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The digital age has brought a flood of data and transparency to the hands of advertisers and eCommerce business owners. It’s almost impossible to imagine running a marketing campaign without having some type of attributable clicks and success to it.
However, this is a blessing and a curse at the same time: the overflood of information and data brings a lot of people into a stage of paralysis-analysis where they don’t know which metrics to track in order to successfully grow their business and marketing efforts.
It doesn’t matter whether you are a data scientist, the CEO of a big corporation or a high-school football coach, everybody needs to use data to monitor and evaluate performance.
The main difference between a business that is doing well and one that is doing great is that the latter thrives off of the right decision making that is backed by data.
By the end of the article you’ll know what eCommerce analytic metrics are important to keep track of in order to provide sustainable and long-term growth for your DTC eCommerce business. If you meet one of the following criteria then this is for you:
From the difference between metrics and KPIs to the the different cohorts of your audience up to Google Analytics Best Practices, we are going to cover everything you need to know in order to stay in on top of your data & make sure you take the right decisions that lead to the long term success of your business and marketing campaigns.
Let’s dive into the difference between metrics and KPIs and if you feel like you don’t want to read the whole article (although you should! ☝🏻), feel free to skip ahead…
Skip ahead 👇
Before we go into what metrics to keep track of for your eCommerce brand and how to go about analysing them when it comes to Google Analytics, what ARE metrics? And why do some people call them KPIs? Are they synonyms or do they actually mean something completely different.
What is a metric?
A metric is a quantifiable, consistently defined measurement of performance. Commonly known metrics can range from creative performance metrics like click-through rates to website performance metrics like conversion rate or average order value.
The list of eCommerce metrics as mentioned above is long. There are metrics for Google Analytics, your online store, email marketing and even custom metrics that you can create yourself that are derived from two or even three different usually independent metrics.
What is a KPI?
KPI - key performance indicator - although a metric, the difference is a KPI is an important metric. A KPI is a metric that is directly correlated to the growth of your business or the respective marketing channel.
While a metric like page visits is important to be aware of, orders is the metric that actually drives the growth within your business. Orders then would be your KPI. You can have and even should have different KPIs for different scenarios and measurements within your business.
While common website performance KPIs are things like conversion rate or average order value, for your Facebook marketing your KPIs should focus on things like ROAS, CTR or even spend.
As mentioned above - a KPI is a metric that is important to YOUR business and relative to your focus and strategy within your business. You shouldn’t just take on blank KPIs into your business.
Is email marketing an important part of your traffic pie? Well, then you should focus on completely different KPIs than a business that gets most of their traffic from organic channels. Said differently, key performance indicators are subjective, specific targets you want YOUR store to achieve.
Additionally to that KPIs should always be put into relation to your current performance. Meaning, clients often ask me: what is a good CTR? Or is our CTR good?
No KPI is inherently good or bad.
Although we do have some general benchmarks across all our accounts, those are not set in stone. A proper KPI should always be measured against your baseline performance that you have been hitting in the past and your target KPI that you aim to achieve in the future.
So, for example, a click-through rate is definitely a metric. However, if Facebook Ads are an important marketing channel for you & your business and you want to increase your creative performance, then a CTR target is definitely a KPI. If we were to apply those examples to creative testing within Facebook & your average account CTR would be 0.8% and your desired metric would be 1% CTR, then getting above a 1% CTR for every creative test would definitely be your KPI.
“You should be able to use your metrics (and the KPIs you define for them) to shape the future of your store in the way you want.”
After we have now covered the minimal basics that you should be aware of when starting to measure your eCommerce analytics metrics & set KPIs, let’s now talk about the actual story behind your data...
I know, managing and analysing your data can be painful.
There are so many different moving parts from different marketing channels to different business objectives, and I’ll not even start talking about the different teams dedicated to each respective area.
To grow your business you need to stay on top of your data and furthermore, you need to understand the story that the data tells you.
In order to achieve this, access to the data is only half the story, you need to understand the cohort-specific data and stack that data into a cohesive masterpiece.
Our visual representation for this masterpiece is a cake: three different layers that move from the big foundation (bottom layer) to the narrower top.
With every layer the consumer journey and how a particular person engages with your brand changes significantly. This is also the reason why your respective KPIs should change when moving from one cohort to another.
Bringing all that data together and being able to put this into perspective as well as into actionable strategies is the ultimate goal of this article. To achieve this we are going to cover a lot of ground.
Let’s start by diving into the cohort-specific data points that we analyse when we onboard a new account...
Probably the layer that you have the most information about, the cohort that is the biggest asset for your company and the people that trust your brand the most.
People often measure the value of their customers by metrics like AOV or LTV.
Full disclosure: Customer lifetime value is a terrible metric.
In every business, however, especially in the thriving world of eCommerce: cashflow rules. You’ll die waiting for “lifetime” and also for “in a couple years”. You need to set a specific timeframe to your LTV, a cohort-specific LTV.
You need to be aware of the metric that gives you a measurable increase of the value of every customer in a certain time frame after they have purchased with you.
We call this our 60-Day LTV or also “cash multiplier”. This is our version of LTV that takes into account the latency of the monetization of an acquired customer and how quickly their value for your business is going to increase.
The goal?
At least a 30% increase in money-spent with your brand within 60 days and 100% within a year.
After you have identified your 60-Day LTV, you have successfully identified the increase of value for your average customer that checks out with your average order value.
By knowing this metric, you can structure your marketing campaigns a lot better & plan your demand forecast a lot more accurately.
However, there’s no customer that purchases a product for $65,34 in your store.
The reason?
Because you don’t have any products at this price. Every AOV is a conglomerate of all your orders. There are customers that have purchased a $40 product with you, and customers that have purchased a $90 product with you, and every single customer has a different value to you and your business.
You should be aware of this and the different values that you can assign to each customer after they have purchased with you.
Your goal is to acquire customers today, whose future revenue will compound. Doing that requires to answer three questions:
All of those questions you can answer by analysing your LTV (life-time value) by SKU or better said by product-specific cohorts.
You might be saying right now: “What are you talking about? I just understand the jibish... “
So, let’s row back a little and let me explain it to you in plain english. Let’s use an example to visualize it better:
Imagine a skincare brand: they have three main products that drive their revenue:
Coming from an AOV-driven mindset you might argue that the third cohort (people buying the complete skincare kit) would be the most valuable for the skincare brand.
However, after more thorough research: the skincare brand identified that people that bought the anti-aging cream for only $19.99 increased about 65% in value over the next 60 days and an incredible 200% in value over the next year.
In the meanwhile: the other cohorts only increase about 20% in value in the next 60 days and 50% for the next year.
This research paired with the fact that it is a lot cheaper to acquire a customer for a $20 product than for a $60 product, leads to the fact that this cohort is a lot more profitable for this brand and they should completely lean into acquiring this cohort of customers through their marketing efforts.
This is the reason why this should be one of the top eCommerce analytics metrics that you should be aware of. Knowing your product performance and the associated value that comes with the customers of this product will not only help you to predict demand better, but also shift your marketing campaign onto a more profitable path.
Pro tip: Especially when it comes to bottom line profit, you need to be aware of two things when it comes to your SKU analysis: SKUs are likewise the key to increasing your (1) LTV percentage and (2) monetary returns.
Increasing the value of your visitors and optimising your brand engagement as well as conversion rate.
The metrics that we are going to talk about in this section are all about making the most out of your traffic and leveraging already existing audiences...
The more customers your brand acquires the more expensive will be your customer acquisition cost. (CAC)
This is especially true for brands that get the lion’s share of their revenue from one traffic source like Facebook or Google Ads.
More people will be aware of your brand and you’ll have to break through completely new audiences that are more difficult and therefore more expensive to convert.
So, how do you win the fight?
By increasing your revenue per visitor and optimizing the efficiency of your marketing channels. In order to achieve this you’ll need to pull apart your best and worst performing traffic channels: organic, direct, paid, social, SMS and email.
Smaller eCommerce brands can scale on the back of paid acquisition, however, the bigger you get the more you have to worry about your traffic diversification - reliance on paid acquisition becomes increasingly difficult.
There will come a moment where you have reached a threshold and the best way to reduce your CAC is not by reducing your CAC, but rather by diversifying your traffic sources.
This is something that a lot of business owners miss out on, and even the majority of media buyers & digital marketers don’t understand, your ad account & its performance is majorly influenced by your traffic diversification.
If you have a more organic traffic, your retargeting traffic is automatically going to perform way better, more people will get your prospecting creatives and your overall paid acquisition will tend to perform a lot better.
For more mature brands you should always aim to not rely on one traffic source and that you have a well diversified traffic pie.
Talking about understanding your traffic channels and your holistic customer journey, one important metric that is not really volatile however, that we always analyse before running any campaign is lag time.
You can find this metric within your Google Analytics Account. Select your “Conversions” report, select “Multi-Funnel Channels” and click on “Time Lag”
This report will show you how long it took for the majority of your costumes to actually purchase with you after they have visited your website for the first time.
Based on this graph you can then focus and increase your remarketing efforts on visitors in this timeframe, since they are statistically speaking a lot more likely to convert with you then.
The time lag for this particular brand is nine days. Meaning if a visitor ends up purchasing, about 90% do this within the first nine day after they have visited the website.
Therefore, I would focus on the remarketing efforts in this timeframe and also increase the bids to increase the overall visibility.
At the top of our masterpiece we have our paid acquisition, from Google Ads to Facebook Ads, you can have a lot of different paid acquisition channels. However, since VictoryMedia solely focuses on Facebook’s advertising platform, we are going to focus on that primarily.
There are numerous factors that influence the performance of your Facebook Ads: creative, campaign structure, CPMs and conversion rates as well as external factors like COVID or iOS 14.
However, let’s focus on the metrics that we have seen are worth keeping an eye on…
CAC measures the total cost for your business to acquire a customer. Companies often rely on this metric to determine their profitability, the success of their marketing efforts and how much room they still have to push their marketing budgets.
You can use CAC as the inverse of your ROAS.
However, one metric that I find to be a lot more interesting and important to know, especially to evaluate your growth and marketing efforts, is a slight variation of the traditional CAC and that is new customer CAC (or “weighted CAC”). Surprisingly, this metric does not exist within Facebook and you can also not find this in any native eCommerce dashboard.
So, in order to get to this metric you need to pull your new customers report from Shopify or your particular shop system and divide it by your total ad spend: total ad spend / new customers.
Pssst... I've inserted the link to the complete creative optimisation guide here.
The most important advertising element in your campaign is the creative. However, how do you evaluate your creative performance?
Let’s take a look at the metrics important to drive creative performance...
People often tend to default to CPC, ROAS or CPM, although if you genuinely understand Facebook’s auction system, those metrics have nothing to do with the long-term success of your creative - those are the results, but not the actual reasons.
The reason why a creative performs well is because it does a great job at grabbing the attention of a prospect and converting this attention into a desire to know more about the product or service which ultimately leads to a purchase.
Therefore, you need to move away from trying to analyse your end results and take the conversation to the consumer behavior level, to properly understand your creative’s performance and how to improve it.
This is when we introduced the adjusted AIDA model to all our accounts. This framework is based on the AIDA principle that was introduced in 1898 by Elias Elmo Lewis which states that in order to have a successful and converting ad you need to make sure that the ad leads the prospect through the following stages:
We have taken this principle and asked ourselves what metrics can we pull from the Facebook Ads Manager dashboard that reflect those different stages. This is what we ended up with:
Those translated metrics give you the ability to evaluate your creative from four different angles:
It also gives you the opportunity to move away from the vague and subjective statement: “This creative is good” or “This creative is bad, let’s move on” and move you into a more objective and data-backed decision making process that will increase your overall creative performance based upon what your audience wants to see, not what you think your audience wants to see.
In case you want to know more about our adjusted AIDA principle and how we evaluate our creative’s performance, then we have a complete blog article on this which you can check out Here.
While supply and demand as well as external factors like COVID dictate the cost to advertise, a symbiotic relationship reigns between CPM, CPC, and CTR. They are interdependent, as soon as you have influenced one of those metrics, you’ll inevitably change the other one as well.
The former you can’t control (at least not much), however the latter is definitely in your hands and can be pushed into every direction from you.
Let’s take a look at a couple of examples, for you to better understand this principle of interdependent metrics:
Let’s take a look at those metrics from a beauty brand over the last three quarters:
First quarter:
Second quarter:
Third quarter:
What should you take out of this?
By influencing one of the metrics, you are able to influence the other ones.
So, If your ads ‘aren’t working’ and you’re blaming CPMs, you’re focusing on the part of the problem you can control the least.
Make sure to focus on the part that you can control which is CTR. CTR can be controlled and improved by improving your creative and at this moment you can then fall back upon our AIDA principle.
Those metrics can be pulled from different platforms and sometimes you have to pull two data sources from two different to arrive at the final metric that gives you a clear understanding.
However, the OG in the game is and has always been Google Analytics and what kind of an analytics blog article would this be if we didn’t at least grasped the importance of Google Analytics and how to get the most out of this tool…
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The digital age has brought a flood of data and transparency to the hands of advertisers and eCommerce business owners. It’s almost impossible to imagine running a marketing campaign without having some type of attributable clicks and success to it.
However, this is a blessing and a curse at the same time: the overflood of information and data brings a lot of people into a stage of paralysis-analysis where they don’t know which metrics to track in order to successfully grow their business and marketing efforts.
It doesn’t matter whether you are a data scientist, the CEO of a big corporation or a high-school football coach, everybody needs to use data to monitor and evaluate performance.
The main difference between a business that is doing well and one that is doing great is that the latter thrives off of the right decision making that is backed by data.
By the end of the article you’ll know what eCommerce analytic metrics are important to keep track of in order to provide sustainable and long-term growth for your DTC eCommerce business. If you meet one of the following criteria then this is for you:
From the difference between metrics and KPIs to the the different cohorts of your audience up to Google Analytics Best Practices, we are going to cover everything you need to know in order to stay in on top of your data & make sure you take the right decisions that lead to the long term success of your business and marketing campaigns.
Let’s dive into the difference between metrics and KPIs and if you feel like you don’t want to read the whole article (although you should! ☝🏻), feel free to skip ahead…
Skip ahead 👇
Before we go into what metrics to keep track of for your eCommerce brand and how to go about analysing them when it comes to Google Analytics, what ARE metrics? And why do some people call them KPIs? Are they synonyms or do they actually mean something completely different.
What is a metric?
A metric is a quantifiable, consistently defined measurement of performance. Commonly known metrics can range from creative performance metrics like click-through rates to website performance metrics like conversion rate or average order value.
The list of eCommerce metrics as mentioned above is long. There are metrics for Google Analytics, your online store, email marketing and even custom metrics that you can create yourself that are derived from two or even three different usually independent metrics.
What is a KPI?
KPI - key performance indicator - although a metric, the difference is a KPI is an important metric. A KPI is a metric that is directly correlated to the growth of your business or the respective marketing channel.
While a metric like page visits is important to be aware of, orders is the metric that actually drives the growth within your business. Orders then would be your KPI. You can have and even should have different KPIs for different scenarios and measurements within your business.
While common website performance KPIs are things like conversion rate or average order value, for your Facebook marketing your KPIs should focus on things like ROAS, CTR or even spend.
As mentioned above - a KPI is a metric that is important to YOUR business and relative to your focus and strategy within your business. You shouldn’t just take on blank KPIs into your business.
Is email marketing an important part of your traffic pie? Well, then you should focus on completely different KPIs than a business that gets most of their traffic from organic channels. Said differently, key performance indicators are subjective, specific targets you want YOUR store to achieve.
Additionally to that KPIs should always be put into relation to your current performance. Meaning, clients often ask me: what is a good CTR? Or is our CTR good?
No KPI is inherently good or bad.
Although we do have some general benchmarks across all our accounts, those are not set in stone. A proper KPI should always be measured against your baseline performance that you have been hitting in the past and your target KPI that you aim to achieve in the future.
So, for example, a click-through rate is definitely a metric. However, if Facebook Ads are an important marketing channel for you & your business and you want to increase your creative performance, then a CTR target is definitely a KPI. If we were to apply those examples to creative testing within Facebook & your average account CTR would be 0.8% and your desired metric would be 1% CTR, then getting above a 1% CTR for every creative test would definitely be your KPI.
“You should be able to use your metrics (and the KPIs you define for them) to shape the future of your store in the way you want.”
After we have now covered the minimal basics that you should be aware of when starting to measure your eCommerce analytics metrics & set KPIs, let’s now talk about the actual story behind your data...
I know, managing and analysing your data can be painful.
There are so many different moving parts from different marketing channels to different business objectives, and I’ll not even start talking about the different teams dedicated to each respective area.
To grow your business you need to stay on top of your data and furthermore, you need to understand the story that the data tells you.
In order to achieve this, access to the data is only half the story, you need to understand the cohort-specific data and stack that data into a cohesive masterpiece.
Our visual representation for this masterpiece is a cake: three different layers that move from the big foundation (bottom layer) to the narrower top.
With every layer the consumer journey and how a particular person engages with your brand changes significantly. This is also the reason why your respective KPIs should change when moving from one cohort to another.
Bringing all that data together and being able to put this into perspective as well as into actionable strategies is the ultimate goal of this article. To achieve this we are going to cover a lot of ground.
Let’s start by diving into the cohort-specific data points that we analyse when we onboard a new account...
Probably the layer that you have the most information about, the cohort that is the biggest asset for your company and the people that trust your brand the most.
People often measure the value of their customers by metrics like AOV or LTV.
Full disclosure: Customer lifetime value is a terrible metric.
In every business, however, especially in the thriving world of eCommerce: cashflow rules. You’ll die waiting for “lifetime” and also for “in a couple years”. You need to set a specific timeframe to your LTV, a cohort-specific LTV.
You need to be aware of the metric that gives you a measurable increase of the value of every customer in a certain time frame after they have purchased with you.
We call this our 60-Day LTV or also “cash multiplier”. This is our version of LTV that takes into account the latency of the monetization of an acquired customer and how quickly their value for your business is going to increase.
The goal?
At least a 30% increase in money-spent with your brand within 60 days and 100% within a year.
After you have identified your 60-Day LTV, you have successfully identified the increase of value for your average customer that checks out with your average order value.
By knowing this metric, you can structure your marketing campaigns a lot better & plan your demand forecast a lot more accurately.
However, there’s no customer that purchases a product for $65,34 in your store.
The reason?
Because you don’t have any products at this price. Every AOV is a conglomerate of all your orders. There are customers that have purchased a $40 product with you, and customers that have purchased a $90 product with you, and every single customer has a different value to you and your business.
You should be aware of this and the different values that you can assign to each customer after they have purchased with you.
Your goal is to acquire customers today, whose future revenue will compound. Doing that requires to answer three questions:
All of those questions you can answer by analysing your LTV (life-time value) by SKU or better said by product-specific cohorts.
You might be saying right now: “What are you talking about? I just understand the jibish... “
So, let’s row back a little and let me explain it to you in plain english. Let’s use an example to visualize it better:
Imagine a skincare brand: they have three main products that drive their revenue:
Coming from an AOV-driven mindset you might argue that the third cohort (people buying the complete skincare kit) would be the most valuable for the skincare brand.
However, after more thorough research: the skincare brand identified that people that bought the anti-aging cream for only $19.99 increased about 65% in value over the next 60 days and an incredible 200% in value over the next year.
In the meanwhile: the other cohorts only increase about 20% in value in the next 60 days and 50% for the next year.
This research paired with the fact that it is a lot cheaper to acquire a customer for a $20 product than for a $60 product, leads to the fact that this cohort is a lot more profitable for this brand and they should completely lean into acquiring this cohort of customers through their marketing efforts.
This is the reason why this should be one of the top eCommerce analytics metrics that you should be aware of. Knowing your product performance and the associated value that comes with the customers of this product will not only help you to predict demand better, but also shift your marketing campaign onto a more profitable path.
Pro tip: Especially when it comes to bottom line profit, you need to be aware of two things when it comes to your SKU analysis: SKUs are likewise the key to increasing your (1) LTV percentage and (2) monetary returns.
Increasing the value of your visitors and optimising your brand engagement as well as conversion rate.
The metrics that we are going to talk about in this section are all about making the most out of your traffic and leveraging already existing audiences...
The more customers your brand acquires the more expensive will be your customer acquisition cost. (CAC)
This is especially true for brands that get the lion’s share of their revenue from one traffic source like Facebook or Google Ads.
More people will be aware of your brand and you’ll have to break through completely new audiences that are more difficult and therefore more expensive to convert.
So, how do you win the fight?
By increasing your revenue per visitor and optimizing the efficiency of your marketing channels. In order to achieve this you’ll need to pull apart your best and worst performing traffic channels: organic, direct, paid, social, SMS and email.
Smaller eCommerce brands can scale on the back of paid acquisition, however, the bigger you get the more you have to worry about your traffic diversification - reliance on paid acquisition becomes increasingly difficult.
There will come a moment where you have reached a threshold and the best way to reduce your CAC is not by reducing your CAC, but rather by diversifying your traffic sources.
This is something that a lot of business owners miss out on, and even the majority of media buyers & digital marketers don’t understand, your ad account & its performance is majorly influenced by your traffic diversification.
If you have a more organic traffic, your retargeting traffic is automatically going to perform way better, more people will get your prospecting creatives and your overall paid acquisition will tend to perform a lot better.
For more mature brands you should always aim to not rely on one traffic source and that you have a well diversified traffic pie.
Talking about understanding your traffic channels and your holistic customer journey, one important metric that is not really volatile however, that we always analyse before running any campaign is lag time.
You can find this metric within your Google Analytics Account. Select your “Conversions” report, select “Multi-Funnel Channels” and click on “Time Lag”
This report will show you how long it took for the majority of your costumes to actually purchase with you after they have visited your website for the first time.
Based on this graph you can then focus and increase your remarketing efforts on visitors in this timeframe, since they are statistically speaking a lot more likely to convert with you then.
The time lag for this particular brand is nine days. Meaning if a visitor ends up purchasing, about 90% do this within the first nine day after they have visited the website.
Therefore, I would focus on the remarketing efforts in this timeframe and also increase the bids to increase the overall visibility.
At the top of our masterpiece we have our paid acquisition, from Google Ads to Facebook Ads, you can have a lot of different paid acquisition channels. However, since VictoryMedia solely focuses on Facebook’s advertising platform, we are going to focus on that primarily.
There are numerous factors that influence the performance of your Facebook Ads: creative, campaign structure, CPMs and conversion rates as well as external factors like COVID or iOS 14.
However, let’s focus on the metrics that we have seen are worth keeping an eye on…
CAC measures the total cost for your business to acquire a customer. Companies often rely on this metric to determine their profitability, the success of their marketing efforts and how much room they still have to push their marketing budgets.
You can use CAC as the inverse of your ROAS.
However, one metric that I find to be a lot more interesting and important to know, especially to evaluate your growth and marketing efforts, is a slight variation of the traditional CAC and that is new customer CAC (or “weighted CAC”). Surprisingly, this metric does not exist within Facebook and you can also not find this in any native eCommerce dashboard.
So, in order to get to this metric you need to pull your new customers report from Shopify or your particular shop system and divide it by your total ad spend: total ad spend / new customers.
Pssst... I've inserted the link to the complete creative optimisation guide here.
The most important advertising element in your campaign is the creative. However, how do you evaluate your creative performance?
Let’s take a look at the metrics important to drive creative performance...
People often tend to default to CPC, ROAS or CPM, although if you genuinely understand Facebook’s auction system, those metrics have nothing to do with the long-term success of your creative - those are the results, but not the actual reasons.
The reason why a creative performs well is because it does a great job at grabbing the attention of a prospect and converting this attention into a desire to know more about the product or service which ultimately leads to a purchase.
Therefore, you need to move away from trying to analyse your end results and take the conversation to the consumer behavior level, to properly understand your creative’s performance and how to improve it.
This is when we introduced the adjusted AIDA model to all our accounts. This framework is based on the AIDA principle that was introduced in 1898 by Elias Elmo Lewis which states that in order to have a successful and converting ad you need to make sure that the ad leads the prospect through the following stages:
We have taken this principle and asked ourselves what metrics can we pull from the Facebook Ads Manager dashboard that reflect those different stages. This is what we ended up with:
Those translated metrics give you the ability to evaluate your creative from four different angles:
It also gives you the opportunity to move away from the vague and subjective statement: “This creative is good” or “This creative is bad, let’s move on” and move you into a more objective and data-backed decision making process that will increase your overall creative performance based upon what your audience wants to see, not what you think your audience wants to see.
In case you want to know more about our adjusted AIDA principle and how we evaluate our creative’s performance, then we have a complete blog article on this which you can check out Here.
While supply and demand as well as external factors like COVID dictate the cost to advertise, a symbiotic relationship reigns between CPM, CPC, and CTR. They are interdependent, as soon as you have influenced one of those metrics, you’ll inevitably change the other one as well.
The former you can’t control (at least not much), however the latter is definitely in your hands and can be pushed into every direction from you.
Let’s take a look at a couple of examples, for you to better understand this principle of interdependent metrics:
Let’s take a look at those metrics from a beauty brand over the last three quarters:
First quarter:
Second quarter:
Third quarter:
What should you take out of this?
By influencing one of the metrics, you are able to influence the other ones.
So, If your ads ‘aren’t working’ and you’re blaming CPMs, you’re focusing on the part of the problem you can control the least.
Make sure to focus on the part that you can control which is CTR. CTR can be controlled and improved by improving your creative and at this moment you can then fall back upon our AIDA principle.
Those metrics can be pulled from different platforms and sometimes you have to pull two data sources from two different to arrive at the final metric that gives you a clear understanding.
However, the OG in the game is and has always been Google Analytics and what kind of an analytics blog article would this be if we didn’t at least grasped the importance of Google Analytics and how to get the most out of this tool…
The digital age has brought a flood of data and transparency to the hands of advertisers and eCommerce business owners. It’s almost impossible to imagine running a marketing campaign without having some type of attributable clicks and success to it.
However, this is a blessing and a curse at the same time: the overflood of information and data brings a lot of people into a stage of paralysis-analysis where they don’t know which metrics to track in order to successfully grow their business and marketing efforts.
It doesn’t matter whether you are a data scientist, the CEO of a big corporation or a high-school football coach, everybody needs to use data to monitor and evaluate performance.
The main difference between a business that is doing well and one that is doing great is that the latter thrives off of the right decision making that is backed by data.
By the end of the article you’ll know what eCommerce analytic metrics are important to keep track of in order to provide sustainable and long-term growth for your DTC eCommerce business. If you meet one of the following criteria then this is for you:
From the difference between metrics and KPIs to the the different cohorts of your audience up to Google Analytics Best Practices, we are going to cover everything you need to know in order to stay in on top of your data & make sure you take the right decisions that lead to the long term success of your business and marketing campaigns.
Let’s dive into the difference between metrics and KPIs and if you feel like you don’t want to read the whole article (although you should! ☝🏻), feel free to skip ahead…
Skip ahead 👇
Before we go into what metrics to keep track of for your eCommerce brand and how to go about analysing them when it comes to Google Analytics, what ARE metrics? And why do some people call them KPIs? Are they synonyms or do they actually mean something completely different.
What is a metric?
A metric is a quantifiable, consistently defined measurement of performance. Commonly known metrics can range from creative performance metrics like click-through rates to website performance metrics like conversion rate or average order value.
The list of eCommerce metrics as mentioned above is long. There are metrics for Google Analytics, your online store, email marketing and even custom metrics that you can create yourself that are derived from two or even three different usually independent metrics.
What is a KPI?
KPI - key performance indicator - although a metric, the difference is a KPI is an important metric. A KPI is a metric that is directly correlated to the growth of your business or the respective marketing channel.
While a metric like page visits is important to be aware of, orders is the metric that actually drives the growth within your business. Orders then would be your KPI. You can have and even should have different KPIs for different scenarios and measurements within your business.
While common website performance KPIs are things like conversion rate or average order value, for your Facebook marketing your KPIs should focus on things like ROAS, CTR or even spend.
As mentioned above - a KPI is a metric that is important to YOUR business and relative to your focus and strategy within your business. You shouldn’t just take on blank KPIs into your business.
Is email marketing an important part of your traffic pie? Well, then you should focus on completely different KPIs than a business that gets most of their traffic from organic channels. Said differently, key performance indicators are subjective, specific targets you want YOUR store to achieve.
Additionally to that KPIs should always be put into relation to your current performance. Meaning, clients often ask me: what is a good CTR? Or is our CTR good?
No KPI is inherently good or bad.
Although we do have some general benchmarks across all our accounts, those are not set in stone. A proper KPI should always be measured against your baseline performance that you have been hitting in the past and your target KPI that you aim to achieve in the future.
So, for example, a click-through rate is definitely a metric. However, if Facebook Ads are an important marketing channel for you & your business and you want to increase your creative performance, then a CTR target is definitely a KPI. If we were to apply those examples to creative testing within Facebook & your average account CTR would be 0.8% and your desired metric would be 1% CTR, then getting above a 1% CTR for every creative test would definitely be your KPI.
“You should be able to use your metrics (and the KPIs you define for them) to shape the future of your store in the way you want.”
After we have now covered the minimal basics that you should be aware of when starting to measure your eCommerce analytics metrics & set KPIs, let’s now talk about the actual story behind your data...
I know, managing and analysing your data can be painful.
There are so many different moving parts from different marketing channels to different business objectives, and I’ll not even start talking about the different teams dedicated to each respective area.
To grow your business you need to stay on top of your data and furthermore, you need to understand the story that the data tells you.
In order to achieve this, access to the data is only half the story, you need to understand the cohort-specific data and stack that data into a cohesive masterpiece.
Our visual representation for this masterpiece is a cake: three different layers that move from the big foundation (bottom layer) to the narrower top.
With every layer the consumer journey and how a particular person engages with your brand changes significantly. This is also the reason why your respective KPIs should change when moving from one cohort to another.
Bringing all that data together and being able to put this into perspective as well as into actionable strategies is the ultimate goal of this article. To achieve this we are going to cover a lot of ground.
Let’s start by diving into the cohort-specific data points that we analyse when we onboard a new account...
Probably the layer that you have the most information about, the cohort that is the biggest asset for your company and the people that trust your brand the most.
People often measure the value of their customers by metrics like AOV or LTV.
Full disclosure: Customer lifetime value is a terrible metric.
In every business, however, especially in the thriving world of eCommerce: cashflow rules. You’ll die waiting for “lifetime” and also for “in a couple years”. You need to set a specific timeframe to your LTV, a cohort-specific LTV.
You need to be aware of the metric that gives you a measurable increase of the value of every customer in a certain time frame after they have purchased with you.
We call this our 60-Day LTV or also “cash multiplier”. This is our version of LTV that takes into account the latency of the monetization of an acquired customer and how quickly their value for your business is going to increase.
The goal?
At least a 30% increase in money-spent with your brand within 60 days and 100% within a year.
After you have identified your 60-Day LTV, you have successfully identified the increase of value for your average customer that checks out with your average order value.
By knowing this metric, you can structure your marketing campaigns a lot better & plan your demand forecast a lot more accurately.
However, there’s no customer that purchases a product for $65,34 in your store.
The reason?
Because you don’t have any products at this price. Every AOV is a conglomerate of all your orders. There are customers that have purchased a $40 product with you, and customers that have purchased a $90 product with you, and every single customer has a different value to you and your business.
You should be aware of this and the different values that you can assign to each customer after they have purchased with you.
Your goal is to acquire customers today, whose future revenue will compound. Doing that requires to answer three questions:
All of those questions you can answer by analysing your LTV (life-time value) by SKU or better said by product-specific cohorts.
You might be saying right now: “What are you talking about? I just understand the jibish... “
So, let’s row back a little and let me explain it to you in plain english. Let’s use an example to visualize it better:
Imagine a skincare brand: they have three main products that drive their revenue:
Coming from an AOV-driven mindset you might argue that the third cohort (people buying the complete skincare kit) would be the most valuable for the skincare brand.
However, after more thorough research: the skincare brand identified that people that bought the anti-aging cream for only $19.99 increased about 65% in value over the next 60 days and an incredible 200% in value over the next year.
In the meanwhile: the other cohorts only increase about 20% in value in the next 60 days and 50% for the next year.
This research paired with the fact that it is a lot cheaper to acquire a customer for a $20 product than for a $60 product, leads to the fact that this cohort is a lot more profitable for this brand and they should completely lean into acquiring this cohort of customers through their marketing efforts.
This is the reason why this should be one of the top eCommerce analytics metrics that you should be aware of. Knowing your product performance and the associated value that comes with the customers of this product will not only help you to predict demand better, but also shift your marketing campaign onto a more profitable path.
Pro tip: Especially when it comes to bottom line profit, you need to be aware of two things when it comes to your SKU analysis: SKUs are likewise the key to increasing your (1) LTV percentage and (2) monetary returns.
Increasing the value of your visitors and optimising your brand engagement as well as conversion rate.
The metrics that we are going to talk about in this section are all about making the most out of your traffic and leveraging already existing audiences...
The more customers your brand acquires the more expensive will be your customer acquisition cost. (CAC)
This is especially true for brands that get the lion’s share of their revenue from one traffic source like Facebook or Google Ads.
More people will be aware of your brand and you’ll have to break through completely new audiences that are more difficult and therefore more expensive to convert.
So, how do you win the fight?
By increasing your revenue per visitor and optimizing the efficiency of your marketing channels. In order to achieve this you’ll need to pull apart your best and worst performing traffic channels: organic, direct, paid, social, SMS and email.
Smaller eCommerce brands can scale on the back of paid acquisition, however, the bigger you get the more you have to worry about your traffic diversification - reliance on paid acquisition becomes increasingly difficult.
There will come a moment where you have reached a threshold and the best way to reduce your CAC is not by reducing your CAC, but rather by diversifying your traffic sources.
This is something that a lot of business owners miss out on, and even the majority of media buyers & digital marketers don’t understand, your ad account & its performance is majorly influenced by your traffic diversification.
If you have a more organic traffic, your retargeting traffic is automatically going to perform way better, more people will get your prospecting creatives and your overall paid acquisition will tend to perform a lot better.
For more mature brands you should always aim to not rely on one traffic source and that you have a well diversified traffic pie.
Talking about understanding your traffic channels and your holistic customer journey, one important metric that is not really volatile however, that we always analyse before running any campaign is lag time.
You can find this metric within your Google Analytics Account. Select your “Conversions” report, select “Multi-Funnel Channels” and click on “Time Lag”
This report will show you how long it took for the majority of your costumes to actually purchase with you after they have visited your website for the first time.
Based on this graph you can then focus and increase your remarketing efforts on visitors in this timeframe, since they are statistically speaking a lot more likely to convert with you then.
The time lag for this particular brand is nine days. Meaning if a visitor ends up purchasing, about 90% do this within the first nine day after they have visited the website.
Therefore, I would focus on the remarketing efforts in this timeframe and also increase the bids to increase the overall visibility.
At the top of our masterpiece we have our paid acquisition, from Google Ads to Facebook Ads, you can have a lot of different paid acquisition channels. However, since VictoryMedia solely focuses on Facebook’s advertising platform, we are going to focus on that primarily.
There are numerous factors that influence the performance of your Facebook Ads: creative, campaign structure, CPMs and conversion rates as well as external factors like COVID or iOS 14.
However, let’s focus on the metrics that we have seen are worth keeping an eye on…
CAC measures the total cost for your business to acquire a customer. Companies often rely on this metric to determine their profitability, the success of their marketing efforts and how much room they still have to push their marketing budgets.
You can use CAC as the inverse of your ROAS.
However, one metric that I find to be a lot more interesting and important to know, especially to evaluate your growth and marketing efforts, is a slight variation of the traditional CAC and that is new customer CAC (or “weighted CAC”). Surprisingly, this metric does not exist within Facebook and you can also not find this in any native eCommerce dashboard.
So, in order to get to this metric you need to pull your new customers report from Shopify or your particular shop system and divide it by your total ad spend: total ad spend / new customers.
Pssst... I've inserted the link to the complete creative optimisation guide here.
The most important advertising element in your campaign is the creative. However, how do you evaluate your creative performance?
Let’s take a look at the metrics important to drive creative performance...
People often tend to default to CPC, ROAS or CPM, although if you genuinely understand Facebook’s auction system, those metrics have nothing to do with the long-term success of your creative - those are the results, but not the actual reasons.
The reason why a creative performs well is because it does a great job at grabbing the attention of a prospect and converting this attention into a desire to know more about the product or service which ultimately leads to a purchase.
Therefore, you need to move away from trying to analyse your end results and take the conversation to the consumer behavior level, to properly understand your creative’s performance and how to improve it.
This is when we introduced the adjusted AIDA model to all our accounts. This framework is based on the AIDA principle that was introduced in 1898 by Elias Elmo Lewis which states that in order to have a successful and converting ad you need to make sure that the ad leads the prospect through the following stages:
We have taken this principle and asked ourselves what metrics can we pull from the Facebook Ads Manager dashboard that reflect those different stages. This is what we ended up with:
Those translated metrics give you the ability to evaluate your creative from four different angles:
It also gives you the opportunity to move away from the vague and subjective statement: “This creative is good” or “This creative is bad, let’s move on” and move you into a more objective and data-backed decision making process that will increase your overall creative performance based upon what your audience wants to see, not what you think your audience wants to see.
In case you want to know more about our adjusted AIDA principle and how we evaluate our creative’s performance, then we have a complete blog article on this which you can check out Here.
While supply and demand as well as external factors like COVID dictate the cost to advertise, a symbiotic relationship reigns between CPM, CPC, and CTR. They are interdependent, as soon as you have influenced one of those metrics, you’ll inevitably change the other one as well.
The former you can’t control (at least not much), however the latter is definitely in your hands and can be pushed into every direction from you.
Let’s take a look at a couple of examples, for you to better understand this principle of interdependent metrics:
Let’s take a look at those metrics from a beauty brand over the last three quarters:
First quarter:
Second quarter:
Third quarter:
What should you take out of this?
By influencing one of the metrics, you are able to influence the other ones.
So, If your ads ‘aren’t working’ and you’re blaming CPMs, you’re focusing on the part of the problem you can control the least.
Make sure to focus on the part that you can control which is CTR. CTR can be controlled and improved by improving your creative and at this moment you can then fall back upon our AIDA principle.
Those metrics can be pulled from different platforms and sometimes you have to pull two data sources from two different to arrive at the final metric that gives you a clear understanding.
However, the OG in the game is and has always been Google Analytics and what kind of an analytics blog article would this be if we didn’t at least grasped the importance of Google Analytics and how to get the most out of this tool…
The digital age has brought a flood of data and transparency to the hands of advertisers and eCommerce business owners. It’s almost impossible to imagine running a marketing campaign without having some type of attributable clicks and success to it.
However, this is a blessing and a curse at the same time: the overflood of information and data brings a lot of people into a stage of paralysis-analysis where they don’t know which metrics to track in order to successfully grow their business and marketing efforts.
It doesn’t matter whether you are a data scientist, the CEO of a big corporation or a high-school football coach, everybody needs to use data to monitor and evaluate performance.
The main difference between a business that is doing well and one that is doing great is that the latter thrives off of the right decision making that is backed by data.
By the end of the article you’ll know what eCommerce analytic metrics are important to keep track of in order to provide sustainable and long-term growth for your DTC eCommerce business. If you meet one of the following criteria then this is for you:
From the difference between metrics and KPIs to the the different cohorts of your audience up to Google Analytics Best Practices, we are going to cover everything you need to know in order to stay in on top of your data & make sure you take the right decisions that lead to the long term success of your business and marketing campaigns.
Let’s dive into the difference between metrics and KPIs and if you feel like you don’t want to read the whole article (although you should! ☝🏻), feel free to skip ahead…
Skip ahead 👇
Before we go into what metrics to keep track of for your eCommerce brand and how to go about analysing them when it comes to Google Analytics, what ARE metrics? And why do some people call them KPIs? Are they synonyms or do they actually mean something completely different.
What is a metric?
A metric is a quantifiable, consistently defined measurement of performance. Commonly known metrics can range from creative performance metrics like click-through rates to website performance metrics like conversion rate or average order value.
The list of eCommerce metrics as mentioned above is long. There are metrics for Google Analytics, your online store, email marketing and even custom metrics that you can create yourself that are derived from two or even three different usually independent metrics.
What is a KPI?
KPI - key performance indicator - although a metric, the difference is a KPI is an important metric. A KPI is a metric that is directly correlated to the growth of your business or the respective marketing channel.
While a metric like page visits is important to be aware of, orders is the metric that actually drives the growth within your business. Orders then would be your KPI. You can have and even should have different KPIs for different scenarios and measurements within your business.
While common website performance KPIs are things like conversion rate or average order value, for your Facebook marketing your KPIs should focus on things like ROAS, CTR or even spend.
As mentioned above - a KPI is a metric that is important to YOUR business and relative to your focus and strategy within your business. You shouldn’t just take on blank KPIs into your business.
Is email marketing an important part of your traffic pie? Well, then you should focus on completely different KPIs than a business that gets most of their traffic from organic channels. Said differently, key performance indicators are subjective, specific targets you want YOUR store to achieve.
Additionally to that KPIs should always be put into relation to your current performance. Meaning, clients often ask me: what is a good CTR? Or is our CTR good?
No KPI is inherently good or bad.
Although we do have some general benchmarks across all our accounts, those are not set in stone. A proper KPI should always be measured against your baseline performance that you have been hitting in the past and your target KPI that you aim to achieve in the future.
So, for example, a click-through rate is definitely a metric. However, if Facebook Ads are an important marketing channel for you & your business and you want to increase your creative performance, then a CTR target is definitely a KPI. If we were to apply those examples to creative testing within Facebook & your average account CTR would be 0.8% and your desired metric would be 1% CTR, then getting above a 1% CTR for every creative test would definitely be your KPI.
“You should be able to use your metrics (and the KPIs you define for them) to shape the future of your store in the way you want.”
After we have now covered the minimal basics that you should be aware of when starting to measure your eCommerce analytics metrics & set KPIs, let’s now talk about the actual story behind your data...
I know, managing and analysing your data can be painful.
There are so many different moving parts from different marketing channels to different business objectives, and I’ll not even start talking about the different teams dedicated to each respective area.
To grow your business you need to stay on top of your data and furthermore, you need to understand the story that the data tells you.
In order to achieve this, access to the data is only half the story, you need to understand the cohort-specific data and stack that data into a cohesive masterpiece.
Our visual representation for this masterpiece is a cake: three different layers that move from the big foundation (bottom layer) to the narrower top.
With every layer the consumer journey and how a particular person engages with your brand changes significantly. This is also the reason why your respective KPIs should change when moving from one cohort to another.
Bringing all that data together and being able to put this into perspective as well as into actionable strategies is the ultimate goal of this article. To achieve this we are going to cover a lot of ground.
Let’s start by diving into the cohort-specific data points that we analyse when we onboard a new account...
Probably the layer that you have the most information about, the cohort that is the biggest asset for your company and the people that trust your brand the most.
People often measure the value of their customers by metrics like AOV or LTV.
Full disclosure: Customer lifetime value is a terrible metric.
In every business, however, especially in the thriving world of eCommerce: cashflow rules. You’ll die waiting for “lifetime” and also for “in a couple years”. You need to set a specific timeframe to your LTV, a cohort-specific LTV.
You need to be aware of the metric that gives you a measurable increase of the value of every customer in a certain time frame after they have purchased with you.
We call this our 60-Day LTV or also “cash multiplier”. This is our version of LTV that takes into account the latency of the monetization of an acquired customer and how quickly their value for your business is going to increase.
The goal?
At least a 30% increase in money-spent with your brand within 60 days and 100% within a year.
After you have identified your 60-Day LTV, you have successfully identified the increase of value for your average customer that checks out with your average order value.
By knowing this metric, you can structure your marketing campaigns a lot better & plan your demand forecast a lot more accurately.
However, there’s no customer that purchases a product for $65,34 in your store.
The reason?
Because you don’t have any products at this price. Every AOV is a conglomerate of all your orders. There are customers that have purchased a $40 product with you, and customers that have purchased a $90 product with you, and every single customer has a different value to you and your business.
You should be aware of this and the different values that you can assign to each customer after they have purchased with you.
Your goal is to acquire customers today, whose future revenue will compound. Doing that requires to answer three questions:
All of those questions you can answer by analysing your LTV (life-time value) by SKU or better said by product-specific cohorts.
You might be saying right now: “What are you talking about? I just understand the jibish... “
So, let’s row back a little and let me explain it to you in plain english. Let’s use an example to visualize it better:
Imagine a skincare brand: they have three main products that drive their revenue:
Coming from an AOV-driven mindset you might argue that the third cohort (people buying the complete skincare kit) would be the most valuable for the skincare brand.
However, after more thorough research: the skincare brand identified that people that bought the anti-aging cream for only $19.99 increased about 65% in value over the next 60 days and an incredible 200% in value over the next year.
In the meanwhile: the other cohorts only increase about 20% in value in the next 60 days and 50% for the next year.
This research paired with the fact that it is a lot cheaper to acquire a customer for a $20 product than for a $60 product, leads to the fact that this cohort is a lot more profitable for this brand and they should completely lean into acquiring this cohort of customers through their marketing efforts.
This is the reason why this should be one of the top eCommerce analytics metrics that you should be aware of. Knowing your product performance and the associated value that comes with the customers of this product will not only help you to predict demand better, but also shift your marketing campaign onto a more profitable path.
Pro tip: Especially when it comes to bottom line profit, you need to be aware of two things when it comes to your SKU analysis: SKUs are likewise the key to increasing your (1) LTV percentage and (2) monetary returns.
Increasing the value of your visitors and optimising your brand engagement as well as conversion rate.
The metrics that we are going to talk about in this section are all about making the most out of your traffic and leveraging already existing audiences...
The more customers your brand acquires the more expensive will be your customer acquisition cost. (CAC)
This is especially true for brands that get the lion’s share of their revenue from one traffic source like Facebook or Google Ads.
More people will be aware of your brand and you’ll have to break through completely new audiences that are more difficult and therefore more expensive to convert.
So, how do you win the fight?
By increasing your revenue per visitor and optimizing the efficiency of your marketing channels. In order to achieve this you’ll need to pull apart your best and worst performing traffic channels: organic, direct, paid, social, SMS and email.
Smaller eCommerce brands can scale on the back of paid acquisition, however, the bigger you get the more you have to worry about your traffic diversification - reliance on paid acquisition becomes increasingly difficult.
There will come a moment where you have reached a threshold and the best way to reduce your CAC is not by reducing your CAC, but rather by diversifying your traffic sources.
This is something that a lot of business owners miss out on, and even the majority of media buyers & digital marketers don’t understand, your ad account & its performance is majorly influenced by your traffic diversification.
If you have a more organic traffic, your retargeting traffic is automatically going to perform way better, more people will get your prospecting creatives and your overall paid acquisition will tend to perform a lot better.
For more mature brands you should always aim to not rely on one traffic source and that you have a well diversified traffic pie.
Talking about understanding your traffic channels and your holistic customer journey, one important metric that is not really volatile however, that we always analyse before running any campaign is lag time.
You can find this metric within your Google Analytics Account. Select your “Conversions” report, select “Multi-Funnel Channels” and click on “Time Lag”
This report will show you how long it took for the majority of your costumes to actually purchase with you after they have visited your website for the first time.
Based on this graph you can then focus and increase your remarketing efforts on visitors in this timeframe, since they are statistically speaking a lot more likely to convert with you then.
The time lag for this particular brand is nine days. Meaning if a visitor ends up purchasing, about 90% do this within the first nine day after they have visited the website.
Therefore, I would focus on the remarketing efforts in this timeframe and also increase the bids to increase the overall visibility.
At the top of our masterpiece we have our paid acquisition, from Google Ads to Facebook Ads, you can have a lot of different paid acquisition channels. However, since VictoryMedia solely focuses on Facebook’s advertising platform, we are going to focus on that primarily.
There are numerous factors that influence the performance of your Facebook Ads: creative, campaign structure, CPMs and conversion rates as well as external factors like COVID or iOS 14.
However, let’s focus on the metrics that we have seen are worth keeping an eye on…
CAC measures the total cost for your business to acquire a customer. Companies often rely on this metric to determine their profitability, the success of their marketing efforts and how much room they still have to push their marketing budgets.
You can use CAC as the inverse of your ROAS.
However, one metric that I find to be a lot more interesting and important to know, especially to evaluate your growth and marketing efforts, is a slight variation of the traditional CAC and that is new customer CAC (or “weighted CAC”). Surprisingly, this metric does not exist within Facebook and you can also not find this in any native eCommerce dashboard.
So, in order to get to this metric you need to pull your new customers report from Shopify or your particular shop system and divide it by your total ad spend: total ad spend / new customers.
Pssst... I've inserted the link to the complete creative optimisation guide here.
The most important advertising element in your campaign is the creative. However, how do you evaluate your creative performance?
Let’s take a look at the metrics important to drive creative performance...
People often tend to default to CPC, ROAS or CPM, although if you genuinely understand Facebook’s auction system, those metrics have nothing to do with the long-term success of your creative - those are the results, but not the actual reasons.
The reason why a creative performs well is because it does a great job at grabbing the attention of a prospect and converting this attention into a desire to know more about the product or service which ultimately leads to a purchase.
Therefore, you need to move away from trying to analyse your end results and take the conversation to the consumer behavior level, to properly understand your creative’s performance and how to improve it.
This is when we introduced the adjusted AIDA model to all our accounts. This framework is based on the AIDA principle that was introduced in 1898 by Elias Elmo Lewis which states that in order to have a successful and converting ad you need to make sure that the ad leads the prospect through the following stages:
We have taken this principle and asked ourselves what metrics can we pull from the Facebook Ads Manager dashboard that reflect those different stages. This is what we ended up with:
Those translated metrics give you the ability to evaluate your creative from four different angles:
It also gives you the opportunity to move away from the vague and subjective statement: “This creative is good” or “This creative is bad, let’s move on” and move you into a more objective and data-backed decision making process that will increase your overall creative performance based upon what your audience wants to see, not what you think your audience wants to see.
In case you want to know more about our adjusted AIDA principle and how we evaluate our creative’s performance, then we have a complete blog article on this which you can check out Here.
While supply and demand as well as external factors like COVID dictate the cost to advertise, a symbiotic relationship reigns between CPM, CPC, and CTR. They are interdependent, as soon as you have influenced one of those metrics, you’ll inevitably change the other one as well.
The former you can’t control (at least not much), however the latter is definitely in your hands and can be pushed into every direction from you.
Let’s take a look at a couple of examples, for you to better understand this principle of interdependent metrics:
Let’s take a look at those metrics from a beauty brand over the last three quarters:
First quarter:
Second quarter:
Third quarter:
What should you take out of this?
By influencing one of the metrics, you are able to influence the other ones.
So, If your ads ‘aren’t working’ and you’re blaming CPMs, you’re focusing on the part of the problem you can control the least.
Make sure to focus on the part that you can control which is CTR. CTR can be controlled and improved by improving your creative and at this moment you can then fall back upon our AIDA principle.
Those metrics can be pulled from different platforms and sometimes you have to pull two data sources from two different to arrive at the final metric that gives you a clear understanding.
However, the OG in the game is and has always been Google Analytics and what kind of an analytics blog article would this be if we didn’t at least grasped the importance of Google Analytics and how to get the most out of this tool…
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