Anyone who is working in marketing sooner or later will face KPI, and they will have to figure out how it works.
Mobile marketing had already won all the marbles in digital marketing. As you know, in November 2018 eMarketer predicted that digital ad spending will rise to $327,28 billion during this year. And mobile ad spending will get $232,34 billion of all spendings.
There are many obvious reasons why the mobile industry flourishes and will continue to do it. It is due to high mobile phone internet adoption, convenient use wherever a person could be, portability, etc. eMarketer specialists also forecast that in 2020 mobile ad will receive over 50% of ad dollars. Adweek continues the idea of eMarketer that mobile customer engagement is the future of marketing, and app install is just a start for long-term cooperation with users.
While mobile performance marketing gives the power to many companies. Marketers have to constantly measure their efficiency to see how well their campaign is working and how close they are to reach business targets. Such a business requires constant monitoring.
When it comes to the task of app marketing, there is no shortage of statistics with performance indicators that will help to analyze your app marketing strategies (from advertising to organic or app store optimization).
Most of the marketers use special metrics they rely on to measure, however, these metrics do not always give the full picture of campaign performance. Moreover, every advertiser has his or her own goals for their campaigns. And it’s very important so the measurements fit their needs.
It all depends on the right metrics. That is why marketing specialists create or have a set of key performance indicators (KPIs) to measure ad campaign results. The indicators play a very important role for advertisers. They help to determine and explain how a company will progress to meet its business and marketing goals.
KPIs help to understand and correct the company’s business direction. Anyone who is working in marketing sooner or later will face KPI, and they will have to figure out how it works.
What is KPI?
Key Performance Indicator
it’s a value that measures the effectiveness of the company and how it achieves key business objectives. Businesses use KPIs for many reasons, some of them like the structure of indicators, others prefer to highlight key measurements for their ad campaigns.
There are high-level and low-level KPIs. High-level KPI focuses on overall business performance and low-level KPI takes account of sales, marketing, HR, support, etc.
According to Investopedia
, KPI metrics help marketers to determine company progress in achieving strategic and operational goals. There is another direction of KPI such as a key success indicator (KSI). This indicator is also important for specialists to measure the performance and success of the company or offer.
Such goals as a high number of leads per month and high rate of conversions can be a part of KPIs or KSIs for the business. Settings of indicators aid to focus on proper time management of the brand. Every industry has to define which KPI type suits better, to be successful during the promotion because each of them has a different purpose for different circumstances.
Every manager picks indicator depending on the intentions, needs, and planning of the company. One of the most used KPI types is the one that is tied to the financial and focuses on profit margins and revenue.
Specific KPIs related to revenue and retention are very useful. Depending on your monetization model, it tracks in-app purchases, subscriptions, signups, or ad revenue.
The whole amount covers a percentage of revenue. The gross profit margin is another profit-based KPI. It measures revenue after according for only those expenses directly associated with the production of goods for sale.
Process KPIs means the efficiency and productivity of your business process. For instance, when you count days to deliver an order or time to complete a customer order. This type is interested in the productivity of your ad campaign and how profitable it is for your users.
Qualitative KPI is a descriptive measure that makes an analysis of users general impressions, their opinions, and feedback. Together with qualitative, there is a Quantitative KPI that measures results in numbers like an average number of users or their ratio percentage.
5 KPI features
In order to have effective KPI, it must have certain characteristics features. Working KIP is:
One that has a high and relevant impact. It must be a good metric that has a solid impact and is relevant for your business.
Understandable and simple. Goog KPI has to be simple in understanding and be clear for every member of your team. It must be simple to use and divided into understandable segments.
Balanced. Your KPI must fulfill short-term and long-term needs for your business.
Well-timed. KPI must be measured in a timely manner (for instance, daily, weekly, monthly, etc.).
Non-financial. It shouldn't be financial or measured in any kind of currency.
KPI is a helping tool for marketers that enables them to measure the efficiency of their ad campaigns as far as possible. KPIs provide businesses with measurable and quantifiable results. It allows correcting strategies for reaching business goals and improve other business directions.
Ok, we’ve figured out what is this KPI and why it’s necessary for brands but what is the difference between metrics and KPIs?
Difference between metrics and KPIs
Metrics are also performance indicators that marketers use to understand what’s going on across each of the company segment and channel. KPI is also a special kind of metric, however not every metric can be a KPI.
Here are some examples of metrics for app marketing strategies:
Number of users who see your ad or post
Average session per user
In reverse, KPI stands for helping you to be decisive and prevent difficulties with analysis. KPI choose only the most important metrics that are useful for an app marketing plan, depending on campaign goals.
New user referral rate shows how many users does each of you acquired refer. The average revenue per users means revenue that takes into account income from ads, in-app purchases, subscriptions, paid downloads, etc.
The lifetime value of the user shows the percentage of referrals, and repeat purchases.
Customer acquisition cost determines how much do you pay for each new customer or user.
Churn rate is a measure of how many users stopped using your app after a while.
According to Jonathan L. Simon
, it’s OK to use several specific KPI models because it’s not enough to acquire users, you have to make them come back over and over again. If you want to data review with real numbers in real life, you have to work with different KPI systems to build a good business plan.
Jonathan L. Simon in the interview with Klipfolio
added that there are many KPIs in mobile marketing, however, he would highlight 4 most important:
CPI/CPA (cost per install and cost per acquisition) because it is your job to acquire users.
LTV (lifetime value) helps to create a positive ROI through leads acquisition.
DAU (daily active users) responds to making users come back to your app on a regular basis.
Revenue helps to use mobile marketing techniques to directly impact revenue.
In turn, a metric can measure a number of customers, a number of sales, or total revenue. But only KPI adds a context. Metrics morph into KPIs when you put them in the context of a particular company. KPIs show broader information about company performance.
Goals that help to focus on right KPIs for marketers
The understanding of which KPIs suits better for a particular mobile strategy starts with finding out your mobile goals. When you have clarity with the goals of your mobile marketing strategy, you will find KPIs needed to your ad campaign.
For instance, if your goal is to acquire new users for your mobile app, you will focus on your CPA or CPI indicators. Or, if you want to increase brand awareness through mobile, then CPM and other indicators of mobile ad impressions come first in importance.
Mobile marketers have to be influencers for the app audience. If the app is great the user will come, you need to make an effort so the users know about your product or service. The goal is not always to get users to your app.
The goal is to find users that will love your brand
, use it every day, be your advocates and offer helpful feedback, etc. Read more about how to make your users work together with you here
When choosing KPI advertiser or marketer should start with factor consideration that is used in managing. After, you should make sure that KPIs that were selected are clear enough for people who will read the reports. Remember, simplicity is a part of success.