11 Digital Marketing Metrics for e-Commerce in 2021

Here we will talk about the main Digital Marketing Performance metrics for e-Commerce that really matter, and should be observed at least 1-2 times a week. We are considering that the campaigns are targeted to the user who is already at the "bottom of the funnel", i.e. the user has already had one or more contacts with your brand/product, and is considering buying.

The year 2020 brought many challenges to e-Commerce worldwide, and we had a sharp increase in businesses going digital with the goal of selling their products into what, for them, was a new sales channel, especially for businesses that had physical stores as their main conversion channel.

Having been working with e-Commerce since 1999, I see that it is common for companies to think that the only work needed to start selling online is 5 steps:

5 initial steps to start your e-Commerce

  • Choose the most cost-effective e-Commerce Platform for your niche;
  • Hire one or more logistics companies that perform deliveries in the market of operation, preferably with delivery monitoring integrated to the e-Commerce platform;
  • Choose the Payment Methods you will make available to the customer;
  • Register the products with photo, description and price;
  • Make some investment in Digital Marketing on Google and Social Media: "put some ads in there and let's wait for the orders to come in."

The day-to-day reality could not be more different.

The fact is that just like you, who may be getting into the online sales game, thousands and thousands of companies are also doing it or have done it long before.

You are now competing not only with other companies in your area, depending on the flow of people you can capture for an eventual purchase. The competition now is with all the geographic space in which you can deliver your product. And if we are talking about a Portuguese company, at the very least you should think about serving Portugal and Spain if you really want to be profitable in online sales and have a sustainable business in the long term.

Digital Marketing Performance Metrics for e-Commerce
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Key KPIs for e-Commerce

Knowing and understanding the key numbers(KPIs - key performance indicator) for an e-Commerce to succeed in 2021 is preponderant to stand out in the market, and here we will try to help in a didactic way with these Digital Performance Marketing metrics for e-Commerce, considering that we are investing in Google ads and Social Media:

  • Impressions: how many times your ad was displayed according to the keywords (keywords in Google or Bing Search) or targeting chosen (Google Display and YouTube, Facebook, Instagram etc).
  • Clicks: how many times your ad was clicked on.
  • CTR: percentage between the amount of clicks divided by the amount of times your ad was shown, e.g. (1,000 views/50 clicks) = 5% CTR.
  • Average CPC: average cost per click of your ad in the period, e.g. if your ad had 500 clicks in a period of 7 days and was invested $100 (100/500), the average CPC of the period is $0.20.
  • Average CPM: average cost in the period for each thousand times that your ad was displayed, ex: your ad had 10,000 displays in 7 days and you invested $ 100 (100/10), you had the average CPM of $ 10. Note that the division is by 10 and not 10,000, because the CPM considers the amount invested per 1,000 ad views. Another detail is that the same user can see your ad in the period more than once.
  • CPA: cost per acquisition/conversion, that is, how much you had to invest in the ad to make a sale, e.g.: considering the same $100 invested and 5 sales made in the period, we have 100/5 0 $20 of CPA, or cost per sale.
  • ROAS: returned on the investment in advertising, ie, is the amount of sales divided by the investment, ex: if it was invested € 1,000 and this returned in sales € 2,500, we have 2,500/1,000. Your ROAS in this example would be 2.5.
  • ROI: ROI takes into account all costs, not only the investment in ads. Here we have to consider the cost of production or purchase for resale of your product, expenses such as water, energy, rent, employees, etc. It is a more complex calculation because we have to know precisely what is the total cost we have with each product, however, with this precise value, we can know exactly the profit we are having from investment in Digital Marketing.

So I just need to figure out those metrics and that's it?

Not quite, but before we talk about other important metrics, in this article we will still explain the best practices to make these metrics the best they can be.

And if you have come this far, you might like to learn more about Contextual Marketing in another article available on our Blog.

First you need to know that each ad platform will show you different results. I will explain.

Imagine you are investing $1,000/month in Google Search and $1,000/month in Facebook/Instagram ads.

Comparing Google Search's 10% CTR to Facebook/Instagram's 5% CTR is like comparing apples to grapes. The platforms are different, depending on each market, each niche, these numbers can also vary. And user behavior on each of these ad platforms is different.

People who are searching for something on Google and find your ad are more likely to click than those who are scrolling through their Facebook feed and come across your ad. These are different moments of the user and possible client, and realizing that the platforms complement each other (and in what way) will make all the difference in improving results in the medium/long term.

Analyzing numbers only as data will not bring you great insights either. It is necessary to transform the isolated data into useful information, relate it to the objective of the ad, the chosen target, and then begin to draw the first insights to improve the performance of your digital marketing campaigns.

Let's explore the above example further and imagine that the average CPC in Google Search was $0.50, we will have 2,000 clicks on the ad with $1,000 of investment. Since the CTR was 10%, we can assume that the ad was displayed 20,000 times to people searching on Google.

For ease of account and comparison, let's assume that the average CPC on Facebook was also $0.50, meaning you also got 2,000 clicks with the $1,000 invested. However, since the CTR was 5%, we assume here that the ad was shown 40,000 times to people browsing Facebook and Instagram.

If 5% of the people who clicked on the ads coming from Facebook or Instagram make a purchase on your e-Commerce, we will have 100 sales coming from the ads for these two social networks.

If only 2.5% of the people who clicked on the Google Search ad made a purchase, we will have 50 sales for the same $1,000 invested.

"Man, you can see right away that it's much better to invest everything in Facebook and Instagram than in Google Search."

KPI Analysis for e-Commerce in 2021
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Well, I wouldn't say that, and I'll explain why:

  • I don't know what the ATP (average ticket price), or average purchase value is of the customers who came through Google Search ads, any more than I know of those who came through Facebook and Instagram ads;
  • I also don't know what the LTV (life time value), or average total purchase value of customers over a period of time who came from each ad platform, e.g. customers who came from Google Search ads may make an average purchase 3 times a year, and those coming from Facebook and Instagram may buy on average only 1 time a year. I ask: which customer is going to be valuable to my e-Commerce?

"This is getting too complicated... ?"

"Meanwhile you still haven't explained how to improve those numbers... ?"

Some tips to improve your Digital Marketing for online sales

  • Have a clear and objective value proposition concerning what you are promoting on Digital Marketing advertising platforms. Don't annoy your potential customer with false or even vague promises. It is increasingly difficult to attract the user's attention, and to get him to click on your ad, not to mention.
  • The Landing Page (first page that the customer will see after clicking on your ad) has to be 100% consistent with the promise/offer contained in your ad. Otherwise you'll be throwing money in the trash can and undermining all the planning you've done. And you may even be penalized by the ad platforms.
  • The loading time of your site has to be brutal. Be obsessed with it. Every extra second your site takes to load is proportionally reducing your CR (conversion rate), i.e. the percentage of people who click on your ad and make a purchase.

Do you have any questions? Feel free to put it in the comment below. I'll be happy to answer them all.


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