The 7 most important marketing metrics

In marketing, measuring campaign success and effectiveness is a key step to achieve higher ROI and better budget optimization. There are many metrics out there that provide valuable insights into campaign performance. In this article, we'll focus on the most core and important metrics that you should undoubtedly track if you want to achieve maximum success.

Cost Per Click (CPC)

Cost Per Click (CPC) indicates the amount you pay each time a user clicks on your ad in Google Shopping. CPC is important for evaluating the effectiveness of paid campaigns.

CPC = (Total Ad Cost / Number of Clicks)

This amount is determined by your highest bid and by comparing your ad to other competitors. At the same time, a low CPC means the campaign is cost-effective, while a high CPC may signal the need for ad optimization.

Click-through rate (CTR)

Click-Through Rate (CTR) is a metric that indicates what percentage of people who saw your ad actually clicked on it. CTR helps determine the relevance and appeal of your ads.

CTR = (Number of clicks / Number of impressions) * 100

A high CTR indicates that your ad is attractive to your target audience. Conversely, a low CTR may indicate that you need to adjust your text, be creative or use more keywords.

Cost per Acquisition (CPA)

Cost Per Acquisition (CPA) measures how much you had to pay for each action you requested on your website, such as buying a product, registering or downloading an app. CPA includes all costs for a given campaign and is key to assessing ROI.

CPA = (Total cost of advertising / Number of conversions)

By optimizing your campaigns while lowering your CPA, you can rapidly increase the profitability of your marketing efforts.

Cost per thousand impressions (CPM)

Cost Per Thousand Impressions (CPM) measures how much your ad costs per thousand impressions. This metric is common in brand campaigns and for ads that are aimed at increasing brand awareness.

CPM = (Total Ad Cost / Number of Impressions) * 1000

The CPM value allows you to compare the cost of advertising on different websites and use this information to decide where to place your ad. It also helps you evaluate how effectively your ad is reaching a wide audience.

Conversion Rate (CR)

Conversion Rate (CR) is a metric that indicates the percentage of visitors who made a desired conversion such as purchase, registration and form fill. This metric is crucial for measuring the effectiveness of websites and advertising campaigns.

CR = (Number of conversions / Number of visitors) * 100

If conversion rates improve, it can significantly increase the overall performance of your marketing without having to increase your budget.

Cost to Sales Ratio (CTR)

PNO (Cost to Sales Ratio) measures what percentage of total sales a business spends on marketing activities. In other words, it shows how much of every penny a business earns is invested in advertising or marketing activities.

PNO = (Advertising costs / Turnover) * 100

Every online store is different and the PNO value shows different conclusions for each. For some online stores 20% PNO is a high value, some online stores are happy for this value. The common goal of all is to have maximum turnover at a PNO at which I will not lose.

Return on advertising investment (ROAS)

ROAS (Return on Ad Spend) represents how much money you make for every penny you invest in advertising. In other words, how much we make per penny invested in advertising.

ROAS = (Total Revenue / Ad Spend) * 100

The higher the ROAS, the better the return on your advertising investment.

ROAS is one of the most important metrics for evaluating the performance of advertising campaigns.

Our tip: Don't just focus on one metric. It's important to look at metrics in context to optimize your campaigns. For example, combining CPC, CTR and ROAS will give you a comprehensive view of how effective your campaigns are in terms of cost and revenue generated.

Conclusion

Constantly monitoring and correctly interpreting your marketing metrics will allow you to more accurately optimize your campaigns, increase ROI, and manage your budget effectively. Regular analysis of these metrics is essential for long-term success in digital marketing.