KPI, ROI . . . Oh My!

5/30/2017

- Danielle Leitch, Executive Vice President

So often in conversations with marketers these two acronyms are discussed: KPI and ROI. Each are very important and together combined are very insightful. Yet, if advertisers don't properly set expectations in advance for each, incorrect analysis and poor decisions are made.

Key Performance Indicators (KPIs) should be established in advance of each marketing campaign or effort. It's critical to determine what the expected outcome should be for every tactic or channel, in advance of their launch. Even more important, is to establish appropriate KPIs based on what the marketing campaign is meant to do. Driving leads or sales? Great … the obvious goal should be measured as your primary goal. Encouraging a prospective customer to learn more and read or watch your content? Measuring the primary goal (leads/sales/booking) should likely not be your main KPI to measure success of that advertising effort. It will appear it isn't working and display poor ROI. Redefine the main goal for that effort exclusively, to align with what action you are seeking the user to take. Of course, your secondary KPIs can then be the main goal, as we always hope for that, but cannot reasonably expect it, especially for top-of-funnel activities.

The following visual should give you an idea of alternative KPIs to measure for upper-funnel, or even mid-funnel, marketing efforts:

Conversion Types Funnel

Not all ad formats trigger equal kinds of actions – therefore they can't all be measured the same. Define fair KPIs first (what action should the visitor take given the channel, messaging and landing page?), then set up reporting to follow, so proper ROI analysis can be performed and true success (or failure) can be established.

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