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Home > Blog > Digital Marketing > PPC >

Metrics vs. KPIs: What are the main difference?

Metrics vs. KPIs are two distinct concepts. Both these concepts play a vital role in digital marketing. Metrics are the values that are used to measure the progress or success of marketing campaigns. While KPIs are the parameters that evaluate, analyze and measure the performance of an individual or a business.

Metrics vs KPI

In the digital marketing world, it is important to understand the difference between metrics and KPIs. Metrics tell a story about how well your digital campaigns are doing. They do this by looking at your website or social media site data. KPIs help you decide on what to do in the future to improve your business based on goals.

It’s true that metrics vs KPIs are different things. But they are both crucial in evaluating the success of your PPC campaigns. Find out in this blog article which KPIs vs metrics you should consider and how to measure them!

In this guide, we’ll cover the following:

  • What is KPI?
  • What are metrics?
  • What is the purpose of a KPI?
  • What is the purpose of metrics?
  • When to use KPIs?
  • When to use metrics?
  • What’s an example of a KPI?
  • What are examples of metrics?
  • What’s the difference between Metrics vs. KPIs?
  • Which objectives you should focus on when using KPIs for PPC Campaigns?
  • Why are metrics important for PPC and when to use them?
  • Wrap Up
ppc-signal-optimization-tool

What is KPI?

To fully understand what Metrics vs. KPIs are let us first have a look at KPIs.

Key performance indicators (KPIs) are metrics used to measure a company’s overall performance over a period.

In particular, KPIs can be used to measure a company’s financial, operational, and strategic achievements. The companies do this by comparing their KPIs to those of other companies in its industry.

It is important to note that KPIs are not defined by a single metric or set of metrics. Instead, they typically comprise several key indicators that provide a broad picture of how well-performing your business is.

  • The KPIs measure the success of a company compared to what it aims to achieve. Also how it compares to its peers within its industry.
  • A KPI can be financial, such as net profit (or bottom line, gross profit margin), revenues minus certain expenses, or the current ratio (liquidity and cash flow).
  • In general, customer-focused KPIs focus on efficiency, satisfaction, and retention.
  • Monitoring and measuring operational performance across the organization is a key role for process-focused KPIs.
  • Business analytics software and reporting tools are used to measure and track KPIs.

Also called key success indicators (KSIs), KPIs can differ widely between companies and industries. This depends on the criteria used to determine success.

What are metrics?

Metrics are numbers or statistics that are used to measure the performance of an organization or individual. They are usually indicators that can be measured on a scale, such as sales, usage, profitability, and cost. Metrics are also used to track progress in improving organizational performance.

Metrics can be either operational or strategic in nature. Operational metrics measure the performance of an organization’s day-to-day operations like sales, production, quality, and cost. Strategic metrics are used to assess how well an organization is doing in terms of its business strategy.

Metrics are important because they provide a framework for managing a company’s resources and goals. This allows managers to make informed decisions about their organizations’ future growth.

Over the years, metrics have been used in accounting, operations, and performance analysis.

The use of metrics is often governed by industry standards and proprietary models. They also come in a wide range of forms.

The executive uses metrics to analyze the company’s financial and operational strategies. Analysts use them to make investment recommendations and form opinions. Portfolio managers use them to guide their investment decisions. They are also essential in leading and managing all kinds of strategic projects, according to project managers.

Metrics and KPIs are often considered synonymous in the business context. Even so, while they work in the same way, they are not used for the same reasons. Keep this in mind for later: all KPIs are metrics, but not all metrics are KPIs.

What is the purpose of a KPI?

The purpose of KPIs is to provide a picture of an organization’s current state and future goals. The KPIs then act as indicators of how the organization is performing against the defined goals.

KPIs can be used in several ways:

  • To measure progress towards goals, objectives, or strategy;
  • To monitor improving processes or outcomes; to determine if things are getting better at all;
  • To evaluate progress on specific projects or programs.

KPIs can be used in many aspects of an organization: operational, strategic, and financial.

Operational

KPIs focus on how well an organization is doing its job. Examples include the number of customers served, number of orders per day, number of sales calls per day, etc.

Strategic

KPIs focus on long-term goals, such as increasing market share or increasing revenue through new products or services. Examples include market share growth over the next three years, the number of new customers over the next three years, etc.

Financial

KPIs are often used as part of a financial dashboard that shows companies how they are performing against competitors. This is in terms of key metrics, such as revenue growth or profit margin.

What is the purpose of metrics?

Metrics are one of the most important components of any successful business. They are used to track and measure the success of a company’s products and services. They also help to identify opportunities for improvement.

Metrics can be used to measure virtually anything: customer satisfaction, sales revenue, employee productivity, and much more. Metrics are important because they provide a way to gain insight into trends in your business so you can make informed decisions about how you run it.

Metrics can be used for many purposes, including:

  • Measuring how well your product or service is performing
  • To identify problems before they become major issues
  • To understand how customers interact with your products and services
  • To track the effectiveness of marketing campaigns.

When to use KPIs?

KPIs can be used in the following instances:

Reducing risk

You can use a KPI to identify risks in your project. For example, if your project has an 80 percent chance of being successful. But a certain percentage of it is failing. You can use this to determine whether something is wrong with your approach or if something is wrong with the product itself.

Measuring progress

You can measure the progress of your project based on how well you are meeting your KPIs. If one of your KPIs is “time taken,” and you’re spending more time than expected on a task. Then that means you’re behind schedule and need to adjust accordingly.

Learning from past performance

When you measure KPIs over time, you will see trends emerge. This will help you predict future events and make informed decisions about how to improve performance going forward.

When to use metrics?

There are many times when you should be using metrics. If you’re a startup, this is a good place to start. This is because it gives you an understanding of how your users interact with your product. This in turn can help improve it.

If you’re working on an existing product and want to see if there’s anything that can be done better or differently. Then metrics are a great tool to use.

If you’re building something new and want to understand what people like about what you’ve built so far. Metrics can also help on that front by gauging customer satisfaction.

 ppc audit report bottom

What’s an example of a KPI?

A KPI is a metric used to evaluate the success of an organization or individual in meeting predetermined goals. KPIs can be financial, such as net profit or revenues. They can also be non-financial, such as customer satisfaction levels or employee retention rates.

Different organizations will have different KPIs based on their unique goals and objectives. Some common examples include measures like revenue growth, profitability, customer acquisition satisfaction rates, or web traffic levels.

What are examples of metrics?

Metrics are ways of measuring something. In business, metrics are often used to measure things like productivity, sales, or customer satisfaction. For example, a company might track the number of sales made in a week, or the number of customer complaints received. By tracking these metrics, businesses can see where they need to improve.

What’s the difference between Metrics vs. KPIs?

Metrics measure how well your business is performing in different areas. KPIs, on the other hand, measure a metric’s performance in relation to your company’s overall goals.

You use metrics to measure the impact of your day-to-day work in a particular area of your organization. Email marketers, for example, will measure open rates. This metric, however, may not be a key performance indicator.

With KPIs, you are looking for some movement or action, which is what you want to happen with the metric. (Usually an increase or decrease). KPIs are what you need to achieve your business objectives in relation to your metrics. Metrics, on the other hand, are just measures of something.

KPIs Metrics
Indicate progress toward business objectives. Analyze specific processes and activities to measure their success.
Provide a broad view They provide a lower view
Their relevance crosses departments. They apply to specific departments or business units.
They are used to make strategic decisions. Are usually operational or tactical in nature.

Which objectives you should focus on when using KPIs for PPC Campaigns?

Here are four objectives you should follow when choosing KPIs. These objectives can be employed across a variety of industries and campaign objectives.

Make sure you understand the goals of the campaign

Conversions and CPA may seem like your ultimate goals, but these aren’t your only options. It may be relevant to monitor impression share (how often your ads are displayed) and click-through rates (CTR). Creating a search strategy that captures available search demand, for example, is key to increasing conversions.

Define what success means

To evaluate your success, you can use previous performance and market benchmarks, as well as your company’s or client’s definition of success.

Monitor your KPIs and re-evaluate your KPIs

You should carefully monitor your KPIs and reevaluate them if they still fit your goals or if anything has changed recently in your industry.

The following KPIs should be measured when you use PPC:

KPIs (key performance indicators) are important in PPC campaigns since they measure your campaign’s true success. It is important that they relate to your campaign goals and tell you what action you should take to meet them.

  • Quality Score
  • Average position
  • Click-through rate (CTR)
  • Conversion rate
  • Cost per click (CPC)
  • Cost per acquisition (CPA)
  • Return on ad spend (ROAS)

Why are metrics important for PPC and when to use them?

Marketing metrics are crucial because they offer insights to improve campaigns and help brands determine the success of campaigns. In this way, marketers can assess how their campaigns contribute to their business goals. Also, they can make informed decisions about how to optimize their campaigns and marketing channels.

A marketing team can use these insights to understand whether it has reached its goals of attracting new customers. Also, these insights help understand how they are generating awareness, engaging customers, raising sales, and generating leads. The analytics also contribute to a timely decision-making process, such as the ability to adjust campaigns in real time when campaigns don’t perform as planned.

Marketing metrics are the only means by which marketers can prove the impact marketing has on the organization. In addition to ongoing measurement and campaign planning, these insights can inform annual budgets and headcount.

By measuring the right marketing metrics, marketers can gauge consumer reactions to their campaigns and communications. This is where these metrics come into play. Using these insights, marketers can amp up the efforts that are most beneficial and switch the ones that aren’t.

Below we show that when you are using PPC, you should measure these metrics & KPIs:

  • Clicks
  • Click-Through Rate
  • Quality Score
  • Cost Per Click
  • Average Cost per click
  • Cost Per Acquisition (CPA)
  • Conversion Rate
  • Impression Share
  • Average Position
  • Budget Attainment
  • Customer Lifetime Value (CLV)
  • Return on Ad Spend (ROAS)
  • Bounce Rate
  • Cost Per Mille / Cost per thousand of impressions (CPM)
  • Average Order Value
  • Ad Cost to Sale
  • Cost Per Lead (CPL)
  • Average Page Views per Visit
  • Average Cost per Page View
  • Top Landing Pages
  • Customer Retention Rate
  • Low impression share
  • View-Through or Assisted Conversions
  • Keyword Performance
  • Ads and Campaigns Performance

You now understand that not all metrics are KPIs, but all KPIs are metrics.

Having read the above discussion, you realize that KPIs and metrics are important for your campaigns. And now you understand the difference between them. So you need to continuously monitor your campaigns. This is if you hope to get good results from campaigns with the help of Metrics vs. KPIs.

Keeping track of things isn’t easy. You need an effective marketing tool. This is where PPC Signal comes in. With the help of this tool, you can monitor your campaigns from every angle and identify any anomalies efficiently. This is because it works based on Data-Driven artificial intelligence (AI) techniques.

Here is the screenshot of the PPC Signal dashboard:

The above image demonstrates how this tool provides information about signals in a campaign. It also allows you to filter these data on several important levels, including

  • Keywords
  • Ad Groups
  • Device Type
  • Geo
  • Metrics
  • and more

You can therefore track your campaign’s KPIs and relevant metrics by using the metrics filter in PPC Signal. This is how you do it in the following sections.

The screen displays all related signals when you select any particular metric.

As an example, let’s say you want to monitor your campaign based on conversion, so you choose the conversion filter as follows:

In the following section, we discuss one of the most informative signals relating to the anomaly detected between Cost per Conversion and Conversions:

When you receive such information in a timely manner, you can save both time and money and take action accordingly. The below signal can be explored by clicking the explore button if you would like to learn more. You will see a graphical representation of the above signal after clicking:

FAQs:

Are Metrics vs. KPIs the same?

No, and you shouldn’t confuse Metrics vs. KPIs. A KPI is a measure of a company’s performance. It can be used to gauge the success of marketing campaigns or other business initiatives over time. A metric, on the other hand, is a data point that can be easily quantified by comparing it against other data points in order to determine how it changes over time.

Do metrics replace KPIs?

Metrics are not a replacement for KPIs. They are a means of measuring performance against the overall goal of your business. Metrics help you understand where you stand and what needs to change to move closer to the desired result. KPIs are used to measure specific targets against your business objectives. They provide key decision-makers with guidance on how to achieve those targets. So basically Metrics vs. KPIs complement each other.

Can you have both KPIs and metrics?

Yes, you can have both metrics and KPIs. KPIs are the measurements of what you are trying to measure in your business. Metrics are how you measure your KPIs. Metrics should be about the measurement of the KPIs, not about how you are measuring them.

Wrap Up:

PPC is all about reaching the right audience and delivering a relevant ad that will compel action. KPIs measure the actual success of your PPC campaigns and are key performance indicators within the PPC world. The actions you need to take to achieve your campaign goals should be based on your objectives.

There are several ways to measure PPC Metrics vs. KPIs, but each one is useful in its own way. They’re all important for understanding the performance of your PPC ads, and as you continue to test and solicit feedback from your clients. That information becomes even more valuable.

Ultimately, it’s important to remember that every campaign is different and will require a unique approach to measuring success. PPC Signal is one of the best tools to track campaign KPIs and metrics and yield results but you should keep in mind all KPIs are metrics, but not all metrics are KPIs

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