KPI’s

KPI’s

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KPIs are performance metrics (measurable and quantifiable indicators) that numerically determine variables (for example: income, expenses, number of visits) that are directly related to the objectives set within a marketing strategy or annual marketing plan.

KPIs allow marketers to monitor the actions they are taking to achieve sales and the work they are doing. They allow companies to keep track of how business is going, and give them the possibility to take action to correct any small deviations or big problems that are standing in the way of their established objectives.

They also help provide an understanding of what was done well and what mistakes were made, to be able to improve the process and results. They help people learn and improve their business and marketing decision-making.

How to Define KPIs

To define what metrics (KPIs) should you use for your business, it is important to know what factors affect your business objectives and what you are trying to achieve. 

You can consider metrics that tell you where your users come from — ads, information search engines, published articles, etc. You can also consider using metrics to know how much you are spending on getting users to your store or website. 

Another KPI could offer insight into which products or services are the ones that generate higher profits if your business offers multiple products or services.

Do you know if your customers are happy? You can establish metrics to determine whether customers are satisfied or not with your company’s product or service. 

It wouldn’t be possible to identify a “main” KPI, or a unified approach to classifying them, since all companies pursue different objectives and prefer to measure different effects. However, here are some broad principles of KPI classification that you could use to develop your own project.

KPI Based on the Campaign Objective

Awareness/Positioning Campaigns

The purpose of an awareness campaign is to get in touch with a wide audience and make them remember the brand’s message or name. The objective of these campaigns is to generate awareness about the brand and what sets it apart from other brands, so that your target audience is inclined to favor it and keep it on top of mind.

To design a successful advertising strategy, you must have clear goals. Here are some objective indicators that could be met through an awareness campaign. 

  • Reach: This refers to the total number of people who have seen your ad or content. It does not matter how many times they saw it. They are individual, non-repeated people who have seen the ad.
  • Impressions: The number of times your ad or content has been shown on a screen.
  • Frequency: The number of times each person sees your ad. 
  • TRP (Target Rating Point): This is the sum of all the rating points reached by the ads of an advertising campaign. It follows the formula: reach x frequency. 
  • CPM (Cost Per Thousand): This refers to the cost paid by an advertiser per thousand impressions of an ad.
  • VTR or View Rate: The percentage of views of a video over impressions. Each platform has its definition of “view,” but a common standard is 30 seconds of playback, the length of the commercial, or an interaction with the video — whichever is met first.
  • CPV (Cost Per View): The average cost of a video view.

Conversion Campaigns

Conversion campaigns target specific user actions. For example: sales, traffic, adding items to the shopping cart, becoming leads, etc…

Some indicators to keep in mind when defining your conversion campaign objectives are:

  • CTR (Click Through Rate): The ratio of users who click on a specific link versus the total number of users who view a page, email, or ad.
  • CPA (Cost Per Action): Includes all types of conversions that materialize on a site or external application. For example: sales, registrations, downloads, etc.
  • CPL (Cost Per Lead): The average cost of obtaining a potential customer — typically refers to the moment an individual provides their contact information.
  • CPE (Cost Per Engagement): The average cost of interactions with the ad, including clicks, reactions, comments, shares, etc.
  • CPC (Cost Per Click): The average cost of a click leading to an external site or application.
  • Cost Model: While most platforms do not allow you to pay for the campaign per action, their algorithms are optimized to achieve the desired action. Typically, advertising will be charged by the number of impressions, clicks, engagements, or views.