As marketers, it’s crucial to understand marketing campaign performance metrics and how you can adjust your strategy along the way to improve the outcome.  When calculating ROI (return on investment), many marketers automatically start to measure KPI (key performance indicator) metrics in the first month of a campaign. While understanding ROI and KPI in digital marketing are essential, many marketers are guilty of gathering data too soon and cannot provide an accurate measurement of their ROI.  
A LinkedIn study shows that 63% of marketers don’t feel confident in their ROI measurements.  Avoid being part of this statistic by understanding the key differences between ROI and KPI and when to measure the performance metrics of your campaign.

What Are ROI and KPI in Digital Marketing?

Understanding KPI vs ROI is the key to becoming more confident in your marketing campaign performance metrics and decision-making processes. KPIs are the specific metric to measure the performance of the digital marketing campaign. They measure the progress of the campaign against defined goals. Common KPI examples can include cost per acquisition, sales qualified leads, return on ad spend, and total revenue.  

On the other hand, ROI measures the revenue growth and impact of the marketing campaign. It attributes profit and calculates the return on the marketing investment. This metric can justify marketing spending and give insight into budget allocation for future campaigns.  

Think of KPIs as a micro measurement that calculates how a campaign is doing along the way, whereas ROI is the big picture, the final result. KPI looks forward, and ROI looks back. KPI is crucial because it guides goals and helps you stay on track to reach the desired result.  

According to LinkedIn, 78% of digital marketers start measuring ROI within the first month of a campaign’s launch; thus, they aren’t getting a reliable representation of the performance metrics. Many business sales cycles take much longer, likely six months to a year. Marketers can use KPIs to drive success during their campaigns to ensure the best possible ROI. Instead of jumping too quickly to provide ROI reports to sales and finance teams, utilize KPI metrics to show how the campaign is currently performing. 

Avoid Measuring ROI Too Early

KPI metrics allow you to assess the short-term impact; however, they don’t give an accurate reading of the big picture. Evaluating key marketing metrics is extremely helpful in the initial stages of a campaign and can improve the final outcome.  

Digital marketers should regularly measure performance metrics to adjust as needed to improve the result. These metrics are a more forward-looking predictor, whereas ROI metrics mark a campaign’s conclusion and look back at the overall performance. 

The key takeaway is not to move too fast. We know that digital marketers are often under pressure from outside players to provide proof of performance to secure future budget asks, and because of that, they’ll measure ROI too early. Measure KPIs and let those metrics guide you to a better result. 

Need help using KPI and ROI metrics to drive growth? Contact the GROWL team and utilize performance metrics to calculate valuable and accurate information for your business’s marketing efforts. 

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