Digital Marketing KPIs for 2023
KPIs are crucial data points for digital marketing teams, and we’ve identified the following seven as most effective in evaluating campaign performance:
- Return on Investment (ROI)
- Total # of Marketing Qualified Leads
- Average Customer Acquisition Cost
- LTV to CAC Ratio
- % Change in Website Traffic
- Engagement Rate
- Average Conversion Rate
KPIs are most meaningful when paired with a benchmark for success. In the table below, you’ll find KPIs linked to their corresponding benchmark. All data comes from our pool of 170+ digital marketing clients:
|2||Total # of Marketing Qualified Leads (MQLs)||40% increase YOY|
|3||Average Customer Acquisition Cost (CAC)||Organic: $942|
|4||LTV to CAC Ratio||4:1|
|5||% Change in Website Traffic||45% increase YOY|
|6||Engagement Rate||B2B: 71%|
|7||Average Conversion Rate||2.2%|
The next sections expand upon each of the digital marketing KPIs and explain what they reveal about your digital marketing campaign.
KPI #1: ROI
Your digital marketing campaign’s ultimate measure of success is ROI, which compares the amount of money spent to the overall profit. ROI is not a benchmarking statistic in the same way that the other KPIs are, rather, it provides a more holistic view of your campaign.
This makes ROI both your most significant and least important KPI. On one hand, it provides a single statistic by which you can assess the entire health of your campaign effort. On the other, there is no one-size-fits-all approach to increasing ROI if you are already investing in high ROI channels.
As a result, to address a low ROI you will need to:
- Compare additional KPIs (see below) to benchmarks to find any underperforming metrics
- Determine potential reasons those KPIs are underperforming, and implement a strategy to address those reasons
- Reevaluate ROI after three months, and repeat as needed.
KPI #2: Total Marketing Qualified Leads (MQLs)
|Total # of MQLs|
|Benchmark||40% increase YOY|
MQLs are leads that demonstrate a direct interest in your company’s products or services and originate from the intended target industry. They are a far more accurate predictor of a campaign’s success than counting total visitors, clickthroughs, leads, or other higher-funnel metrics because they demonstrate if your digital marketing strategy is reaching actual prospects, and the demographics of those prospects help you determine which markets you’re trying to attract.
MQLs are much like ROI in that they don’t provide much information on their own, and also offer a general view of campaign success. However, they are often more accessible to marketing teams than ROI tracking, and are more responsive to campaign adjustments. As with ROI, increasing your total MQLs entails examining your other, more granular KPIs and addressing issues at a lower level.
KPI #3: Average Customer Acquisition Cost (CAC)
CAC refers to the average cost of acquiring each new customer. It shows how sustainable your marketing strategy is. The best way to lower your customer acquisition costs is to invest in organic channels, which have much lower CACs than paid channels because they’re scalable one-time investments as opposed to ongoing ones.
The Marketing Channels with the Lowest Average CAC
The tradeoff is that these channels are generally slower than inorganic channels, and require a longer lead time before they begin producing a return. As a result, most companies will still use paid channels like PPC to provide short-term lead generation.
KPI #4: LTV to CAC Ratio
|LTV to CAC Ratio|
Your LTV to CAC Ratio contrasts the lifetime profit a client generates with the cost of acquiring them. A low LTV to CAC ratio combined with high CACs indicates your firm is overpaying to attract customers. However, if the ratio is extraordinarily high, it usually means your organization is not spending enough on marketing efforts and missing out on growth chances. While some firms target 3:1 for their ratio, we’ve found
You can improve your LTV to CAC ratio by lessening your CACs (see above) or increasing your average LTV by refining your targeting to reach more profitable consumers.
KPI #5: % Change in Website Traffic
|% Change in Website Traffic|
|Benchmark||45% increase YOY|
Annual Website Traffic measures how many users visit your website every year. Like ROI and total MQLs, your website traffic year over year is a general indicator of your campaign’s success. However, and unlike ROI, percent change in website traffic is not an indicator of the profit generated by your campaign. As a result, we caution against using it to gauge campaign success.
It’s not without its utility, however. Analyzing website traffic gives you a very general idea as to whether your internet presence is expanding, diminishing, or maintaining stagnant. Major changes in website traffic without accompanying website updates will also alert your SEO team to updates to Google’s algorithm.
KPI #6: Engagement Rate
|Total # of MQLs|
Engagement rate is a percentage that represents the proportion of engaged sessions to total sessions. An engaged session, as defined in Google Analytics 4, is one in which the visitor accomplishes one or more of the following:
- Reviewed several pages
- Spent at least 10 seconds on one page.
- Set off a “conversion event,” which signals that visitors completed key, pre-defined business actions.
If your engagement rates are too low, there are several possible causes, including:
- Content that fails to pique readers’ curiosity
- Ineffective keyword targeting, resulting in attracting the wrong type of customer
- The user experience and navigation are inconsistent
- Uninteresting graphics, charts, and graphs
KPI #7: Average Conversion Rate
|Average Conversion Rate|
Your conversion rate is calculated by dividing the total number of users who perform a conversion event (for example, by filling out a contact form) by your total number of website visitors. Tracking conversion rates across your digital marketing channels reveals which channels are most effective for advertising a given product or service, allowing you to make more informed strategic decisions.
If your conversion rates are low, invest in the following optimization best practices:
- Gain a better understanding of your target market. Understanding the various types of visitors to your site is the first step toward increasing conversion rates.
- Create thought leadership content that maintains the reader’s interest. Your pages must earn your customers’ attention from the top of the page until all the way down to the CTA.
- Use images and white space to keep the user’s attention. Today’s audiences are bombarded with digital content and have short attention spans. Long, visually unpleasant paragraphs will put readers off.
- Track on micro-conversions. Getting even more granular with your metrics allows you to find and address issues on each page, taking you from a few high-converting pages to a comprehensive high-converting system.
Knowing How to Use KPIs to Measure Campaign Success
Analyzing KPIs is half art and half science, and they won’t necessarily provide you with the most accurate picture without in-house experience in analyzing these metrics. If you’re struggling with where to begin, it may be time to explore collaborating with an agency like ours to assist you in discovering and analyzing the essential digital marketing KPIs.
We have 12 years of experience working with clients across a wide variety of industries. Schedule a call if you’d like to learn more about our services.
Evan Bailyn is a bestselling author and award-winning speaker on the subjects of SEO and thought leadership. Contact Evan here.