Marketers typically measure the performance of campaigns and channels. For email, the key metrics could be opens, clicks, unsubscribes, and sales. For pay-per-click ads, it could be cost per click and cost per conversion.
But how do you measure your marketing performance overall? And how do you compare channels, such as email marketing to PPC ads to social media?
One way is to create a sophisticated attribution model that allocates each sale among the various marketing channels that the customer touched en route to a purchase. That is the most accurate method. However, not all businesses have the staff or the technology. Also, it is impossible to know, for example, if someone saw a photo of your product on Pinterest and later received an email from your company with the same product.
The other way is to combine key metrics from each source in a dashboard or spreadsheet and review high-level results, usually monthly. What follows are key metrics for each channel to create that analysis.
- List size. Total unique emails sent is equivalent to total impressions. Comparing months would indicate if your prospects are increasing or declining.
- Open rate is the number of opened emails divided by the number delivered. This shows how engaged your customers and prospects are.
- Sales. What was the sales volume during the month from marketing emails? Sales volume is the most important metric for all channels.
- Total spend. How much did you spend on advertising, such as AdWords and Facebook ads?
- Total clicks. How many people visited your website from clicking your ads?
- Sales. How many sales transactions from advertising did you generate and what was the average amount?
- Number of followers. Tracking the number of followers on each social channel gives you an idea if you are becoming more or less popular.
- Likes and shares. Likes and shares are an indicator of how engaged your users are.
- Sales. How many sales transactions from social media did you generate and what was the average amount?
- Site visits. How many people visited the site directly (excluding those that came from email, social media, and advertising) provides a metric to track branding and search engine optimization efforts.
- Time on site or number of pages viewed can be a helpful metric to monitor engagement.
- Sales. How many sales transactions from organic traffic did you generate and what was the average amount?
Changes by Month
Email marketing, advertising, social media, and organic traffic are examples of marketing channels. Your company’s situation could be different. Regardless, you can now put all metrics together, as follows
Calculate monthly changes for each metric. Here is a simple version.
|Last Month||This Month||% Change|
|Email List Size||1,000||1,200||20%|
In this example, your email subscribers are growing. But the number of visits from organic traffic declined by 2.5 percent, which merits investigating.
Engagement by Source
You can also analyze engagement by marketing source. For email marketing, that would be the open rate. For advertising, it is the click rate. It would be likes and shares for social media and time on site for organic traffic. Here is a simple monthly comparison table.
|Last Month||This Month||% Change|
|Email Open Rate||10%||11%||10%|
|Advertising Click Rate||5%||4.5%||-10%|
|% Likes and Shares vs. Total Followers||1%||2%||100%|
|Number of Pages Visited||5.50||5.60||1.8%|
Monthly engagement increased for all sources except advertising. It declined by 10 percent. Thus, a review of advertising efforts, such as ad copy, is likely necessary.
Next, analyze sales per source. Keep in mind that a source may produce few sales but high engagement, contributing to the overall customer purchase journey.
In this example, you can see the number of transactions and revenue by source, with monthly changes
|Number of Sales||Revenue|
|Last Month||This Month||% Change||Last Month||This Month||% Change|
|Email Marketing Sales||19||28||47%||$1,500||$1,800||20%|
|Social Media Sales||6||4||-33%||$35||$56||60%|
|Organic Traffic Sales||20||22||10%||$3,000||$2,600||-13%|
Return on Investment
Finally, with all the data in one place, you can calculate overall return on investment. It’s an imperfect calculation, however. Not every sales transaction can be attributed to a single marketing source. Still, tracking the revenue per source is an acceptable approximation. To calculate ROI:
(Revenue – Marketing Spend)/Marketing Spend.
This will roughly indicate the profitability of each source. Combining revenue and marketing spend from all sources will generate an overall ROI.