Learn How to Leverage Your Marketing Data
Our introductory article outlined the 10 Essential Marketing Metrics Used to Measure Success. Now, it's time to get specific. This blog will focus more specifically on the metrics introduced during the introduction, explaining use cases and how you can leverage the data to improve your marketing efforts.
Once again, we will consider the ten metrics identified in the introductory article according to their place in the marketing funnel. Finally, we will discuss building a reporting structure that helps you leverage your marketing data to improve your campaigns and efforts over time.
Table of Contents
The Three Core Awareness Stage Marketing Metrics
Your metrics focus on your audience's attention and initial engagement at the early funnel stages. Calculating these metrics often involves channel-internal platforms like Facebook Insights or Google Analytics.
Calculating Your Impression Share
Impression Share = [Your Impressions] / [Total Eligible Impressions]
In marketing, impression share is most commonly used to determine comparative brand awareness in relation to close competitors. Some platforms, like Google Ads, can directly track impression share to show precisely what percentage of total searches a given campaign's ads appear on. A manual calculation may be required for other platforms and often involves guessing the total eligible impressions.
When used outside of Google Ads, impression share is often used only as a metric that adds context to others, like those discussed in this guide. It's beneficial to understand brand awareness but not on its own a sufficient success metric.
Calculating Your Digital Marketing Engagement Rate
Engagement Rate = [Total Engagements] / [Total Impressions]
Most marketers consider any type of engagement, including clicks, comments, likes, replies, shares, and retweets, as part of this equation. This metric is most helpful in channel-specific analyses due to the drastic differences of individual channels.
Engagement rate can determine the success of a given content or advertising campaign within these individual channels compared to an average benchmark. Industry average engagement rates can also help to benchmark success.
Calculating Your Digital Ads’ Cost Per Click
CPC = [Total $ Spent in a Given Campaign or Time Frame] / [Total # of Ad Clicks in that Campaign or Time Frame]
Typically used as a campaign-specific metric, Cost Per Click can help determine the efficiency of the overall campaign, individual ads, or content within that campaign. A lower CPC can indicate relevant targeting and messaging, allowing for adjustments as needed. Again, data from past drives and industry benchmarks can provide context.
The Three Core Consideration Stage Marketing Metrics
At the consideration stage, reporting moves from channel-specific platforms to dedicated reporting tools or spreadsheet-based internal calculations at the consideration stage. Here, tracking success means understanding how many potential customers are tangibly moving towards a sale and at what speed.
Calculating Your Lead Conversion Rate
Lead Conversion Rate = [Total # of Leads in a Given Campaign or Time Frame] / [Total Audience in that Campaign or Time Frame]
Marketers commonly calculate their conversion rate based on website visitors as their total audience. Still, this metric has significant flexibility depending on its use case. For example, it's possible to calculate the lead conversion rate for all Facebook content over the past year by dividing the total number of Facebook leads by the total audience reached on Facebook during that time.
Calculating Your Cost Per Lead
CPL = [Total $ Spent in a Given Campaign or Time Frame] / [Total # of Leads in that Campaign or Time Frame]
In organizations where the core goal of marketing teams is generating leads for the sales team, this metric is at or near the top in measuring marketing success. It replaces the CPC metric for an awareness-based campaign, allowing marketers to judge the efficiency of their spending and make adjustments to targeting, messaging, and other variables over time. CPL can also help marketers justify future campaign spending based on the value they provide.
Calculating Your Funnel Velocity
Funnel Velocity = ([# of Opportunities] x [Average Value of a Customer] x [Customer Conversion Rate]) / [Average Sales Cycle Length]
The number of opportunities simply describes how many leads enter the funnel. At the same time, the average value can be the average initial revenue from a customer or their CLV. The conversion rate is the percentage of leads who turn into customers. In contrast, the sales cycle length describes the average time for a prospect to move from the first touch to customer conversion.
Measuring and analyzing funnel velocity can help marketers accelerate the process or focus on channels that most contribute to that acceleration. As a result, marketing efforts and spending become more efficient.
The Four Core Decision Stage Marketing Metrics
In the final stage of the marketing funnel, metrics tend to be in-depth and require multiple sources. These key performance indicators (KPIs) require manual inputs outside of dedicated reporting tools. Still, their value in measuring success likewise rises as efforts can be tied directly to customers and revenue gained.
Calculating Your Sales Qualified Lead Rate
SQL Rate = [# of Sales Qualified Leads in a Given Time Frame] / [Total # of Leads in the Same Time Frame]
This metric becomes most relevant when marketing's core goal is generating sales-ready leads for a separate sales team. Sales Qualified Leads are usually determined through lead scoring, which assigns values to all leads based on their engagement and responsiveness. Leads with the highest score are moved on to be eligible for the sales pitch.
SQL Rate is most relevant in B2B environments, with longer sales cycles and more defined steps from awareness to customer conversion. In that context, this metric can be immensely valuable in ensuring that every effort is made to drive new prospects through the marketing funnel.
Calculating Your Customer Acquisition Cost
CAC = [Total Sales and Marketing Cost] / [# of Newly Acquired Customers]
CAC is relevant as a general indicator of marketing success but becomes especially valuable when broken down into more nuanced calculations. For instance, organizations can calculate the CAC for different audience demographics and segments, which helps determine ideal targets for future efforts. CAC is also vital to understanding how much marketing and sales have to grow the business.
Calculating Your Return on Ad Spend
ROAS = [Total $ Gained From a Campaign] / [Total $ Spent on the Campaign]
Generally calculated as a percentage or ratio, ROAS is a more modern version of ROI especially relevant in digital marketing. It allows marketers to understand better how an ad campaign contributes to the organization’s success while also outlining successful campaigns.
Calculating Your Customer Lifetime Value
CLV = [Average Order Total for a New Customer] x [Average # of Purchases Per Customer in a Year] x [Average Retention Time in Years]
For shorter customer cycles, years can be replaced by months. For Recurring revenue businesses, the formula changes slightly. The general concept, though, remains the same. CLV is immensely valuable when determining how much money to spend on a new ad campaign and setting customer acquisition goals for that campaign. Combined with CAC, it can become a comprehensive marketing ROI equation.
Turning Marketing Data From Your Core Metrics into Actionable Marketing Reports
Of course, calculating each of these metrics in isolation may not result in a relevant and comprehensive success evaluation. The crucial next step is leveraging the data to inform stakeholders and improve your marketing efforts.
That's where marketing reporting enters the equation. A few best practices can help marketing teams of any size and in any industry design reports that are both actionable and insightful:
Create a regular reporting schedule: Depending on the industry, a weekly or monthly cadence may be most valuable.
Visualize the data where possible: Charts, graphs, and tables can help better see trends, challenges, and opportunities in your marketing efforts.
Include comparative data: Both industry and year-over-year benchmarks can help put the data into context.
Create reporting templates: These templates allow for more consistent reporting over time and streamline the creation to take less time in each period.
Define your metrics and formulas: Including these definitions in the report creates an easy reference for stakeholders and minimizes confusion for potentially varying definitions.
Lead with an executive summary: The summary should show the most critical data and takeaways, along with potential recommendations and adjustments for the future.
Above all, marketing reports are only relevant and actionable when they are truthful. It's tempting to focus on the metrics that make the current campaigns look successful. At the same time, only successful campaigns will show true success and help move the organization forward, and comprehensive and honest reports are the only way to get there.
Next Steps: Finding the Tools to Measure and Report on Your Marketing Analytics
While undoubtedly valuable, the contents of this article will remain theoretical without the tools needed to track your metrics and create those reports. Our next article of the series will cover the platforms that can help you reliably measure your marketing success. Contact us for any questions or marketing discussions in the meantime.