10 Essential Digital Marketing Metrics and How to Calculate Them

We all know that understanding key digital marketing metrics is crucial for measuring your (campaigns') success and making data-driven decisions. By tracking these metrics, you can identify areas for improvement, optimize your strategies, and ultimately achieve your business goals.

From time to time you might also catch yourself thinking: “How exactly did we calculate this again?”

No worries, I do to. So to help us both, here’s a little cheat sheet with common (digital) marketing metrics and how to calculate them.

1. Conversion Rate

• Definition: The percentage of website visitors who take a desired action, such as making a purchase, signing up for a newsletter, or filling out a contact form.

• Calculation: Conversion Rate = (Number of Conversions / Total Number of Visitors) * 100%

2. Click-Through Rate (CTR)

• Definition: The percentage of people who click on a link or ad after seeing it.

• Calculation: CTR = (Total Clicks) / (Total Impressions) x 100%

3. Cost Per Click (CPC)

• Definition: The average cost per click on a paid ad.

• Calculation: CPC = Total Cost of Clicks / Total Number of Clicks

4. Cost Per Acquisition (CPA)

• Definition: The average cost to acquire a new customer through a specific marketing channel.

• Calculation: CPA = Total Cost of a Campaign / Number of New Customers Acquired*
  *(attributable to campaign efforts, opinions can differ on this part)

5. Customer Lifetime Value (CLTV)

• Definition: The total revenue a customer generates for your business over their lifetime.

• Calculation: CLTV = Average Customer Lifespan * Average Purchase Frequency * Average Purchase Value

6. Customer Acquisition Cost (CAC)

• Definition: The total cost to acquire a new customer.

• Calculation: CAC = Total Cost of Customer Acquisition / Number of New Customers Acquired

7. Net Promoter Score (NPS)

• Definition: A metric that measures customer loyalty and satisfaction.

• Calculation: NPS = % Promoters - % Detractors

8. Earnings Per Click (EPC)

• Definition: The average revenue generated per click on an affiliate link.

• Calculation: EPC = Total Earnings / Total Clicks

9. Return on Ad Spend (ROAS)

• Definition: A measure of the profitability of a paid advertising campaign.

• Calculation: ROAS = Total Revenue Generated from Ads / Total Cost of Ads

10. Cost Per Lead (CPL)

• Definition: The average cost to generate a lead through a specific marketing channel.

• Calculation: CPL = Total Marketing Campaign Spend / Total Leads Generated

By regularly tracking and analyzing these metrics, you can make informed decisions about your digital marketing strategies and optimize your campaigns for maximum effectiveness.