Marketing Metrics That Matter


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Marketing Metrics That Matter

  1. 1. Pardot Marketing Metrics That Matter Page 1 A Pardot White Paper MARKETING METRICS THAT MATTER Introduction Chapter 1 Email Marketing Renaissance Chapter 2 Social Media State of Affairs Chapter 3 Paid Search Landscape Chapter 4 (Re)emergence of Display Guide to Metrics that Matter Conclusion / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  2. 2. Pardot Marketing Metrics That Matter Page 2IntroductionVANITY METRICS VS. BETTER METRICSMarketers are under ever-increasing pressure to prove the value of their campaigns. With theemergence of new channels like social media, marketers often don’t know which metrics tofocus on and how to properly attribute results. This forces marketers to pursue metrics thatdon’t actually impact their bottom line, instead of the metrics that truly matter. These kindsof “vanity metrics” seem substantial at first glance, but upon deeper analysis, usually do notcorrelate with sales success.Today’s marketing analytics are powerful. Marketers now have access to all kinds of metrics,from page views and number of fans to more revealing statistics involving leads and sales. Withthe growing transparency in marketing data, it’s easy to get caught up in data that – more oftenthan not – is not actually impacting your revenue.It is important to distinguish between these two types of metrics. Vanity metrics can be usefulfor some purposes, including gauging brand awareness, optimizing marketing channels, andtracking marketing reach. Better metrics are more closely tied to your bottom line and ROI. Letstake a look at a few more differences: TIED TO PERFORMANCE TIED TO REVENUE Vanity metrics show you how a Better metrics show you exactly how marketing channel is performing, but your marketing is performing in relation not necessarily in terms of revenue. to your bottom line. EASY TO TRACK HARDER TO TRACK Vanity metrics are often the “out of Better metrics can be more difficult to the box” statistics available from most track, but provide far more insight than analytics platforms. vanity metrics. HELP WITH OPTIMIZATION HELP WITH SPEND EFFICIENCY Vanity metrics can help you increase Better metrics allow you to accurately your marketing reach, audience, and tie marketing activities to the revenue campaign impact. each channel generates.This white paper will explore the common vanity metrics for the major marketing channels aswell as some improved metrics that you should be tracking. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  3. 3. Pardot Marketing Metrics That Matter Page 3Chapter 1EMAIL MARKETING RENAISSANCEDespite all of the recent attention given to social media, email remains the workhorse ofmost online marketers. As one of the oldest online marketing tools, email has continued toevolve alongside the new technologies that surround it. Email marketers now have access tomore data than ever and are able to focus on relevancy, segmentation, and deliverability withsignificant accuracy.EMAIL MARKETING METRICSWith so much available data, many marketers lose sight of the metrics that matter most. Let’stake a look at the vanity metrics common to email marketing and the better metrics that cansupplement them.VANITY EMAIL METRICS Deliverability Rate: if your emails are not getting through to your prospects, this will be revealed in your deliverability rate. A high deliverability rate means your list is clean – or that you don’t have many bad email addresses on it. Open Rate: although open rate was once the only metric used to measure the success of an email marketing campaign, it is an unreliable and innacurate measurement for success. When emails are viewed in text only format, as they are on devices like Blackberries, opens are not recorded while false opens are often recorded in email clients with preview panels. Share Stats: forwards and recommendations are great talking points that let you know that you’ve created a compelling message. However, shares that don’t result in new sales or lead opportunities cannot be tied to ROI. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  4. 4. Pardot Marketing Metrics That Matter Page 4BETTER METRICSEmail’s vanity metrics are those that can’t be tied directly to ROI and sales numbers.Conversion-related metrics are those that are trackable, measurable, and where your attentionshould be focused. CTA Completion Rate: your form’s completion rate gives you insight into your campaign’s strengths and weaknesses. A low completion rate might mean your content isn’t persuasive enough, your list isn’t targeted properly, or even that your form is too long for prospects. The number of actual leads your campaign drives is a metric that truly matters. Acquisition Rate: the percentage of your leads that turn into actual sales is one of your most important metrics. Driving a high number of leads that aren’t sales- worthy might mean your lead quality is low, or that your marketing message isn’t fine-tuned enough to attract the type of leads that will convert for you. Site Conversion Rate: this refers to how many of your prospects close your email, but then return to your site at a future date and convert at that moment. A seemingly unsuccessful email campaign might actually drive leads post-email, so it’s important to have deep tracking in place. Fortunately, Pardot allows you to track all of your interactions with your prospects so you can see when they convert and how they interacted with your various marketing campaigns. CPA (Cost Per Acquisition): knowing the cost of acquiring a new customer is very useful. It lets you know how much you can afford to spend on your marketing and sales initiatives while still being able to reach your target ROI. Your CPA can be diluted by tactics that overlap, so it’s important to track and attribute properly so you can get a true CPA. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  5. 5. Pardot Marketing Metrics That Matter Page 5Chapter 2SOCIAL MEDIA STATE OF AFFAIRSSocial media is all the rage these days, and it’s easy to see why. Facebook, Twitter, LinkedIn,and YouTube provide access to audiences of millions, allow companies to form relationshipswith their customers, and produce customer insights in volumes that marketers would havenever thought possible. While nearly everyone agrees that social media is valuable, trackingand proving true ROI still remains a challenge.SOCIAL MEDIA METRICSSocial selling is a different user experience than other sales funnels, making it notoriously hardto track return on investment. Since social media first began to rise in popularity, the numberone complaint from skeptical business owners has been the questionable return on investment.This ambiguity in effectiveness is not a result of the social channel, but a result of tracking thewrong metrics. Below are a list of the common vanity metrics used to measure social media,as well as a list of better metrics that will provide more insight into the financial performance ofyour social marketing.VANITY METRICS Number of Posts: Many marketers make the incorrect assumption that more social posts means more exposure. The key isn’t to constantly spit out content and inundate your followers. You should be releasing useful content on a scheduled basis so that your followers feel like they’re getting something valuable from you. Re-tweets: Re-tweets do have a stronger tie to the amount of exposure your posts are receiving, but tell you little about their performance in terms of your marketing goals. Number of Friends/Followers/Subscribers: Think of quality over quantity. Huge numbers are largely unimportant if you aren’t being followed by key influencers in your space. Many of your folowers will never become leads or share your message with your target audience. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  6. 6. Pardot Marketing Metrics That Matter Page 6BETTER METRICS Number of High Quality Leads: While social media is great for engagement, the metrics that matter are the ones that measure the number of leads you are generating. Tying your social media campaigns to the leads they generate will give you and accurate look at how your campaign is performing. Lead Conversion to Sales: a number just as important as the number of leads your social media campaigns are generating is the percent of those leads that become customers and drive revenue. Purchasing Behaviors: do your Facebook fans purchase your products more frequently? Do they upgrade, subscribe for longer periods, spend more time on your website? These are all telling signs that your social media campaigns are giving you results. Referrals: are your social media campaigns sending new business your way? Ideally, your social media fans would be driving additional leads and sales for your company and serving as your brand evangelists. TIPS FOR TRACKING SOCIAL Custom Redirects: Impressions are often tracked by brands that can afford to spend millions on paid search. They refer to the . Promoted Tweets: Promoted tweets not only put your message in front of more people, but also allows you to track exposure and engagement. Closed-Loop Reporting: Closed-loop reporting services allow you to tie each sale to their original point of entry, which may have been a social post. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  7. 7. Pardot Marketing Metrics That Matter Page 7Chapter 3PAID SEARCH LANDSCAPEPaid search campaigns have experienced many advancements in tracking. They are extremelyversatile and can be used to run both branding and cost-per-acquisition campaigns. Theflexibility of the major paid search engine platforms means you can optimize underperformingcampaigns almost instantly in order to improve your ROI.PAID SEARCH METRICSA lot has been written about paid search metrics and how measurable they are. Dependingon the type of campaign, you may want to weigh different factors more heavily. For most smalland medium sized businesses SMBs), increasing awareness is not the primary goal of a paidsearch campaign because it’s inefficient for their revenue goals. Most SMBs use paid search todrive leads and sales.VANITY METRICS IMP (Impressions): Impressions are often tracked by brands that can afford to spend millions on paid search. They refer to the total number of people that are exposed to your ads. Impressions can’t be directly tied to leads and sales. POS (Position): Advertising agencies love to tout the position of your paid search ad as a success metric. A top 3 position is usually exponentially more expensive than a position in the 4-6 spot, and often generates a lot of unqualified clicks. A slightly lower position is more economical. Clicks: clicks speak to your ad’s position and its relevancy. If more people are clicking on your ad, that usually means your ad is positioned well and is resonating with viewers. However, if the people clicking on your ad are not your target customers and are just unqualified traffic, then you are simply wasting marketing dollars. CPC (Cost Per Click): your cost per click is important to be mindful of, but it should not be a defining metric for your paid search campaigns. For SMBs, especially B2Bs with long sales cycles and a high cost per lead, a high CPC is almost expected. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  8. 8. Pardot Marketing Metrics That Matter Page 8BETTER METRICS Leads: you should be focusing on the number and quality of leads generated by your paid search campaigns. If your paid search budgets are tapped out, focus on trimming the fat and optimizing your paid search campaigns. Get rid of keywords that don’t result in leads, and tweak your landing pages and ad copy to focus on what you want. One great way to prevent unqualified clicks is by including a price point in your paid search ad. CPL (Cost Per Lead): your cost per lead is a telling metric. Once you develop your own target CPL, you can map your paid search campaigns to that goal and optimize based on that larger metric. You’ll save precious bandwidth by focusing on your larger, overriding CPL goals and not on smaller, micro-goals like your CPC. CPA (Cost Per Acquisition): your cost per acquisition tells you how much it actually costs to acquire a new customer. It may only cost you $10 to generate a paid search lead, but once you pass those leads on to your sales team and have them dedicate their resources to closing a deal, it may cost you over $500 to acquire a new customer. With your CPA metric, you can back out all of your other success metrics to determine what they should be and optimize your entire paid search efforts around that goal. TIPS FOR PREVENTING UNQUALIFIED CLICKS A/B Test: The surest way to prevent unqualified clicks is to test different layouts, copy, and offers to determine which elements perform best. Include Price Points: Including price points in your ad will help deter clicks from viewers who may not be interested in purchasing. Tweak Keywords: Certain keywords are more likely to attract unqualified buyers. Continually assess keyword effectiveness to cut down on unqualified clicks. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  9. 9. Pardot Marketing Metrics That Matter Page 9Chapter 4(RE)EMERGENCE OF DISPLAYOver the last few years, the display advertising landscape has been revitalized, largely due tochanges in the competitive landscape, better bid models, and improved targeting capabilities.Of course, on the heels of this improved technology came the advent of smarter analytics (andmarketers!) that helped shift the display landscape to one of proper attribution.DISPLAY METRICSHistorically, display had been used as a branding and awareness tool, largely supported byagencies and companies with large marketing budgets. The emergence of retargeting and theability to measure metrics more applicable to SMBs has made it possible to track more usefulmetrics that can be accurately tied to ROI. Below is a list of traditional vanity metrics for displayadvertising and some better metrics that can now be tracked through analytics.VANITY METRICS IMP (Impressions): the high volume of impressions and the resulting brand recognition were the biggest selling points for the traditional display model. As we now know, however, display ads didn’t drive response the way other more effective online tactics did. Impressions are irrelevant if the traffic is unqualified and doesn’t eventually result in leads or sales. CTR (Click Through Rate): although clicks are desirable, accidental clicks and high bounce rates make click through rates unreliable metrics for tracking the success of an ad. CPM (Cost Per Mille): the old pricing model for display ads was simply a cost for 1,000 impressions, or a CPM. In the past, this was the only pricing model that publishers were willing to entertain, because they knew they would never be able to justify a CPC or CPL model because the numbers would never back out from an ROI perspective. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  10. 10. Pardot Marketing Metrics That Matter Page 10BETTER METRICS CTL (Click to Lead): instead of focusing on a CPC metric, marketers should focus on the number of people clicking on an ad that eventually become leads. That allows for better ad targeting and optimization, and better end results. After all, shouldn’t we be more interested in bottom line numbers like leads and sales? CPL (Cost Per Lead): fortunately, there are pricing models now that focus on CPC or an estimated CPL, helping marketers justify display campaigns and properly attribute and track results. CPA (Cost Per Acquisition): like any marketer driven by CPA goals, you should also focus on CPA numbers for your display campaigns. While branding exercises are cool, if they aren’t resulting in reportable success metrics, they shouldn’t be your focus. TIPS FOR SUCCESSFUL ADS Clear Call-to-Action: Making your call to action clear and concise will help viewers to better understand what you would like them to do. Simple Design: The simplier your design, the easier it is for viewers to understand what you are asking for and what you are offering. Value Proposition: Offering something of value in your ad, whether that is a white paper or special promotion, will help motivate viewers to take action and click on your ad. / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  11. 11. MARKETING METRICS THAT MATTER Marketers have access to more metrics than ever before. That’s why it is more important than ever to track the metrics that matter most. = Vanity Metric = Better Metric Bounce Sharing Open Deliverability Rate Stats Rate Rate EMAIL METRICS + Site Acquisition Conversion Cost Per Form Rate Rate Acquisition Conversions 4 Re-tweets/ Friends/ Number of Shares Followers Posts SOCIAL METRICS 4 Number Closed Purchasing Deals Referrals of Leads Behavior Click Impressions Ad Through Cost Per Position ClickPAID SEARCH Rate METRICS 4 Number Cost Per $ Cost Per of Leads Lead Acquisition Click $ Cost Per Impressions Through Impression Rate DISPLAY METRICS Click To Cost Per Cost Per $ Lead Lead Acquisition TM / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation
  12. 12. Pardot Marketing Metrics That Matter Page 12Chapter 5CONCLUSIONIt’s easy to get lost in the hype surrounding vanity metrics. After all, they often make you lookgood! Information about tactics like social media and wide-reaching branding metrics can giveus interesting data points about our target customer, our brand evangelists, and the overallbreadth of our company.However, these numbers don’t tell the entire story, and in fact, can vcause us to lose focus onthe metrics that truly matter – the ones impacting our company’s bottom line. So rememberyour vanity metrics, but manage your campaigns using better metrics – the ones that matter.PARDOT IS A MARKETINGAUTOMATION COMPANY.Founded in 2007, we are located inAtlanta, GA and focus on providinghassle free automation solutions forsmall to medium sized business in theB2B space.CONNECT WITH USPardot’s WebsitePardot’s Twitter404.492.6845 / 404.492.6845 / ©2012 Pardot, LLC / All rights reserved worldwide marketing automation