One of the most important roles for a marketing agency is to answer one, very important question when it comes to running a campaign: Did it work?
On the surface, this looks and sounds like a very simple question, but when you’re standing in front of a room with the client, those three words can be an intimidating question to think about.
How then do we know if the campaign “worked”? How can an agency be certain that the plan they put in place is actually making a difference and moving the bottom line for the client?
Introducing the KPI – otherwise known as “Key Performance Indicators”, these are metrics that businesses and agencies use to measure the effectiveness of a marketing campaign.
In this article, we’ll be going over what makes a good KPI and how they should be used to communicate performance during the course of a marketing campaign.
Key Takeaways
- Every campaign needs “Success” defined. What are we trying to accomplish with this marketing campaign? If this is NOT established, there is little to no hope of proving the campaign was a success.
- The defined “Success” has to be able to be affected by the campaign. We have to be able to affect the outcome of the goal. If not, we’re leaving the end result up to chance.
- Ongoing communication should focus around the defined “Success” of the campaign. This keeps the clients out of the weeds and unnecessary data that can cause more questions than quality decisions.
What is an “Agreed Upon” KPI?
Key Performance Indicators can take many shapes and sizes. They can differ depending on the goals of a campaign or on the person or business that is setting them. But determining success and establishing a KPI shouldn’t happen quickly. There are many factors to consider when appointing a KPI for a campaign.
What are some different examples of marketing KPIs?
| Agency KPI | Business KPI |
|---|---|
| Impressions | Revenue |
| Reach | Revenue Growth |
| CTR | New Customers |
| CPC | Customer Acquisition Cost |
| CPM | Marketing ROI |
| Website Traffic | Marketing-Sourced Revenue |
| Organic Traffic | Marketing-Sourced Pipeline |
| Keyword Rankings | Market Share |
| Leads | Qualified Opportunities |
| Cost per Lead | Cost per Customer |
| Conversion Rate | Lead-to-Customer Rate |
| Social Engagement | Customer Retention |
| Video Views | Customer Lifetime Value |
| ROAS | LTV:CAC |
| Landing Page Conversion | Profitability |
| Email Open Rate | Customer Retention |
| Campaign Performance | Business Growth |
The list above are just examples of different KPIs that are commonly used in business and marketing reports. And while reporting on these metrics can be very helpful to review the success of the campaign, they also present a problem.
What happens if an Agency and a Business are using different KPIs to determine success?
This is a very common situation. There are many instances where a marketing agency will report on KPIs that they feel represent the best indicators that the campaign is going well, only to have the client answer back to the report by saying, “but our revenue is down 10% this quarter”.
It’s this exact situation that demands “Agreed Upon KPIs”. An agreed upon KPI is a metric or metrics that is formally agreed on by both the marketing agency and the business.
Early in the strategic planning development, it’s critical that the agreed upon KPI is set. This immediately helps align the marketing strategy with the business goals and prevents miscommunication in any and all future performance analysis.
What Makes a Good KPI?
It’s important to be as specific as possible when it comes to setting a KPI. Not only does the metric need to be agreed upon by the client, but it also needs to be an effective measuring stick to evaluate the performance of the campaign.
Here are some helpful factors to consider when determining the best possible KPI to use for a marketing campaign.
Track-ability
The first factor to consider is the track-ability of the metric. This refers to whether or not you as a marketer have the ability to see if the metric changed or was affected by the campaign.
A good example of a trackable metric would be a website event. Any time someone clicks “Apply Now” or “Register” or any website element and an event is fired and recorded in Google Analytics. This is a very trackable event and one that can be very helpful in determining success.
A bad example of a trackable metric might be “Awareness”. This is a very common request by a lot of businesses who want to run branding specific campaigns. The issue with tracking general awareness is that there is no clear means of trackable data that can quickly and accurately determine marketing’s impact on general awareness.
When setting a KPI for the campaign and recommending metrics to the client, always consider whether or not you will have trackable data.
Historical Performance Data
Continuing with the idea of “Track-ability” – the next logical factor to consider is historical data. When establishing a KPI, it’s always important to consider benchmarks for success. Setting a campaign goal of increasing clicks by 20% is only possible if you know the amount of clicks that were previously generated.
There are many situations where a metric may have historical performance data, but will not be trackable for a marketing agency. For example, it’s very possible that a business may have historical data on “Event Attendance” for one of their yearly events. However, a metric like “Attendance” is a challenging metric to track prior to the actual event happening.
This is also a good situation to think about presenting alternative KPIs to meet the client’s expectations. In the event promotion situation, the marketing agency may want to consider setting the campaign’s KPI as “Pre-registrations” or “Online Registrations”.
Always consider historical performance data when establishing a KPI for the marketing campaign.
Attribution Capabilities
Are you able to see how someone converted or triggered the metric? Attribution answers the question of who gets credit. There are many situations in which multiple factors can contribute to the success of a campaign. It’s in situations like this where attribution is a necessary factor to consider in order to determine the effectiveness of the campaign.
A commonly used method of attribution lives within Google Analytics. The default channel groups within GA4 are a great attribution tool for reporting on marketing campaigns.
| Common Default Channels | ||
|---|---|---|
| Organic Search | Direct | Referral |
| Paid Search | Paid Social | Cross-Network |
| Organic Social | AI Platforms |
Clear Path to a Larger Goal
Lastly, it’s also important to remember that a KPI isn’t always the most important metric for clients. When establishing an Agreed Upon KPI, it’s common that the business will have to agree to a metric that may not directly correspond to the end metric.
For example, if the goal of a marketing campaign is to recruit students to a university – “Apply” clicks might be a good KPI to use in order to determine the effectiveness of the campaign. However, the university may be looking more closely at the final student enrollment count as the most important metric.
In this situation, while “Apply” clicks may not be the most important metric to the client, it does indicate a clear path to the final goal of student enrollment. (i.e. a student must first apply if they are to enroll).
When establishing a KPI for a campaign, always aim to assign a metric that is as close to the client’s end goal as possible, or at the very least, choose a metric that is on the path to the final goal.
Keep Your KPI Front & Center
Once the hard work is done and the agreed upon KPI is set, what absolutely cannot happen is for it to disappear when the campaign kicks off. As the campaign runs, the KPI needs to be the focal point of every conversation.
Make sure the KPI tracking is the primary focus of reporting. Highlight its performance in the reporting highlights as well as support its performance with additional metrics and data that help tell the story of the campaign.
By keeping the KPI in the conversation of every meeting, we are constantly reminding the client of their own definition of success. The worst thing that can happen is at the end of the campaign when we put together the final report and the client doesn’t remember how “Success” was originally defined.
Additionally, keeping constant attention on the KPI can also help communicate performance if someone new enters the picture. If a client goes through turnover within their organization, education on the KPI is a helpful way to prevent the new addition coming in and changing the goal of the campaign or project.
In the end, by establishing a quality KPI, we’ve solidified our chances at running the most successful campaign possible. As an agency, we should aim to align our objectives with the client’s goals and establishing agreed upon KPI helps make those pathways possible.
What is the KPI meaning in marketing?
The KPI meaning in marketing is Key Performance Indicator. A KPI is a measurable value used to track how well a campaign, strategy, or business activity is performing against a defined goal.
What is a good KPI definition?
A clear KPI definition is a measurable metric tied to a meaningful business or campaign objective. Strong KPIs are trackable, supported by reliable data, connected to a larger goal, and agreed upon by the agency and client.
What are some key performance indicators examples?
Common key performance indicators examples include website conversions, leads, cost per lead, conversion rate, organic traffic, keyword rankings, revenue, customer acquisition cost, marketing ROI, and qualified opportunities. The right KPI will vary based on the goal of the campaign.
What are some common KPI examples for marketing campaigns?
Useful KPI examples for marketing campaigns include form submissions, phone calls, online registrations, purchases, application clicks, email signups, landing page conversions, and revenue generated from marketing activity. The strongest options are metrics that can be directly tracked and connected to campaign performance.
What should marketers consider when defining KPIs?
When defining KPIs, marketers should look at how the metric will be tracked, what historical data is available, how attribution will be measured, and how closely the metric connects to the client’s larger business goal. The KPI should give both the agency and client a shared way to evaluate success.
What is the difference between a KPI and a business goal?
A business goal describes the larger outcome a company wants to achieve, such as increasing revenue, gaining customers, or growing enrollment. A KPI is the measurable indicator used to track progress toward that outcome. For example, student enrollment may be the business goal, with completed applications serving as the campaign KPI.
How do you choose the right KPI for a marketing campaign?
Start with the client’s primary business goal, then identify the closest measurable action that marketing can influence and track. Review historical performance, tracking capabilities, attribution data, and the connection between the metric and the final business outcome. Both the agency and client should agree on the KPI before the campaign begins.