1. KPIs and metrics
Let's continue from campaign analytics to one of the most important focus areas for a Marketing Analyst. To measure ROI effectively, we need to select appropriate KPIs and metrics.
2. KPIs versus supporting metrics
Previously we mentioned KPIs and metrics, but what do those terms mean? KPIs, or Key Performance Indicators, are metrics that show if marketing efforts impact the overall business.
Usually, we select one or two metrics to understand business impact, and ideally, growth.
KPIs vary based on the campaign goal, and should tie to business health.
Supporting metrics are the measures we monitor to ensure channels are healthy and performing optimally.
We can select several metrics that relate more to marketing engagement (only apply to ads) than business impact (can apply to more than marketing). Supporting metrics usually measure the immediate impact of channel and tactic optimizations. We can narrow down options for supporting metrics by leveraging marketing funnels.
3. Marketing funnel
Marketers want to acquire prospective customers during a purchasing journey or funnel. Funnels start with a wide audience of prospects and end with a smaller audience of purchasers.
4. Marketing funnel: awareness
The top of the funnel is called "awareness", in which brands use marketing to educate the customer about brand names and messages.
Awareness campaigns leverage channels that reach a wide audience, like TV.
5. Marketing funnel: consideration
Next, the middle part of the funnel is called the "consideration" stage.
This stage is where prospective customers are researching a brand and comparing it to other brands before purchasing.
6. Marketing funnel: decision
At the bottom of the funnel, customers reach the "decision" stage, and purchase.
Channels like paid search are higher volume in this stage since they can connect customers directly to purchase.
7. Campaign funnel goals
Campaigns have different goals depending on the funnel stages. These goals have implications for campaign success.
Awareness campaigns want to improve awareness or brand perception, but how can we measure that change? For the most part, these campaigns rely on surveys to confirm a meaningful change.
With consideration campaigns, marketers want to understand how they increased research into brand offerings. However, it is difficult to know how much our brand is being considered compared to competitors.
Decision campaigns are an exception, where measuring revenue impact is relatively easy. Because of these measurement differences by funnel stage, we have to be thoughtful in selecting KPIs.
8. Campaign goal KPIs
For upper funnel campaigns, another common KPI to track awareness (besides surveys) is audience "reach." Because awareness campaigns use offline channels like TV and billboards, we use number of impressions as a proxy for audience reach.
Consideration campaigns use various KPIs to represent research activities. When people visit brand websites or engage with social media, that is considered a form of research.
In lower funnel campaigns, we directly associate conversions and revenue (via average order value). Keep these KPIs in mind as we compare to supporting metrics.
9. Campaign supporting metrics
At times it is challenging to determine if a metric is a KPI or a supporting metric.
Questions to guide us are "Can this metric improve via small changes in spend?" or "Will business growth be indirectly affected by this metric?" If the answer is yes to both questions, that is a sign of a supporting metric.
Some supporting metrics for awareness are: cost per 1000 impressions (often called cost per mille, or CPM) and Branded paid search volume.
Consideration campaigns mainly utilize engagement metrics such as Instagram likes, and cost per 1000 impressions for display ads.
Decision channels monitor supporting metrics like clickthrough rate or cost per click. Marketing Analysts can combine funnel stages and campaign goals to select appropriate KPIs and supporting metrics for any scenario!
10. Let's practice!
Time to review what we just learned about marketing funnel stages!