at attracting new customers.

Lead generation KPI

Lead generation is an important goal for a lot of businesses, and Google Ads can be a good way to get leads.


When using Google Ads for lead generation, there are several key performance indicators (KPIs) that you should focus on to measure the success of your campaigns. All these KPIs are mostly available on a lot of social media platforms too, like Facebook Ads or Pinterest Ads.

CPL : cost per lead

CPL measures the cost of acquiring a new lead through your marketing campaign. You always need to compare these metrics with your conversion rate and LTV. If you have a CPL higher than your LTV, you could have a big problem in your business (you spend more than you earn per user).


CPL = Costs / Leads.

Number of Leads:

One of the most important KPIs for a lead generation campaign is the number of leads generated. Because it's the main goal of your campaign, you need to focus heavily on it. If you see a high number of leads at a low cost, it's a good sign.


Engagement KPIs

The engagement KPIs are useful to measure the engagement of your users with your marketing campaigns. Because of the high number of marketing campaign types, you could find a lot of KPIs about engagement. But you would see them mainly in social or communication-marketing campaigns (like email marketing).

CPE : cost per engagement

CPE measures the cost of each interaction with your social media post or ad, such as likes, comments, and shares. By tracking your CPE, you can identify opportunities to optimize your social media campaigns and increase engagement with your target audience.


CPE = Costs / Engagement.

Engagement rate :

The social media engagement rate, which measures the level of engagement with your social media posts, is one of the most common engagement KPIs. 

This KPI considers the number of likes, comments, shares, and clicks received by your post and calculates an engagement rate as a percentage of the total number of people who saw it. 

A high engagement rate shows that your content is interesting to your audience and can help you reach more people and gain more followers on social media.


Engagement Rate = Engagement / number of impressions

Mail open rate

In email marketing, the mail open rate is a key performance indicator (KPI) that measures the percentage of recipients who opened your email. This metric is important because it shows how well your email subject line is working and how much your audience is interested in your content.


Mail Open Rate = Openened Email / Mail sent

Bounce rate :

When we talk about websites, we talk a lot about bounce rates. This KPI measures the percentage of visitors who leave your website after viewing only one page. A high bounce rate can indicate that your website's content isn't engaging enough to keep visitors interested or that your website's design isn't user-friendly. By looking at your bounce rate, you can see which pages or parts of your site need improvement.


Bounce rate = (Total number of bounces) / (Total number of visits)


A bounce is an instance where a user enters and leaves your site from the same page without interacting with any other pages.

Sales KPI

Sales KPIs are metrics used to measure the effectiveness of your marketing and sales efforts in driving revenue for your business. These metrics are critical in assessing the performance of your sales team and identifying areas for improvement in your sales process.


CPA : Cost per acquisition

One of the most important metrics It measures the cost of customer acquisition. This metric considers the total amount spent on marketing campaigns and the number of new customers generated. By monitoring your CPA, you can identify opportunities to improve the efficacy of your marketing campaigns and ensure that your marketing budget is producing the greatest return.


CPA = Costs / Turnover generated by the marketing campaigns

CAC : customer acquisition cost

This one is a bit special because they need some other cost, like COGS, in their calculation. It measures the total cost of acquiring a new customer. This metric takes into account all of the costs associated with your marketing and sales efforts, including advertising spend, salaries and commissions, and other expenses.


CAC = (Total cost of sales and marketing) / (Number of new customers acquired)

Retention KPI

One of the most useful kind of metrics among all other. Because your marketing could generate leads, it should keep your existing customers in your database too and cut the churn.

CRR : Customer Retention Rate

The CRR measures the proportion of customers who continue to do business with your organization over a specified time frame. To determine your CRR, divide the number of customers retained over a given time period by the total number of customers you had at the start of that time period. 

For instance, if you began the year with 1,000 customers and ended with 800, your CRR would be 80%.


CRR = (number of customers at the end of a given period) - (Number of new customers acquired during that same period))/ Number of customers at the start of the period

CLTV : Customer Lifetime Value

The CLTV measures the total value a customer will bring to your business over the course of their relationship with you. This metric takes into account factors like average purchase value, purchase frequency, and customer longevity. By increasing your CLTV, you can increase the overall value of each customer and improve the long-term financial health of your business.


CLTV = (average value of a purchase) x (number of purchases per year) x (customer lifespan)

Churn rate

Churn rate is another important retention KPI, which measures the percentage of customers who stop doing business with your company over a given time period. By tracking your churn rate, you can identify areas where your business may be losing customers and take steps to improve customer retention.


Churn rate = (number of customers who churned during the period) / (total number of customers at the start of the period)

How do I choose the right KPIs ?

Selecting the appropriate key performance indicators (KPIs) is essential to the success of your marketing campaigns. You need to consider multiple factors when selecting KPIs:

  1. Business objectives: The first step in selecting KPIs is to align them with your business objectives. Ask yourself what you want to achieve with your marketing campaigns. Are you trying to increase website traffic, generate leads, or improve customer retention? Your KPIs should reflect these goals. For us, it's easy; it's the number of signups on our free trial and the conversion rate from free to paid.
  2. Relevant metrics: Your KPIs should be directly tied to the success of your marketing campaigns. For example, if your goal is to increase website traffic, you might use metrics like page views, unique visitors, and time spent on the site as KPIs. For us, we saw that you could greatly improve our web traffic. So the metric we track every day is the number of impressions.
  3. Measurable metrics: Your KPIs should be measurable and trackable. This means that you should be able to collect data on your KPIs and use it to evaluate the success of your marketing campaigns.
  4. Realistic and achievable: Your KPIs should be realistic and achievable based on your resources and capabilities. For example, setting a KPI of 100% customer retention may be unrealistic if you're in a highly competitive industry. For us, we focus on getting our website to reach 100 000 visits from Google Search in 9 months. It's a high goal but too high because we have some traffic already.
  5. Time-bound: Your KPIs should be time-bound, meaning that you should set a specific timeframe for achieving them. This could be a daily, weekly, monthly, or quarterly target, depending on your business goals.


Once you've selected your KPIs, it's important to regularly evaluate and adjust them as needed. This allows you to stay on track and make data-driven decisions about your marketing campaigns. With the right KPIs in place, you can measure the success of your marketing efforts and make improvements that drive business growth.


What tools can help me ?


To measure and track KPIs in marketing, it's important to have the right tools in place. Depending on the KPIs you're measuring, you may need different tools, such as web analytics tools, social media analytics tools, or email marketing software. Some popular tools for measuring KPIs in marketing include Google Analytics, HubSpot, Hotjar, and Google Data Studio.


Track your KPI with Catchr.


With Catchr, you can track the KPIs of all your data platforms directly in Google Data Studio or Google Sheets. You can easily track and analyze metrics from your marketing campaigns because we bring data from various sources into one data hub and then redistribute it in the form you want in any data visualization tool.


With the help of Looker Studio or Google Sheets, you could access a wide range of options for data visualization, including charts, graphs, and tables. This means that you can easily visualize your KPIs and share them with your team in a way that is easy to understand.

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In this template, you will find all the metrics and dimensions you would need to get a better view of your data.

If you need more templates, you could look at our looker studio template gallery.

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In this template, you will find all the metrics and dimensions you would need to get a better view of your data thank to our integrations.

If you need more templates, you could look at our PowerBI template gallery.

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