Measuring the performance of marketing activities has always been a core component of a successful marketing strategy.
This is exactly where KPIs (Key Performance Indicators) come into play.
Performance indicators (KPIs) act as a compass, helping a company determine whether it is allocating resources in the right direction and whether it is on the right track toward achieving its strategic objectives.
Proper understanding and categorization of KPIs by channel is fundamental to successfully tracking the performance of Digital Marketing strategies. Since digital marketing spans many channels such as email marketing, social media, SEM (Search Engine Marketing), and others, each one requires specific indicators tailored to the characteristics of the medium.
Their classification and description, however, can be a complex process due to the wide variety in what we want to evaluate and how we choose to measure it.
The first step in defining KPIs is to categorize them.
1. Primary Categorization by Type
There are two main types of KPIs:
- Strategic KPIs
- Operational KPIs
This classification refers both to the time horizon over which we analyze or study a KPI for optimization purposes and to the organizational level (e.g., management team) that views and manages them.
Strategic KPIs are long-term indicators that are more closely aligned with the company’s strategy and goals. These are generally monitored by senior executives.
Operational KPIs, on the other hand, refer to short-term goals related to day-to-day or weekly activities and are mainly relevant to mid-level or junior teams.
For instance, ROAS (Return on Ad Spend) could be a strategic KPI, while CTR (Click-Through Rate) might be considered operational.
2. Categorization by Media Type
Another way to classify KPIs is based on the type of media a company uses to reach its audience.
In the digital space, media can be grouped into:
- Paid Media
- Owned Media
- Earned Media
- Shared Media
Paid Media refers to media used for paid advertising, such as paid promotion on social platforms, Google campaigns, etc.
Owned Media includes assets owned and managed by the company itself, such as its website, blog, or YouTube channel. These are important brand-owned resources.
Earned Media consists of free exposure that a business receives from third parties, such as user-generated content on social media, brand mentions, online reviews, and backlinks.
Shared Media involves visibility gained from user interactions with brand-generated content, such as post shares, comments, or retweets.
The difference between earned and shared media is control: in earned media, the company has no influence over the content or channel (e.g., an unsolicited review or an external backlink), while in shared media, the brand has control over the original content (e.g., a Facebook post shared by users).
3. Categorization by Channel
Digital marketing operates across multiple digital communication channels like Email Marketing, Social Media Marketing, and SEM. Each channel has distinct KPIs that track and evaluate its specific performance.
Naturally, each channel’s activities require different evaluation criteria that focus on the metrics most relevant to that specific channel. For example, in email marketing, we care about tracking the number of recipients who opened an email (Open Rate), but that’s not a KPI we’d apply to a social media campaign.
The most common KPI categories are:
- SEM KPIs
- Social Media KPIs
- Email Marketing KPIs
- SEO KPIs
- Affiliate Marketing KPIs
- Content Marketing KPIs
Now that we understand KPIs vary depending on the channel, the goals, and the medium being used, in the next article we’ll explore the criteria for choosing the right KPIs and which ones are most important in digital marketing.