How To Get Started Measuring Online Marketing ROI

David Hehenberger November 12, 2013

measure-marketing-effectivenessOne of the biggest advantages of online marketing compared to traditional marketing is that it is very easy to measure which of your marketing, advertising or business initiatives work and which ones don’t. Unfortunately, too many businesses don’t fully take advantage of this.

To make smart business decision you need data. While the vast majority of businesses use Analytics software (usually Google Analytics) to record data, most of them are doing it wrong (and it’s driving me crazy!):

These businesses, if they even look at their data at all, look at the wrong metrics. This might be excusable if you’re a travel blogger, but not if you are running a “real business”.

How To Track The Right Metrics

There’s no point in measuring if you’re looking at the wrong metrics. You can differentiate between two types of metrics:

1. Vanity Metrics

Vanity metrics are metrics that make you feel good without providing any actionable insights. Examples:

2. Actionable Metrics

Unlike vanity metrics, actionable metrics help you make smarter business and marketing decisions.

Actionable metrics help you answer questions such as:

Examples of actionable metrics:

Now that you understand actionable metrics, it’s time to set up your Analytics properly.

How To Get Started Measuring Your Marketing Success In 3 Easy Steps

Step 1: Install an Analytics package.

I recommend Google Analytics (GA). Most other analytics tools are inferior (or very specialized and expensive, e.g. focusing on SaaS businesses).

Sign up for free here. Choose Universal Analytics.

Installing GA is easy. If you’re on WordPress, use Google Analytics for WordPress by Yoast.

Step 2: Start tracking Conversions

The next step is to set up conversion tracking.

What most people don’t realize is that an Analytics account without conversion tracking is almost entirely useless. You need conversion data to draw conclusions from your Analytics.

How to set up Google Analytics conversion tracking:

Step 3: Learn From Your Data

After implementing step 2, wait a couple of weeks, then check out some reports.

Google Analytics differentiates between four types of standard reports:


Below are some sample reports that may be useful. I highly encourage you to explore most reports that Google Analytics generates. Note: beneath reports will look slightly different if you’re running a lead generation site instead of an ecommerce site.

1. Audiences Reports

This section helps you learn more about your visitors and customers.

Sample report: “Which language are my customers speaking?”

Once you’re logged into your Google Analytics account, in the left hand column beneath “Standard Reports”, go to Audience -> Geo -> Language.

Here’s what this report might look like (note I had to blur out some details). It breaks down your traffic and conversions by language. Language_-_Google_Analytics-6

2. Acquisition Reports

This area is for traffic reporting. There are a lot of really useful reports here.

Sample Report: How Do My Customers Find Me?

Go to Acquisition -> Overview.

This report gives you a great overview of your best traffic sources in terms of visitors (vanity metric) and conversions (actionable metric). Here’s what the newly introduced “Acquisition Overview” looks like:


3. Behavior Reports

This section helps you understand what your visitors and customers are doing on your site.

Sample Report: Which pages on my site drive the most sales/conversions?

Go to Behavior -> Site Content -> All Pages

This report gives you details on user behavior on all of your pages. The “Page Value” column (=The average transaction or goal value of this page) is particularly useful.


4. Conversion Reports

This area helps you learn more about your conversions.

Sample Report: Time to Purchase

Go to Conversions -> Ecommerce -> Time to Purchase.

Find out how long it takes your customers from finding your site to purchasing.



Setting up conversion tracking in your Analytics package will help you make better business decisions.

Not tracking conversions is one of the biggest online marketing mistake I see people make. Do it. It only takes a few minutes.


What about you? Are you tracking conversions on your site? If so, has tracking conversions lead to any insights that helped you improve your business?

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