What are KPIs in digital marketing?

Definition: What are KPIs in Digital Marketing?

Marketing KPIs are the critical, outcome-focused metrics that demonstrate progress toward your marketing and business goals. They provide a common language for performance marketing, demand generation, and growth teams to align with sales, product, and finance.

KPI vs Metric vs OKR

• Metric: Any measurement (e.g., pageviews, impressions). Useful for diagnostics but not always tied to outcomes.
• KPI: A strategically selected metric linked to a goal (e.g., lead-to-customer conversion rate for a B2B pipeline goal).
• OKR: Objective and Key Results. The objective is qualitative (e.g., “Grow e-commerce revenue”), and the key results are quantifiable KPIs (e.g., “Increase ROAS to 4.0+”).

Leading vs Lagging Indicators

• Leading indicators predict results (e.g., CTR, add-to-cart rate, free-trial activation).
• Lagging indicators confirm results (e.g., revenue, LTV, net revenue retention).

Beware Vanity Metrics

Vanity metrics look impressive but don’t move the business (e.g., raw followers, impressions without engagement). Choose KPIs that connect to conversions, profitability, and retention.

How to Choose the Right KPIs

1. Start with business outcomes: revenue growth, profit, market share, pipeline, net retention.
2. Map the customer journey: awareness → consideration → conversion → retention → advocacy.
3. Pick a North Star metric that best represents delivered value (e.g., revenue per user, activated accounts, repeat purchase rate).
4. Use the SMART framework: KPIs should be specific, measurable, achievable, relevant, and time-bound.
5. Limit to the vital few: 3–5 primary KPIs per goal, supported by diagnostic metrics.
6. Segment wisely: break KPIs down by channel (SEO, PPC, social, email), audience cohort, device, and funnel stage.

Core Digital Marketing KPIs (with Formulas and Context)

Below are the essential KPIs across channels. Use them selectively based on your goals, channel mix, and business model.

Traffic and Visibility

• Sessions and Users: Volume of visits and unique visitors.
• Channel mix: Share of traffic by source/medium (organic, paid, direct, referral, social, email).
• New vs returning users: Health of acquisition and retention.

Engagement and On-Site Behavior

• Engagement rate (GA4): Sessions with 10+ seconds, conversion, or 2+ pageviews. Higher is better.
• Bounce rate: The inverse of engagement. Lower is better.
• Average session duration and pages per session.
• Scroll depth and dwell time for content quality.

Acquisition Efficiency

• CTR = Clicks / Impressions
• CPC = Cost / Clicks
• CPM = Cost / (Impressions / 1000)
• CPA (Cost per Acquisition/Action) = Cost / Conversions
• CPL (Cost per Lead) = Cost / Leads
• CAC (Customer Acquisition Cost) = (Marketing + Sales costs) / New Customers
• MQL → SQL Rate and Lead-to-Customer Rate to ensure lead quality.

Conversion and Revenue

• Conversion Rate (CVR) = Conversions / Clicks or Purchases / Sessions
• AOV (Average Order Value) = Revenue / Orders
• Revenue per Session (RPS) = Revenue / Sessions
• ROAS (Return on Ad Spend) = Revenue from Ads / Ad Spend
• Gross ROAS (gROAS): Uses gross profit instead of revenue.
• LTV (Customer Lifetime Value) ≈ ARPU × Gross Margin × Average Lifespan (or cohort-based).
• LTV:CAC ratio guides scalable growth. Many aim for 3:1+ with reasonable payback.

Retention and Loyalty

• Repeat Purchase Rate = Customers with 2+ purchases / Total Customers
• Purchase Frequency and Time between purchases
• Churn Rate = Lost Customers / Starting Customers
• Customer Retention Rate (CRR) = 1 − Churn Rate
• Net Revenue Retention (NRR) = (Start MRR + Expansion − Contraction − Churn) / Start MRR
• NPS, CSAT, refund rate, unsubscribes.

SEO KPIs

• Impressions, clicks, and average position (Google Search Console).
• Organic CTR = Clicks / Impressions
• Non-branded vs branded traffic share for demand capture vs demand creation.
• Index coverage, Core Web Vitals (LCP, INP, CLS) for technical SEO.
• Backlinks and referring domains (quality > quantity). Note: third-party “domain authority” is directional only.

PPC and Paid Media KPIs

• Quality Score / Ad Relevance: Impacts CPC and impression share.
• Impression Share and Share of Voice.
• Cost per Conversion, ROAS, and Profit per Click.
• View-through conversions and assisted conversions for upper-funnel campaigns.

Social Media KPIs

• Reach and impressions.
• Engagement rate per post = (Reactions + Comments + Shares) / Impressions
• Follower growth rate, share of voice, and sentiment.
• Video completion rate, saves, shares.
• Traffic and conversions from social (UTM-tagged).

Email Marketing KPIs

• Delivery rate and bounce rate.
• Open rate (note: impacted by Apple’s Mail Privacy Protection; use directional only).
• Click-to-open rate (CTOR) = Unique Clicks / Unique Opens
• Unsubscribe and spam complaint rate.
• Revenue per email (RPE) and list growth rate.

Content Marketing KPIs

• Time on page, scroll depth, and engaged sessions.
• Downloads, content-assisted conversions, email signups.
• Backlinks earned and topic authority across clusters.
• Content ROI = (Attributed Revenue − Content Costs) / Content Costs

E-commerce KPIs

• Add-to-cart rate and cart abandonment rate = (Carts − Purchases) / Carts
• Checkout completion rate and refund rate.
• Units per transaction and revenue per visitor.
• Coupon usage and discount impact on margin.

B2B SaaS and Lead Gen KPIs

• Pipeline generated (SQL value) and Win rate.
• Demo/meeting booked rate and no-show rate.
• Trial-to-paid conversion and activation rate (product adoption).
• ARR/MRR, expansion revenue, payback period = CAC / (Gross Margin Monthly Contribution)
• PQLs (product-qualified leads) for PLG motions.

Quick Reference Table

Setting KPI Targets and Benchmarks

1. Baseline your data: Use 6–12 months of historical data to find medians and seasonality.
2. Use directional industry benchmarks: Helpful to sanity-check goals but not a substitute for your own context.
3. Model your funnel: Work backward from revenue using realistic conversion rates and AOV to set channel targets.
4. Include margin: Optimize for profit, not just revenue. Monitor contribution margin and gROAS.
5. Account for attribution: Some channels assist conversions more than they last-click. Use assisted metrics and incrementality tests.

Tracking KPIs: Tools, Tags, and Dashboards

Essential Tools

• Analytics: GA4 or an alternative analytics platform for events, conversions, and cohorts.
• Search Console: Organic search queries, CTR, and indexing.
• Ad Platforms: Google Ads, Meta Ads, LinkedIn Ads, TikTok Ads for channel metrics.
• Tag Management: Google Tag Manager or similar for event tagging.
• CRM/MA: HubSpot, Salesforce, Marketo for lead and pipeline tracking.
• Attribution/CDP: Segment, mParticle, or server-side tracking to improve data quality.
• Dashboarding: Looker Studio, Power BI, Tableau for reporting.

Implementation Best Practices

• Define conversions clearly: Purchase, lead submit, trial start, demo booked, activation, subscription.
• Use UTM parameters consistently for source, medium, campaign, content, term.
• Adopt naming conventions across platforms for clean reporting.
• Tag micro-conversions: scroll, video views, add-to-cart, checkout steps for diagnostics.
• Validate data: Test events and deduplicate across platforms.
• Segment: New vs returning, device, geo, audience cohort, landing page.

Dashboard Tips

• Organize by funnel stage: awareness, consideration, conversion, retention.
• Show trends, targets, and variance (MoM, YoY).
• Include annotations for campaign launches, site changes, algorithm updates.
• Add diagnostic drill-downs: channel → campaign → ad → keyword → landing page.

Attribution, Incrementality, and Privacy

Attribution determines how you credit conversions to channels and touchpoints. With cookie deprecation and privacy regulations, triangulating performance is essential.

Attribution Models

• Last-click: Simple but undervalues upper-funnel efforts.
• Position-based: Credits first and last touch more than middle.
• Data-driven: Algorithmic models based on observed contribution (requires data volume).
• Media Mix Modeling (MMM): Statistical, privacy-friendly, uses aggregated data to measure channel lift.

Measure Incrementality

• Run geo split or holdout tests to isolate lift.
• Compare branded vs non-branded trends to detect cannibalization.
• Monitor assisted conversions and view-throughs with caution.

Privacy and Data Quality

• Comply with GDPR/CCPA. Use consent mode and server-side tagging where appropriate.
• Respect iOS ATT and email MPP; prefer click-based and conversion modeling over open-based KPIs.
• Document data definitions and maintain a change log for tracking updates.

Common KPI Mistakes to Avoid

• Tracking too many KPIs without prioritization.
• Optimizing to vanity metrics (e.g., impressions) instead of revenue or profit.
• Ignoring margins and returns after discounts and refunds.
• Misattribution leading to overinvestment in lower-funnel channels only.
• Not segmenting by audience, device, or landing page.
• No statistical rigor: making decisions on small sample sizes; not using A/B testing.
• Set-and-forget dashboards without action plans or owners.

Example KPI Sets by Business Model

E-commerce Store (DTC)

• Primary KPIs: Revenue, gROAS, RPS, AOV, Repeat Purchase Rate.
• Supporting: Add-to-cart rate, checkout completion, refund rate, CAC, LTV:CAC.
• Channel KPIs: SEO non-branded clicks, paid search ROAS, Meta conversion rate, email RPE.

B2B SaaS

• Primary KPIs: Pipeline generated, SQL-to-win rate, CAC payback, NRR.
• Supporting: MQL→SQL rate, demo booked rate, trial activation, PQLs, content-assisted pipeline.
• Channel KPIs: LinkedIn CPL, non-branded organic demo requests, partner-sourced opportunities.

Local Service Business

• Primary KPIs: Qualified calls/leads, booking rate, CAC, revenue per job.
• Supporting: GMB profile views, call-through rate, review volume and rating, referral rate.
• Channel KPIs: Local SEO impressions, call extensions CTR, map pack rankings.

Content Publisher

• Primary KPIs: Sessions, engaged time, subscribers, ad revenue RPM.
• Supporting: Scroll depth, newsletter CTOR, topic cluster performance, backlinks earned.
• Channel KPIs: Search impressions, social shares, push notification CTR.

90-Day Action Plan to Operationalize Marketing KPIs

Days 1–30: Align and Instrument

• Define business objectives and 3–5 KPIs per goal (with formulas and owners).
• Audit tracking: GA4 events, conversions, UTM governance, consent, pixels.
• Implement missing tags (form submits, add-to-cart, checkout steps, demo requests).
• Create a data dictionary and naming conventions.

Days 31–60: Baseline and Visualize

• Build a KPI dashboard with trends, targets, and annotations.
• Establish baselines (6–12 months where possible) and seasonality.
• Set channel-level targets based on funnel math and margin goals.

Days 61–90: Optimize and Govern

• Launch A/B tests on high-impact levers (ad creative, landing pages, pricing).
• Run at least one incrementality test on a major channel.
• Implement a weekly performance review and monthly QBR cadence.
• Document learnings, update playbooks, and refine KPIs as needed.

FAQs

What’s the difference between KPIs and OKRs?

OKRs define the goal and the key results. KPIs are the measurable outcomes you track to reach those results. KPIs often power the “KR” portion of OKRs.

How many KPIs should I track?

Keep 3–5 primary KPIs per core objective. Add diagnostic metrics for troubleshooting, but don’t let them distract from outcomes.

What’s a good ROAS?

It depends on margins and cash flow. A 4.0 ROAS might be great for high-margin products and insufficient for low-margin ones. gROAS (using gross profit) is more reliable.

Which KPI is most important?

Your North Star. For e-commerce, often profit or contribution margin. For SaaS, NRR or payback period. Choose the one that aligns best with sustainable growth.