KPIs and metrics are the same thing right? Nope. Often these two terms are used interchangeably, but we’re going to show you why you shouldn’t.
Digital marketing is filled with complicated jargon that confuses most new digital marketers, and sometimes even seasoned agencies. It is the nature of this fast moving industry to have to constantly learn what the latest trends are and what the hot new measures are to your clients, and that is why clarifying fundamental terms such as Key Performance Indicators (KPIs) and Metrics is crucial to your digital marketing success.
aA key performance indicator is a measurable value that allows businesses to assess how they are performing against targeted business objectives. KPIs are incredibly important to evaluate how successful your business efforts have been, and in the case of digital marketing, they are crucial to marking progress on your clients goals.
To put this into a digital marketing context, as a digital marketing agency you may have a client who wishes to generate more business leads. The natural KPI important to your client in this situation would be business leads generated in your digital marketing efforts.
What Is A Metric?
A metric is similar to a KPI in that it is used to track performance of business efforts, with the difference being that metrics are not as specific as KPIs. Using our digital marketing example, if your client has an overall goal of business leads generated, it’s important to look broader than the specific targeted KPI and include the metrics from further up the funnel such as Total Spend, Total Impressions and Total Engagement too.
This is particularly important in digital marketing to get an idea of how the campaign and funnel as a whole is performing, and it helps to paint a more cohesive story of performance that is easy to present to your client.
Still Feeling Confused?
I don’t blame you for feeling like you need to re-read the paragraphs above to make sense of the difference between key performance indicators and metrics, so just remember this summary:
KPI = Specific
Metric = Broad
How To Use Both In Your Reports
You might be thinking, “the more specific, the better, so I’ll just use KPIs then!”. Well, that may not be the best idea, and I’ll tell you why.
Think about how frustrating it would be for your client to hear in their end-of-month report from your digital marketing agency that their goal for business leads generated was not reached in this reporting period and there is no explanation as to why it was not reached. Metrics allow you to answer that why, as they allow you to show the client that the reason why the business leads generated goal for this month was not met, was because not enough is being spent on advertising. This is a simple example, but often it is a combination of metrics that lead either to meeting or falling short of a targeted KPI value.
Using both metrics and KPIs in your reporting creates a streamlined flow in presenting your efforts to your client and makes it pretty easy to identify where the problem areas are, or where progress is stemming from.
Using both of these tools also allows you as the agency or the presenter to provide an argument if targets are not met, because it is easy to show where there is a bottleneck instead of having to deal with an angry client who cant see why they are paying you if goals are not being met. It is important to remember that reaching business or digital marketing goals is a process and that it often involves constant tweaking of metrics in order to reach a targeted KPI goal.
Reports should be structured to tell the viewer, your client, a story of the performance of your digital marketing efforts. This can be done by breaking up your report into categorized sections that focus on the different aspects of your digital marketing efforts.
If, for example, you are doing a combination of email marketing, website reporting and social media marketing for your client, you could create a separate section in your report to highlight the performance in each of those disciplines. What many agencies tend to do, is highlight the most important KPIs at the beginning of each section, and then use the rest of the section to explain why the targeted KPI values have been met or not, using metrics to aid in your explanation.
Building on this, many agencies will use the introduction of their reports to highlight the targeted KPIs that were agreed upon in the client onboarding meeting and provide the most updated values for these KPIs as they are the items that the client wishes to know about the most.
Metric & KPI Marriage
So you can see that in business, and specifically in digital marketing, using metrics and KPIs together is not only recommended, but essential in order to provide a comprehensive overview of performance to stakeholders and clients, and key in cementing a good reporting experience.
Feel like you have an itch to learn more digital marketing tips and tricks? Take a look at our Oviond blog to see what else is bubbling in the digital marketing world.