What are key performance indicators (KPIs)?
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Key Performance Indicators (KPIs)

What are KPIs? KPIs are a set of specific metrics designed to tell how effectively a company is meeting its marketing objectives. Common KPIs used to determine whether a campaign or marketing effort’s objectives are being met include Click-Through Rate (CTR), Conversion Rate, Cost per Click (CPC), Cost per Acquisition (CPA), Return on Ad Spend (ROAS), and Customer Lifetime Value (CLTV or LTV).

How do KPIs work? KPIs work by providing marketers with a way to track their progress towards their marketing goals. By monitoring KPIs over time, marketers can identify trends and areas where improvement is needed.

For example, if a performance marketer sees that their CTR for a paid search campaign is declining, they can make adjustments to their campaign, such as changing their ad copy or targeting different keywords.

Types of KPIs:

  • Reach: The number of people who see a marketing message.
  • Engagement: The number of people who interact with a marketing message, such as by liking, commenting, or sharing it.
  • Traffic: The number of people who visit a website or landing page.
  • Leads: The number of people who express an interest in a product or service, such as by signing up for a newsletter or downloading a whitepaper.
  • Sales: The number of products or services sold.

How to measure KPIs:

KPIs aren’t universal metrics like CPMs or pageviews. Since they’re set internally by a marketer, they require custom measurements that reflect the unique guideposts for success an entity has established. 

Why are KPIs important to marketers?

By providing a way to measure the effectiveness of marketing campaigns and identifying areas where improvement is needed, without KPIs, marketers would be lost. By tracking KPIs over time, marketers can ensure that their marketing efforts are aligned with their business goals and that they are getting the most out of their budget.

Who needs to know what KPIs are:

  • Performance marketer
  • Digital marketer
  • Marketing manager
  • Brand manager
  • Product manager
  • CEO

Use KPIs in a sentence: “We need to reevaluate our KPIs in light of changing search trends — instead of focusing on clicks, we need to measure loyalty and and engagement to see if we’re resonating with our key customers.”