Tips for Measuring Marketing Effectiveness


The following is a guest post by Raul Harman. Raul is editor in chief at Technivorz blog. I have a lot to say about innovations in all aspects of digital technology and online marketing. You can reach me out on Twitter.

Marketing isn’t a static aspect of a business. That’s why marketers follow it constantly and make endless adjustments to optimize for better performance.

Without measuring the effects marketing has on overall business, there is no way of knowing its results. If left unchecked, this can cause pointless spending that leaves people questioning its value to the company.

However, marketing is very much capable of delivering results, and this can be proven. All you need to do is measure it.

Take a look at these tips and metrics for measuring marketing effectiveness. Use them to evaluate your own marketing efforts, and they will help you understand how important it actually is for your business.

Determine KPIs (Key Performance Indicators)

KPIs are metrics used to measure how effective a business is at achieving its key goals. It also helps determine whether your ROI is positive or negative.

When talking about marketing, this translates into metrics the track and measure performance across multiple channels. By setting up KPIs to measure the relevant features of marketing, you have an accurate, data-based overview of what tactics work for your business.

While KPIs include multiple types of metrics, from conversion to engagement, deciding what to follow can be a difficult task. That’s why you need to focus most of your attention on actionable metrics, such as retention, which calculates the revenue from repeated business.

This also makes you stop measuring vanity metrics that don’t drive the business forward, and concentrate on actually measuring marketing for performance.

Track Conversion Rates

Conversion rates are used to determine how effective your marketing efforts are at driving leads along the sales funnel. Tracking them across multiple channels allows you to check how much the leads are converting into customers during the buyer’s journey.

You can also use the conversion rates to measure the effectiveness of your content. This will help you make adjustments to increase content performance, especially when using A/B tests to double the conversion. So, while you may think that another CTA button on your landing page is too insignificant, it might boost the clickthrough rate and turn a couple of leads into buyers.

Generate Relevant Data

While marketing relies heavily on analytical tools to generate data, sales and customer support don’t. They interact with real people on a daily basis, which allows them to gather more accurate information and know why, for example, the company saw a spike in sales during the last month.

Staying oblivious to this kind of data prevents marketing from knowing how to act and react in certain situations.

One way of getting around this problem is through performing paid surveys online. It allows marketers to receive relevant feedback from customers and align campaigns according to first-hand information, as well as analytics.

To generate the most authentic results, remember to target a large test group, and stay focused on one piece of information at a time.

Calculate Customer Acquisition Cost (CAC)

The cost of acquiring new customers is a key marketing metric for determining how much a business needs to spend in order to earn. It also has the potential of being used to establish the marketing budget, and prove the spending is warranted.

It’s also fairly simple to calculate. Add up all the spending on marketing for one month (including payroll) – that’s your monthly marketing budget. Now, divide it with the total number of customers acquired for that same period. So, for example, if you spend $5,000 per month on marketing and receive 50 new customers, your CAC is $100.

Regularly calculating this number gives you an overview of how productive your marketing efforts are, and how much you will need to spend to move it forward.

Work Out Customer Lifetime Value (LTV)

After knowing how much it costs to acquire a customer, you will need to calculate how much that customer is worth to your company. This is their LTV. To calculate a customer’s LTV, multiply the standard amount the customer spends with the number of repeated purchases and the average retention time.

Say your customer has an LTV of $75, and your CAC remains $100 - that’s not good for business. However, if your customer annually spends $75 over four years, your business makes $600, so the cost of $100 for their acquisition is reasonable.

Since no customer is the same, comparing CAC with LTV lets you figure out the effectiveness of your marketing when it comes to delivering the right kind of customer to your business.


Use these performance metrics to see how much business is being driven solely by marketing. This will not only measure the effectiveness of your marketing efforts across all channels, but also their quality.

Remember to use multiple metrics over a longer period of time. In doing so, you will have a blueprint of how, where, and when to invest money into marketing in order to achieve quick results and long-term goals.

Don’t Judge a Landing Page by its Source


Landing pages are some of the most important pages on our website. They are the pages that people will see when they first click through on an ad, and give us a chance to make the kind of first impression that piques their interest and gets them moving through the sales funnel.

And because landing pages have such an outsized influence on the marketing process, these are the pages we are most likely to test. We want to know which pages lead to higher conversion rates and lower acquisition costs.

But a word of warning for all the would-be optimizers out there. Do not judge a landing page by its source.

Let me explain.

While it can be tempting to open up your Google Analytics account and jump down the Landing Pages to compare the metrics of one page against another, here is why that is not a good idea.

To truly test whether one landing page works better than another, we need to make sure that all other factors are equal. There are a lot of things that might influence the performance of a landing page, such as whether visitors are seeing it on mobile or desktop, the action we are asking them to take when they land on the page, what the ad said that brought them there, and of course, the source.

Visitors from Facebook might perform different than visitors from Google, from Bing, from Twitter, from Yahoo, etc.

So in order to truly test landing page performance, we must ensure that the types of visitors getting to the pages are the same. How do we do that? We test different pages in the same ad groups.

In Adwords, we duplicate ads and change the landing page. In Facebook, we create two ads in the same ad set and send them too two different landing pages. For our banners, we create campaigns that use the same ads but send traffic to two different pages.

Instead of using Google Analytics to determine what pages are working best, we use the platforms themselves to split the traffic between multiple pages and report back on performance.

Data and analytics are great for marketers. But unless you are wary of all the ways data can deceive you, you risk making poor decisions with it.

Use Google Analytics to Learn Who Your Customers Are

There are a lot of ways companies can learn more about their customers. Surveys, sign up forms, interviews, focus groups and social media listening are some. But most companies overlook a great tool at their disposal, that just happens to be free and non-intrusive – Google Analytics.

Google Analytics can tell you all kinds of things about who is visiting your website, who is buying from you, who is reading your content, and more. Things you can use to better target your advertising, craft more appropriate messaging, design better experiences, etc. Things like…

  • Age ranges
  • Gender
  • Geographic location – city, state, country
  • Technology use – device, browser, operating system
  • Interests (Affinity Categories) – these are users that Google has determined are interested in purchasing goods or viewing content in specific categories, from food to books to technology and more
  • Interests (In-market Categories) – these are users that Google has identified as actively shopping for specific goods or services

The more you know about your customers, the better you can serve them. Not only that, but you’ll be better armed with the information you need to go out and recruit more of them. Data is a marketer’s best friend. So use what you have.

What You Measure Matters

Pat yourself on the back if you measure the impact of your marketing in a scientific way. Learning how to measure what you’re doing, the impact you’re having, and the sales you’re generating is a critical part of the marketing process and profession.

It may not be as outwardly glorious as the artistic side of marketing, but it is what makes marketing a science. It’s what allows us to optimize what we do in such a way that we can grow companies without wasting money.

But this one truth is important for all those measuring their marketing effectiveness: what you measure matters.

Marketers seem to be constantly searching for the one key metric. If we can only identify that one thing that tells us whether something is working or not, our jobs would be so much simpler.

But the truth is, success or failure are only determined by looking at a combination of metrics. Whether you’re looking at conversion rate, cost per conversion, average sale value, total sales, profit or something else entirely, it’s never going to tell you the full story. Only by combining several metrics into one report will you truly get a holistic look at your company’s, or campaign’s performance.

What you measure matters, because if you’re measuring the wrong thing, you’ll make decisions based on incorrect results. Just because conversion rate is higher, doesn’t mean what you’re doing is working.

So the message is this, don’t fall in love with one metric, or spend your time chasing that one holy metric that will save your business. It doesn’t exist. You must find the right set of metrics that will help you manage your business and always take a more holistic approach.

The Problems with Analytics

Data is a good thing. The more we know about our customers, our website visitors, our business processes, the better off we should be.

But there are problems that come with analytics. If you are working in a data-driven company, or are in the process of changing over to a data-driven culture, be sure to avoid these common missteps.

1. The data is wrong.

The first problem that many companies encounter is that the data they are collecting and analyzing is incorrect or incomplete. Often you’ll find that there are gaps in your data, or things don’t match from one system to the next. Then you have to go back and try to piece your data together manually to get a more accurate look at your business.

Sometimes, it is not immediately obvious that the data is wrong. So you start using it to make important business decisions. And you don’t find out until it’s too late that those decisions were made looking at incorrect information.

You need to be very confident that your data is correct and complete before relying on it to make important decisions that will impact the future of your business.

2. You’re using the wrong metrics.

Know what problem you want to solve or what question you want to answer before you start getting too involved with data analysis. It is far too easy to spend a lot of time and energy analyzing one metric or set of metrics, when it’s something else entirely that should be commanding your attention.

Just because you are able to see something, doesn’t mean it’s important. Be sure to prioritize your data analysis based on the impact it can have on your business.

3. You’re missing the big picture.

Analysis paralysis is real, people. It’s when you get too bogged down in vast world of analytics and are unable to pull yourself out and look at your business as a whole.

Sure, it’s easy to think that data will solve all your problems. If we improve this metric and that metric, the business will naturally improve with it. But if you start thinking on a smaller scale, focusing too intently on the numbers, you may find yourself unable to see the forest for the trees.