If you have a personal brand or own a business, it is important that you master the metrics or indicators of digital advertising to determine the effectiveness of digital campaigns and the marketing team.

However, before you learn what the main metrics are and how they are calculated, you must understand these basic concepts that I explain below:

• Impressions: Refers to the number of times an ad has been viewed.
• Clicks: The number of times people click on your ad.
• Investment: The amount paid to carry out the campaign.
• Conversion or Lead: Achieving a goal that allows your prospect or customer to progress in the path of effective sales or content consumption. Registering on your website, following your social media, reading your blog content are some types of conversions. 

Before starting a digital marketing campaign, it is necessary to define relevant KPIs to measure the progress of your advertising actions. Key Performance Indicators (KPIs) are all the variables and mathematical ratios that provide an insight into the performance of your campaign over time. Here are the 10 most relevant ones in any digital marketing campaign:

The 10 Most Important Indicators in Digital Marketing

1. CPC: Cost Per Click
2. CPT: Cost Per Thousand Impressions
3. CTR: Click-Through Rate
4. CPA: Cost Per Acquisition
5. CPV: Cost Per View
6. Conversion Rate
7. ROAS: Return on Advertising Spend
8. ROI: Return on Investment
9. Percentage of Customers Generated by Marketing
10. Percentage of Customers Influenced by Marketing

1. CPC or Cost Per Click

It is the cost of each click made by people who view your digital campaign. This means that even if an ad has millions of impressions, you only pay each time someone clicks on it. 

It is calculated by dividing the total investment by the number of clicks obtained. 

2. CPT or Cost Per Thousand Impressions

Refers to the cost of every thousand impressions or views an ad receives on a digital platform. In this model, you pay each time your ad is viewed, and it is calculated by dividing the investment amount by the number of impressions multiplied by 1000.

3. CTR or Click-Through Rate

It is an indicator that reflects the interest shown by people in your ads or content on digital platforms. It is calculated by dividing the number of clicks obtained by the total number of impressions.

The average CTR varies depending on the industry. However, in general terms, it can range from around 1% in advertising campaigns, and a 10% CTR is considered high.

4. CPA or Cost Per Acquisition

This is one of the most important metrics as it determines how much each conversion obtained from the campaign cost you. It is calculated by dividing the investment amount by the number of conversions or actions performed by the prospect or customer.

5. CPV or Cost Per View

This metric is commonly used in video content consumption and defines how much each view costs. It is calculated by dividing the total investment by the number of views.

6. Conversion Rate

Defines to what extent the objective of the digital advertising campaign was achieved. It is obtained by dividing the number of conversions by the number of clicks, multiplied by 100.

An ad alone will not lead to conversion; its role is to redirect traffic to a website, landing page, or any other medium where the conversion can take place. Hence, it is necessary to use the number of clicks as a basis for the number of visits.

7. ROAS or Return on Advertising Spend

Allows you to know the monetary effectiveness of promoting a campaign within the sales channel or social network. It relates the investment made in paid links to the sales generated by them. It also helps you define budgets for future campaigns and the most effective strategies.

It is calculated by dividing the total sales by the investment, multiplied by 100.

Let's look at an example: If you invest $1000 in Facebook Ads to promote a campaign and generate sales of 20 products with a total value of $4000, the formula would be as follows:

ROAS = $4000 / $1000 x 100 = 400%

A value of 100% means that you have recovered the investment. Values below 100% indicate a loss, while values above 100% indicate how many times the investment has been exceeded. In the previous example, it means that for every dollar invested in Facebook Ads, $4 in sales were generated.

8. ROI or Return on Investment

Differs from ROAS because this investment should be calculated based on the total advertising costs incurred to sell your company's goods or services.

If we consider the example mentioned in ROAS, we understand that in addition to using promotion on Facebook Ads, there are other costs involved, such as the designer or digital agency that created the advertising materials or manages the campaign, and the costs of delivering the goods.

Although ROI and ROAS are financial indicators, it is understood that for the analysis of the digital strategy and its advertising campaigns, only the costs involved in marketing are considered.

ROI is calculated by subtracting the total sales minus the campaign investment, divided by the total investment, all multiplied by 100.

Continuing with the example of ROAS, you would also need to consider the additional costs related to the campaign. For example, you have hired a digital agency with a cost of $500, and you need to ship the 20 products sold, which incurs a total cost of $100. Thus, the formula for ROI would be expressed as follows:

ROI: ($4000 - $1600) / $1600 x 100 = 150%

9. Percentage of Customers Generated by Marketing

Determines the percentage of customers generated by the campaigns carried out by your business or brand. It demonstrates the effectiveness of the marketing team.

It is obtained by multiplying the total number of new customers by 100, divided by the total number of new customers generated by a marketing campaign.

10. Percentage of Customers Influenced by Marketing

Measures the impact of campaigns in generating new leads or prospects, i.e., people entering your business's sales funnel. It is calculated by dividing the total number of new customers by the total number of leads generated by the campaign, multiplied by 100.

Conclusion

As coined by William Thomson Kelvin: 'What gets measured gets improved,' and this truth applies to digital marketing as well. All actions taken in a digital advertising campaign must be measured to identify which ones are yielding results and to make necessary course corrections in order to achieve the best outcomes.

• CPC = Investment / Clicks
• CPT = Investment / Impressions x 1000
• CTR = Clicks / Impressions
• CPA = Investment / Conversions
• CPV = Investment / Views
• Porcentaje de Conversión = Conversions / Clicks x 100
• ROAS = Sales / Investment x 100
• ROI = ( (Sales - Total Business Investment) / Total Business Investment) x 100
• Percentage of Customers Generated by Marketing = (New customers x 100) / New customers generated by the campaign.
• Percentage of Customers Influenced by Marketing = (New customers / Leads) x 100

If you need support with your digital marketing campaign, we are here to assist you. At Websesor, we have been providing our digital agency services since 2011. If you'd. like to learn more about our work, we invite you to review the testimonials of some of our clients on the following link About Us.