GLOSSARY OF TERMS

What are KPIs?

GLOSSARY OF TERMS

What are KPIs? GLOSSARY OF TERMS

Key Performance Indicator or key performance indicators is a set of tools that can be used to determine the effectiveness of an advertising campaign, business processes, the effectiveness of goals (for example, cost per lead or customer lifetime value).

To draw up the correct KPI, you must adhere to the following rules:

  • Each of the indicators must be measurable and achievable;
  • Compliance of KPIs with the general goals of the company;
  • Reflection of changes for a certain period.

To assess the effectiveness of advertising channels, the key metrics CPS (cost per sale) and ROAS (return on investment in advertising) are most often used.

The first is determined by dividing the total company value by the number of post-click sales. ROAS helps you find out how much profit was made from every dollar that was invested in an ad campaign.

The following KPIs are also used: conversion rate (displays the number of visitors who made a purchase) or the cost of attracting a customer (the amount spent on attracting one user). Email marketing uses an indicator of the percentage of message openings, the ratio of the number of its openings and clicks on the link in it, and others.

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