Which metrics in our monthly reports directly add value to the client’s bottom line? In this article, we’ll take a closer look at using business-driven calculations to move the needle for our paid media clients. These metrics, often referred to as Marketing Performance Indicators (MPIs), are used to align marketers and business owners for incremental online success.
Overview
Third-party cookie deprecation (delayed again!) , iOS updates, and a laundry list of tracking discrepancies in the past 5-10 years have marketers bracing for a future with less actionable data at our fingertips. To pave the way for these changes, marketers should set their sights on metrics that indicate the health of cross-channel efforts. In a world where attribution is weakening by the day, MPI’s focus on what matters – online business growth.
R.I.P. Vanity Metrics
Impressions, Clicks, CPCs, CTRs and other “vanity metrics” are becoming secondary in digital marketing reports. These numbers are still relevant to us as marketers but clients are growing tired of meaningless metrics. They’re looking for more leads, sales, sign-ups, etc. Nothing else will do.
Put simply, businesses are seeking results beyond cheaper clicks and better click-through rates. It’s our job as PPC marketers to provide insights beyond the unreliable numbers each platform is passing off as gospel.
User Trends & Attribution Woes
Unsurprisingly, online consumer behavior has evolved. Our way of engaging, researching, and buying products online leaves additional discrepancies in tracking. This makes attribution modeling for less sophisticated clients next to impossible. MPI’s can help.
Example
You’re scrolling Instagram on your phone and a sponsored ad pops up for a product you like. You don’t take action.
Later that evening, you remember the brand and visit their website when a promo pop-up overtakes your browser.
“Hmm, 15% off my first purchase. I’ll take advantage of that”. You share your email and submit.
You receive a discount code in your inbox. Still, you don’t become a customer.
A month later, you see another ad for that same product. You go back to your inbox, click-through to the website, and make your purchase with the coupon code provided.
Which channel deserves the sale? Was it the ad? Was it the website interaction? Was it the promo code sent to your email?
MPI’s & How To Use Them
Tying paid media performance to financial growth is a great way to track the health and success of paid media spend in 2024.
Below are the MPI’s I use to help my client in the luxury travel & tourism space sell more sailboat charters during their busiest months. I don’t report on impressions, clicks, CTR, etc. because those numbers don’t put more money in the client’s bank account. However, AOV, CAC, and MER do just that.
Average Order Value (AOV)
Total Revenue / Number of Orders = AOV
“On average, how much $$ am I making per booking? How can I help increase this number?”
Customer Acquisition Cost (CAC)
Total Revenue / Total Cost of Marketing & Sales = CAC
“How much does it cost in marketing & sales to produce an online booking?”
Marketing Efficiency Ratio (MER)
Gross Revenue / Total Cost of Marketing & Sales = MER
“ROAS prioritizes profitability, not growth. What metric gives me a snapshot of all channels working together to promote our intended results?”
Conclusion
In a world where attribution, user behavior, and data quality is ever-changing, it’s important to root our efforts in data that matters. MPI’s provide a snapshot overview of how our marketing budgets can produce better results for clients. Choosing the right MPI’s can eliminate the noise of meaningless data points and create cross-team alignment on day one.
