How to Prioritize Performance Metrics as a Small Business Owner or Marketer

As your business plans and launches digital advertising and marketing campaigns, performance analytics play an essential role in understanding the value you’re driving from your investment. Even the basic analytics offered in Google Ads and other advertising platforms can give small businesses a basic idea of whether their campaigns are driving engagement from their audience.

When it comes to evaluating campaign performance, any information is good information. But how you interpret that information can also affect the value of those insights—particularly when it comes to optimizing your digital strategy to drive better results.

Referrals, conversions and revenue generation are all easily quantified through performance analytics. Other desired outcomes, though—such as building brand awareness and increasing positive brand sentiment—can be more difficult to evaluate.

The quality of your analytics and performance data has a direct impact on your long-term value creation through digital marketing and advertising. The better your data-driven insights, the faster and more effectively you can optimize your campaigns to push ROI higher. Here’s a look at the top performance metrics trusted by fellow small business owners and CMOs—as well as tips to gain a competitive edge in this information race.

6 Performance Metrics Trusted By Small Business Leaders

Certain metrics are valued for the simplicity and clarity they can offer in evaluating campaign performance. For many small business leaders, advertising and marketing performance is judged first by the following metrics:

1. Click-Through Rate (CTR). This percentage refers to the number of clicks an ad receives compared to the total number of ad views. A high click-through rate suggests that your ad is interesting to your audience and is motivating them to click to learn more.
2. Conversion Rate. A conversion can be defined as a sale, a filled form, or another action taken after clicking on an ad. A high conversion rate means that your ad traffic is filled with high-quality prospects.
3. Total Impressions. The total number of impressions an ad receives is the number of times it has been viewed by a consumer. Impressions do not represent any type of action, such as clicking on the ad, but this metric can help evaluate your ability to build brand awareness among your audience.
4. Cost-per-Click (CPC) and Cost-per-Impression (CPI). These metrics divide the total number of impressions and clicks, respectively, by the cost of those campaigns. CPC and CPI are basic metrics to help you evaluate campaign ROI.
5. Return on Ad Spend. This metric reflects the total revenue generated by a single ad or larger campaign after subtracting the ad expenditures. Since campaigns often drive revenue in indirect and untrackable methods—such as future sales resulting from increased brand awareness over time—this metric can be difficult to accurately quantify, and is best calculated by an expert.
6. Customer Acquisition Cost (CAC). CAC is calculated by dividing your total ad spending by the number of new customers acquired. CAC can be useful in planning ad campaigns when attempting to project the revenue impact of an ad campaign—particularly if you have quantified the average lifetime value of a customer.

How Performance Metrics Can Help You Improve Your Advertising Strategy

Great marketing and advertising campaigns are a product of continued testing and refinement. Performance metrics are the engine that drives these optimizations, offering insights your business can use to improve ad design, messaging, targeting, and other elements in pursuit of better campaign ROI.

Without these metrics, your marketing and advertising is flying blind, forcing your business to trust anecdotal observations and the intuition of whoever’s running your campaigns. This is a recipe for wasted ad spending, poor returns, and stagnating business growth. Even when initial campaign performance disappointments, these metrics can offer a path to improvement that can ultimately grow your customer base, your revenue, and your brand’s influence in your local market.

Before Making Changes, Make Sure You Understand the ‘Full Picture’

Performance metrics play a critical role in evaluating ad campaign performance and identifying ways to drive better results. But no single data point tells the full story of how your campaigns are performing out in the real world.

A low click-through rate, for example, could be the product of ineffective messaging or ad design—or it could be the result of poor audience targeting. Other factors may also be at play. In many cases, the cause of poor performance can’t easily be pinned down to one simple reason.

And while the performance metrics mentioned above are a valuable starting point in evaluating campaign performance, an overreliance on these broad metrics can obscure more revealing truths found by digging deeper into performance analytics.

Due to this complexity, it’s important to work with a digital advertising partner that can combine these performance metrics with their own experience and expertise. With powerful analytics tools and a deep understanding of how to interpret performance metrics, these small business marketing consultants can identify the best strategies for optimizing your digital ad campaigns.

Ready to harness the full potential of your company’s digital performance metrics? Contact Cox Media today to learn more.