HOW TO SET THE RIGHT KPI FOR YOUR DIGITAL MARKETING CAMPAIGN?

WHY SET THE RIGHT KPI? People are goal-driven. Setting the wrong KPI is like leaning ladder against the wrong wall. One ends up wasting lots of time and money doing work that doesn’t matter.

Whether you are working with an external digital marketing agency or doing it in-house, you need to have a way to gauge if your campaign is a success. Setting the right KPI is the critical first step towards dominating the digital space!

Advertisements can be broadly categorized into (1)Institutional ads or (2)Direct Response ads

Institutional ads are meant to generate awareness rather than to sell anything. It is suitable for retail businesses, government entities and brand owners.i.e. Samsung, Daikin, Apple etc. The sole purpose of such ads is to reach as many audiences as possible and enhance awareness of a topic or product.

Direct response ads aim to generate an immediate response from the audiences. The response could be in the form of actual sales or leads. It is suitable for ecommerce, service-based businesses or just about any SME looking to increase sales from digital.

KPI for Institutional ads: Impressions, tra�c, clicks, social signals(likes, shares, comments)

KPI for Direct response ads: Leads, sales, email signups

1 Set objective

If you are used to advertising on o�ine mediums such as TV or newspaper ads, this may sound shocking. Facebook and Google determine your ad costs based on the quality of your ad campaign! Yes, you may pay $5000 to reach 10,000 people while others pay $5000 to reach 100,000 people. This is not uncommon. For a detailed rundown of the auction platform, read https://icecube.asia/google-and-facebook-ads-auction-factors/

Due to the disparity, setting performance targets is not easy. However, one can do so based on 2 ways.

Have you run any campaigns before? Past campaign need not be of the exact same type. Google campaign data can be used as benchmark for Facebook ads campaign. Newspaper or magazine campaign count as well. In most cases, your goal is to find out the cost per customer acquisition. You can use the following formula:

Cost of ads campaign / no. of new customers gained = Cost per customer acquisition

If you have engaged any vendor previously, be sure to request campaign data. Once you have the data, you can do correlation to make your KPI more precise. For example, applying multiples to mitigate favorable factors in new campaign.

2 Benchmarking

Check Past DataA.

Certain large-scale organizations publish data on advertising costs by consolidating information from various channels. For example, Nanigans and Adespresso are advertising software companies in USA that organizes the data of all their users to generate a public report.

According to Adespresso, a Facebook click in Singapore costs an average of $0.41. If you are running a tra�c campaign, you can expect a budget of $10,000 to yield about 24,390clicks. The stats for each industry, country and campaign type vary, so make sure you benchmark your campaign against the right data.

(However, do note that data in Singapore is very limited. For more info, read https://icecube.asia/facebook-advertising-costs-singapore/ )

Checking Google keywords planer can give you an idea of cost per click for each keyword in Google advertising platform.

Public DataB.

3 Choosing your vendor/digital marketer

At this stage, try to have a cost per action(CPA) in mind, action being your objective .i.e. lead, sales, click, impression, signup etc.

Armed with this number, your digital campaign will be less of a guesswork.

If your CPA is unrealistically low, some vendors will not take up your project. This is actually a good thing. It saves time and money for both parties, and eliminates the possibilities of any disputes & unhappiness down the road.

If you don’t have a CPA, it’s fine as well. You can ask your vendor to estimate the projected results based on a given budget.i.e. 10k over 3months. Do note the difference between guarantee and projection, especially when going into a contract. Typically, vendors can only project the results, rather than guarantee anything because marketing takes into account human behavior which no one can predict with 100% accuracy.

Warning: Do not be taken in by overly good

promises. Bear in mind the salesperson is not the one running the campaign; it is

easy to overpromise. Request for realistic projection from the campaign specialist

instead.

1 Set up trackingWhether you are outsourcing your digital campaigns or doing in-house, you must set up tracking! Not doing tracking is like not doing accounting for your business. You do not know which channel is bringing in the sale and how to optimize it. I have seen businesses spending 20k on Google ads every month thinking that their sales came from there but their analytics says otherwise.

2 Be patientEven if you run paid ads, you need to wait at least 3 months before drawing any conclusion about the channel or the vendor. Optimization of campaign takes time. Typically, the 1st month is spend on split-testing and finding the right formula.

3 Choose the right methodBased on your objective, you need to choose the right method.

Many businesses come requesting for SEO services and claim they want to get leads and sales. SEO is a tra�c generation and NOT a leads

WHAT’S NEXT?

Don’t believe? Check your google analytics. On more occasions than we can count, we embarked on both SEO and SEM, while closely monitoring the analytics and found that SEO doesn’t provide the leads.

Same goes for activities such as web design, video production and instagram marketing. Sure, they are trendy and cool, but before embarking on them, it is always important to take a step back and ask what your objective is.

Conclusion As discussed earlier, ad campaign quality is everything to Google and Facebook. They are ready to reward or penalize your business based on that alone. Mediocre advertisers pay up to 100 times more than effective advertisers. Setting the right KPI at the outset becomes doubly important. You don’t want to spend a fortune on digital marketing only to learn that a particular vendor or channel doesn’t work for you.

To find out our methodology & formula in getting on the good side of these online giants, check out: https://icecube.asia/our-methology/