Performance Marketing

How to Set KPIs for Digital Marketing

In the digital marketing landscape, measuring success goes beyond simple metrics. This blog post dives into how to set meaningful Key Performance Indicators (KPIs) for Saudi Arabian brands, emphasizing the need to look past vanity metrics and understand the bigger picture.
Published on
July 23, 2024

Compared to traditional media (e.g., OOH, radio), digital marketing provides a plethora of metrics to measure performance with high accuracy. Marketers can track and analyze engagement, taking proactive actions during campaigns in ways not possible with offline media. For example, they can track whether a paid search ad was clicked, along with metrics like Cost Per Click (CPC), Return on Ad Spend (ROAS), total conversions, and more. Analytics can identify which content or product generates the most interest through page views, time spent on each page, and other indicators.

This article explores how to set relevant and informative digital marketing KPIs for Saudi Arabian brands, enabling marketers to think critically and ask better questions.

Challenges with Digital Marketing Metrics and KPIs

Not all metrics are equally useful. Ranking at the top of a SERP (Search Engine Results Page) for a keyword is not beneficial if only about 3% of organic users from retail sites convert, or if most visitors leave the site quickly. Ranking first for high-volume search terms that do not convert can be considered a vanity metric, serving only to reaffirm the current bias of senior management.

Some metrics tell an interesting story on their own but reveal a different picture when paired with others. For example, generating hundreds of likes from a TikTok post might be great for social media engagement, but if users are directed to a website with poor user experience, most will leave immediately.

Understanding KPIs Beyond Financial Returns

KPI stands for Key Performance Indicator and helps us understand the effectiveness of digital marketing activities. When significant time and money are invested in campaigns, senior marketers must measure the costs involved (e.g., ad spend) against whether activities generated tangible financial returns (e.g., Revenue, ROI, ROAS, Profit Margins).

However, effectiveness should not be determined by financial metrics alone. A social campaign might only achieve moderate direct conversions, but organic engagement could have been massive and sustained. Through this lens, the campaign was effective in a different way.

The value and relevance of certain KPIs will differ among teams. A B2B media team may identify total inquiry submissions as a critical KPI, while sales teams prioritize SQLs or High Intent Sales Ops (HISO).

Setting SMART KPIs for Digital Marketing Projects

One effective framework for goal setting is the SMART approach, which is also useful for setting KPIs:

  • S – Specific: Ensure the metric is not vague and tied to a specific strategic outcome.
  • M – Measurable: The observed activity must be measurable, with metrics available from the tools/platforms in use.
  • A – Attainable: The KPI must be achievable. If not, it’s pointless to have it.
  • R – Relevant: The KPI must be relevant to the respective teams and connected to overarching business goals.
  • T – Time-bound: Define if it is a monthly, weekly, or yearly KPI. Are there due dates to account for?

Monitoring changes consistently and setting up comparisons against previous time periods is crucial. Unify KPIs to ensure online digital marketing metrics flow through to offline outcomes, generating a full view of end-to-end performance.

Advanced KPI Setting

At Calibrate Commerce, we use additional dimensions to inform the KPI planning process, splitting KPIs into two categories:

  • Sustaining: Metrics of your current state, affecting immediate performance. These are based on established business capabilities, like CPC, ROAS, CTR, impressions, and other standard measurements.
  • Disruptive: KPIs relating to a desired future state, which may be unclear at the outset and form over time through experimentation and innovation. These could cover metrics like the accuracy of customer churn models or the increase in basket value from recommendation engines.

Achieving Strategic Outcomes with Digital Marketing KPIs

Strategic outcomes aren’t always financially based, so not all KPIs need to be revenue-related. Focus on short-term KPIs that rely on current sustaining capabilities while also looking to the future and desired customers. This approach helps design processes and strategies hyper-relevant to overarching business goals.

Setting Effective Digital Marketing KPIs for Brands in the GCC

At Calibrate Commerce, we help brands develop KPIs that drive results and growth. We guide senior leaders to collect the right data, powering excellent decision-making and future-proofing businesses in an unpredictable economic environment.