How do we evaluate the success of a digital campaign? What indicators should we use to measure against which type of marketing goals? In this lesson, I'll go through some of the most commonly used KPIs in digital marketing and brand communication. First, let's take a closer look at how we measure the effectiveness of your digital assets, mainly your website. Now, regardless of the type of website you run, its success is measured according to how well it meets the following three objectives. First, does it generate traffic? Are there enough visitors to your website? Are they your intended targets? Second, does your website drive conversions? Does it entice visitors to engage in some type of desired behavior, such as registration or content engagement? Third, does it help generate revenue? This framework for evaluating websites is a useful tool for determining which actions will be most beneficial for the success of a website. Now, let's take a look at each one of these measures. First, traffic. Websites can earn 3 types of traffic, or visitors. Direct traffic from visitors who directly typed the website URL into the browser. Referral traffic from those Internet users who clicked on the link to the site from another site. And search traffic from users lending on your site from following the link on a search engine results page. Though search traffic can technically be considered referral traffic, it has several important strategic distinctions in terms of how the traffic is generated, and it should be considered and evaluated separately. Direct traffic comes either from offline advertising activities, such as someone seeing a billboard or television commercial featuring the website's URL and later visits a site directly, or from habit. For example, one of the most searched words on Google is Google. People simply typing Google in the search engine Google to land on Google page. This is an example of habit. Personally, I visit the New York Times site so much that I often automatically type in newyorktimes.com whenever I open a new web browser window. Direct traffic to a brand's website is a great performance indicator of its loyalty. It can also be used to measure the success of an offline to online campaign. For example, a short-term surge in direct traffic can be used to gauge the effectiveness of a billboard, or a TV advertising campaign, in which the websites URL is promoted. Referral traffic can be paid or unpaid. Paid referral traffic comes from banner ads, text ads, rich media ads, or video ads that a website has paid to display on other websites. As such, referral traffic is a direct measure of the success of these efforts. Unpaid referral traffic refers to any visitors that come to the website from any links that are not paid for. This is a good measure of a brand's credibility and presence. Search traffic can also be further categorized as unpaid or paid. Unpaid search traffic is any traffic that comes to a site from clicks on the organic search results of a search engine's result page, whereas, paid search traffic comes from ads on a search engine result page that accompanied organic results. Now, let's look at the second KPI for our website: conversion. A conversion is a target action that you wish visitors to take. It is most easily understood in the context of online retail, or e-commerce. In e-commerce, a visitor has converted when he or she makes a purchase from the site. The percentage of visitors who convert, or called conversion rate, is one of the most important indicators of a retail website success. Not all websites are retail websites however. So, a conversion can be defined in many different ways depending on the type of website you run. For example, the number of people who subscribed to your newsletter provided contact information or made a referral after visiting your website can all be considered conversions if these actions match your marketing goals. Of all different types of websites, conversion on media website is perhaps the most difficult to define. Media websites make money by exposing users to advertisements. They can expose users to more ads, and thus make more money if they can keep users engaged. So, for many media sites, engagement means getting more page views, typically by encouraging visitors to view more pages during a visit before other media sites. This means enticing users to view, explore, and consume more content. You must be careful when you define conversion from different types of media websites. Finally, since the ultimate goal of marketing is to drive revenue, you should always consider revenue as an important KPI. For a website, revenue comes as a result of generating conversions. So, in some cases, revenue is directly linked to conversion measures. As an example, for retailers, conversion as measured by product purchases or lead generation can easily be translated into revenue performance. However, revenue performance should not be directly calculated from conversion rates because each conversion can lead to the purchase of different products with different margins. Consumers may also be led to the same website by different incentives and promotional strategies. So, depending on the type of websites you manage, and your marketing goals, you should choose traffic, conversion, or revenue to measure the site's success. Now, once you identify the right KPIs, it is time to focus on the specific metrics. Because, any commercially available web analytics package will provide dozens of different metrics that can be broken down or aggregated in hundreds of ways. It is critical to understand the various metrics that help make sense of analytics data. Basic metrics of web analytics include: pageviews, sessions, users, time on page, entry, and exit. A pageview, or hit, occurs anytime a user accesses a page on a website. A session is defined as any time a user enters a website. A session may consist of one, or more page views. A user is someone who creates at least one session but may make multiple visits or sessions. Time on page is the amount of time the user spends on a page before it navigated to a different page. An entry is the first page view of a visit and is called the entry point which is often not the homepage. An exit is the last page view of a visit called the exit point. In addition to these basic metrics, there are several important calculated metrics. Some of the most common ones are average page depth, which is calculated by pageviews divided by sessions, average session duration, which is the sum of time on a page for every page view in the session. Site bounce rates, the percentage of all sessions that consists of only one pageview. And entrance and exit rates, which are the percentages of sessions that begin or end on a page. Since the specific calculation and usage of these metrics are beyond the scope of this class, I will not go through them in detail. However, you should take other courses in our digital marketing specialization to learn more about web analytics. To avoid analysis paralysis, a website owner not only needs to understand the various metrics provided by an analytics package, but he or she also needs to know which metrics are most important. The relative importance of available metrics depends primarily on a website's business model. Because retail websites and lead generation websites want their users to engage in different behaviors, you should be examining different metrics as signals of website performance. Every website manager needs to determine for itself which KPIs to use. But here's a list of some potential KPIs that any website should likely attend to, no matter the business model. For example, the goal of a retail website is to sell products. So, it's KPI's should reflect how successfully the website is attaining this goal. Since each visit to the website a is a potential sale, a retail website should always be looking to increase the number of sessions to its site. Additionally, for a retail site, increasing the percentage of visitors who complete a transaction is extremely beneficial. This type of conversion is another good indicator. Any sudden drop in conversion rate is always a sign of problems that should be addressed as quickly as possible. Examples of these problems may include: broken links, broken pages, a malfunctioning shopping cart, or payment system, product availability issues, or site speed issues, and so on. Other important KPIs for a retail website may include average order value and revenue per session.
