Beyond Clicks: Exploring Advanced Digital Metrics

If you’re still back in the dark ages, measuring your digital performance with clicks and impressions, you probably aren’t getting the kind of returns you need to grow your business or even to survive in the hypercompetition that is today’s marketplace. You need to dig deeper to find metrics that actually correlate with your goals. Once you start monitoring advanced digital metrics that actually help you assess performance and help you gauge the effectiveness of your marketing campaigns beyond basic measures like clicks or views. Today, we’ll explore advanced digital metrics and how to use them to assess campaigns and explode your performance. So, buckle up and read on!

advanced digital metricsThe importance of metrics

Assessing any metrics is better than nothing. But, making decisions based on the wrong metrics can easily result in wasted money and effort. Sacrificing to improve metrics like clicks, impressions, followers, and visitors (we call these vanity metrics) can mean you miss opportunities to improve performance that actually helps achieve your goals. Vanity metrics are data points that seem impressive but don’t provide insights into the impact of marketing efforts. They can be misleading, superficial, and inconsistent. They can also be overly simplistic, skip nuance and context, and don’t help you improve in any meaningful way.

Here are examples of vanity metrics:

  • Page views or visits
  • Running total of customers
  • Email subscribers and open rates
  • Number of social media followers
  • Number of downloads
  • Number of likes
  • Number of sign-ups
  • Number of comments

Just because these metrics are readily available doesn’t mean you should prioritize them in planning for future marketing campaigns or even consider them. A focus on vanity metrics can delude you into thinking that you’re on the right track when, in fact, you aren’t seeing any change in revenue or closing the gap in reaching other goals.

In contrast, assessing advanced digital metrics translates to actionable insights that DO deliver meaningful results, such as increasing revenue, improving SEO (search engine optimization), generating engagement, or other outcomes that demonstrate your business’s ability to grow and thrive.

Let’s move into the meat of our discussion: the digital metrics you SHOULD monitor on a consistent basis.

Advanced digital metrics you should monitor

Below, in no particular order, are the 10 advanced digital metrics you should monitor, track, and use to provide actionable insights.

vanity metrics
Image courtesy of Learn G2

1. Customer acquisition cost (CAC)

This metric calculates the total cost of acquiring a new customer. It includes everything from advertising costs to marketing team salaries. Don’t forget to add the costs you incur by running loyalty programs and offering free trials. We’ll use this number next when we discuss customer lifetime value.

The goal is to reduce CAC without limiting the number of new customers you acquire. To reduce CAC, look at the elements that contribute most to this cost and experiment with ways to reduce or remove this cost. For instance, if your advertising costs are high, experiment with different channels and ways to improve the performance of your ads, such as changing the call to action (CTA), the headline, keywords (if you’re using Google Ads), and images. Run A/B tests or multivariate testing to ensure you’re getting the most from the ads you run.

2. Customer lifetime value (CLV)

CLV predicts the total revenue a business can reasonably expect from a particular type of user. Companies commonly have different customer groups with different CLV values. For instance, for a SAS (software as a service) company, you might have customers who sign up for the free or lowest-cost package. Then, rather than switch to a higher-priced option over time, they stay with the low-price tier. You might consider downgrading the services included in this tier in an attempt to coax these consumers to either upgrade or drop your service when the cost of serving them is the same or higher than the value they represent. Meanwhile, you might have customers who represent a high value to your firm. You might offer them additional perks to ensure they don’t leave you for a competitor over time.

customer lifetime value
Image courtesy of Clever Tap

By calculating the total costs incurred for each customer segment relative to the value they represent to your firm, you can easily formulate strategies for each customer segment that maximize the rewards you get. However, be careful that you don’t ignore the non-monetary value as some customers who represent a small monetary value might be great at introducing your product to new prospective customers or giving your products positive reviews that help overcome skepticism that keeps prospective customers from buying.

3. Return on advertising spend (ROAS)

ROAS measures the value of customers you bring in from your advertising efforts. Since digital marketers don’t control other costs associated with the product, ROAS is a better evaluation of performance than ROI, as ROI includes costs such as manufacturing and delivering products to customers.

4. Conversion rate

The conversion rate reflects the percentage of consumers reached through your digital marketing efforts who complete a desired action (like filling out a form, signing up for a newsletter, or making a purchase) divided by the total number of consumers reached. While some experts only calculate conversion rates based on website visits, it’s more appropriate to include all your marketing efforts when calculating conversion rates. Perhaps an example will help.

Let’s say you run an advertising campaign on TikTok. The ad reaches X consumers, and Y click through to your landing page, but only Z actually complete the action (in a later section, we’ll discuss attribution modeling, which helps you apportion a sale to more than one channel). Your conversion rate is:

Z/X

5. Click-through rate (CTR)

CTR is one of those metrics straddling the boundary between a vanity metric and an advanced digital metric. CTR is the percentage of people who click on a link out of the total number of people who see the link. It’s useful for gauging how well your ads are performing in terms of attracting user attention.

However, a click isn’t a conversion, regardless of how much you’d like it to be, any more than an impression is. Sure, users must see your ad or post before they can take action, and a click shows interest, but even after you encourage a user to click, you have a long way to go before you can close the deal. Still, a click is better than no click.

6. Cost per click (CPC)

This measures how much you pay each time someone clicks on your ads. Ads on platforms like Google Ads don’t charge you until someone clicks on your ad, which makes them especially valuable and cost-effective. Other types of advertising, especially on social media platforms, may use different means to calculate costs, making CPC less meaningful.

A number of factors impact CPC. For Google Ads, your quality score and your bid amount factor heavily in your CPC. Improving your landing page and SEO both have a positive impact on your quality score, thus reducing CPC.

7. Bounce rate

This metric shows the percentage of visitors who navigate away from the site after viewing only one page. A high bounce rate could indicate that your landing pages are not relevant to your visitors or not engaging enough.

The bounce rate is often high for a news site as users navigate to read a specific post, but a high bounce rate for an e-commerce site is a bad thing as it indicates a poor user experience and portends a low conversion rate.

8. Engagement rate

Especially relevant on social media, this metric measures the level of interaction—likes, shares, comments—with your content relative to your number of followers or reach. It helps you assess how much your content resonates with your audience.

A high engagement rate usually correlates with a higher CTR and the potential for a higher conversion rate. High engagement has other benefits, as well. High engagement is weighted high as a factor in calculating SEO, and engagement acts to amplify your message by sharing a user engagement with their friends.

9. Attribution modeling

multi-channel attribution
Image courtesy of Adalyz

As you can see in the image above, users often don’t convert during their first visit to your website. Sometimes, it takes two, three, or more visits before the user decides to take the plunge by making a purchase. These visits may all use the same channel or may combine different channels based on which channel appeals to a user at any given time. Each channel used makes some contribution toward the final purchase so eliminating any of them would reduce your conversion rate as well as your revenue. Hence, it’s appropriate to apportion the value of the sale among the channels used as part of the conversion process.

By default, Google Analytics assigns the entire value of a conversion to the last channel used prior to conversion — termed last click attribution. Is that fair? Does it help build insights you can use to improve performance?

The answer to both questions is NO.

Instead, you should give credit to every channel used during the conversion process. Avinash Kaushik, the Google Analytics guru, recommends giving most of the credit for a conversion to the first and last click and then spreading the remainder across the middle clicks. He recommends experimenting with how much credit is assigned to each click until you find the optimal combination.

With attribution modeling, you now have the tools to build effective insights that guide which channels and how much to spend on advertising campaigns.

10. Churn rate

For subscription-based services, the churn rate is the percentage of customers who cancel their subscriptions. It’s vital for understanding customer retention and satisfaction. You can also calculate a churn rate for customers to determine how long you keep a customer before they leave. This is a great calculation to use as part of your CLV segmentation.

Conclusion

By monitoring these advanced digital metrics, marketers build insights they can use to refine their strategies, optimize spending, and enhance customer engagement, ultimately driving better business outcomes.

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Hausman and Associates, the publisher of MKT Maven, is a full-service marketing agency operating at the intersection of marketing and digital media. Check out our full range of services.