Understanding online marketing analytics

Often when starting out in business our marketing decisions are based on hunches and predictions. This often results in money wasted before you work out if you are getting it right.

Luckily these days there are loads of metrics and tools which eliminate the guesswork in marketing, however you often feel like you need an online marketing degree to understand them.

Here is an explanation of the key online marketing metrics that will guide you to make better business decisions:

Traffic generation

For most businesses, generating traffic online is essential. If you’re not generating traffic to your website, online store or blog, you won’t have leads. If you don’t have leads, you will not have sales.

Traffic generation will tell you if your marketing efforts are making financial sense. It measures how people are mainly finding your business, who are they, and where they are coming from. This is the data you need if you’re planning to improve your site’s rankings in search engines and/or are investing in Pay-Per-Click (PPC) advertising.

1. Overall site traffic – Aside from the total number of page views, you must focus on how many unique visitors you are getting per month. This is an indicator if your reach is growing.

2. Traffic sources – Reveals the source of your traffic and keywords that brought them to your website. Using this insight, you’ll be able to decide which channels to invest in and which keywords to use for your next campaigns.

  • Direct visitors – the ones that visit your site by typing your URL in their browser
  • Search visitors – the ones that visit your site based on a search query (search engines)
  • Referral visitors – the ones that visit your site because it was mentioned on another blog or site.

3. Mobile traffic ­­–Increasingly users are searching using mobile devices so it’s important to measure how many accessed your site that way. This will give you an understanding of the relevance of mobile sites, apps and ads and how they might drive business to you.

4. Click Through Rate (CTR) – When you do Pay-Per-Click (PPC) marketing (e.g. AdWords, traditional banner ads, social ads, or paid promoted content) you will want to know how many people actually clicked on those ads. The ratio showing how often people who see your ad end up clicking it is called CTR. You use this metric to measure how well your keywords and ads are performing. A high CTR means that those who click your ads find it relevant and useful.

5. Cost Per Click (CPC) – Refers to the actual cost you pay for each click in your pay-per-click (PPC) marketing campaigns. The cost is determined either by a daily budget that you have pre-set or through a bidding process.

Conversion metrics

Overall, it’s essential to know how well your marketing spend is returning you money in sales. Some website platforms will give you traffic, lead and conversion data or any site can create conversion goals in Google Analytics to help track the same.

1. Conversion Rate (CVR) – The percentage of visits to your site that result in a “conversion”. It’s calculated as Conversion Rate = Number of Sales / Number of Visits. Although there are people who argue that this is an inaccurate way of measuring marketing success, conversion rate is still useful if you take other numbers into account alongside overall conversion rates. You can likewise break it down by channel, visitor type, task, and so on.

2. Cost Per Lead (CPL) – A metric that defines the lead conversion ratio of a particular campaign and corresponding cost; this shows whether a digital campaign is profitable or not.

3. Bounce Rate – This is the rate at which new visitors visit your landing page and immediately leave without doing anything. A high bounce rate is indicative of many things, including weak or irrelevant sources of traffic and landing pages that aren’t optimised for conversion (e.g. poor design, poor or irrelevant content, low usability or long load times).

4. Average Page Views Per Visit – This is the best way to measure the behaviour of a website visitor. More page views per visit means more chances for engagement with website visitors. This, in turn, increases the chance to convert them into leads or paying customers.

5. Average Time on Site – This is the amount of time (in minutes) visitors have spent on your site across all visits. You need this to gauge which content is relevant so you can create more of it.

6. Average Cost Per Page View – You can control your investment into a paid digital marketing channel like PPC by knowing the average cost per page view and the amount of revenue you can generate from a particular page. Your cost per page view must be significantly lower than the revenue you can generate from the page in order to gain profit from your campaigns.

7. Rate of Return Visitors – Your returning visitors can be your existing customers or previous visitors who have found time to go back and are now ready to take an action. Either way they’re coming back for a reason. You need this data so you know how to improve your content to entice repeat visitors to become paying customers.

8. New/Unique Conversion – A first-time visitor interacts with your site very differently from a returning visitor. To improve first-time visitors conversions, you need to isolate them from the conversion rates of your returning visitors and find out what they see when they visit the website for the first time and how you can improve that experience. This is your chance to reduce the bounce rate for first timers. Even if your visitors don’t convert, it’s still important to monitor their behaviour on your site so you will know how to influence them to do more. So it may also be worth it if you measure the “Interaction Per Visit” and “Value Per Visit” (e.g. visitor leaves a comment or a review).

9. Exit pages – This is closely related to your bounce rate. The exit pages are your final call to action or conversion page where you lost your visitor which, by the way, isn’t always your home page. This will allow you to study your exits so you’ll figure out at what stage in the process your visitors are exiting the site or abandoning their shopping cart. Then, optimise the process accordingly.

Revenue metrics

You will not know if your marketing efforts are successful if you don’t measure your revenue metrics. The purpose of revenue metrics is to allow you to make adjustments on how you can improve your content or landing page for better engagement, higher conversion, and bigger revenues.

1. Return on Investment (ROI) – If you’re not measuring ROI, what you’re doing is not marketing but gambling. You are spending your marketing dollars without knowing where they are going. ROI will help you identify which area in your digital marketing campaign is driving sales and revenue, and which areas needs improvement.

2. Cost to Acquire a Customer (CAC) –If ROI is measured by the number of new paying customers for a given time period, CAC is the total of your marketing and advertising costs for a particular time period divided by how many new paying customers were generated during that same period.

Admittedly, these are a lot of metrics to monitor but you don’t need to look at every single one of them every day because that would be exhausting. There are online dashboards like Klipfolio, Zoho, Tableau, etc. that can help to aggregate these metrics automatically in one spot where it’s easier to consolidate all your data to create dynamic reports.

Since starting her outsourced national marketing consultancy Marketing Angels in 2000, Michelle Gamble has helped hundreds of SMEs get smarter marketing. Michelle helps businesses find more effective ways to grow their brands and businesses.


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