KPIs for digital marketing: 17 Metrics for fast-scaling agencies

Spending your marketing budget without tracking the Key Performance Indicators (KPIs) that matter most for digital marketing agencies won't get you far. You might be moving forward (in theory and on paper), but are you actually headed in the right direction?

Too many marketers get entirely caught up in vanity metrics, instead of focusing on the numbers that reveal real campaign outcomes. So what's the difference? The difference between a marketing campaign (and agency for that matter) that rocks and delivers, and one that simply delivers without the results, usually comes down to one thing: using the right metrics.

And that's what this guide is going to give you. We'll walk you through the 17 KPIs that matter most for scaling marketing agencies. We'll also tell you how to pick the right KPIs for your business (that are not entirely different from agency metrics you should track) , and tell you which ones are every marketing agency's "must-haves". 

These core, must-have digital marketing KPIs are the ones that will let you make data-driven decisions so you get the most out of every marketing dollar you spend!

What are digital marketing KPIs and why do they matter

In simple terms, KPIs for digital marketing are numbers that measure the performance, progress, and success of your marketing efforts.

They give marketing and campaign teams two things:

• A clear picture (in numbers) of the success of their deliverables (ads, copy, landing pages, etc)
• Hard historical data on campaign performance, so they can make changes and improve results

Unlike digital marketing vanity metrics (which might sound impressive but don't actually correlate to any business results), effective digital marketing KPIs and metrics connect the dots to:

Basically, they make the foundations for all your campaign arguments. Especially when you're making your case for how much your marketing efforts are worth (and when you need to get your CEO or clients to increase the budget on various digital marketing endeavors!)

Now tracking the right KPIs does more than just show the client and founder how fabulously well your campaign is doing. These metrics actually lead the way for big strategic decisions. They are the ultimate source and guide on which ad channels to focus on, how much to spend on different campaigns, and where to put your optimization efforts so they make the biggest impact.

Insight: Digital marketing KPIs are not just used and referred to by marketing teams. They are also used and referenced by the sales team. When both of these interdependent teams stay focused on the same goals and metrics, you end up with way better collaboration and results!

Core Digital Marketing KPIs Every Business Should Track

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) reveals how much it costs you to get a new customer.

It's one of the most important core marketing metrics, and it tells you how much of an investment is required to turn a browser into an actual paying customer.

The figure includes whatever you spend on:

• Advertising
• Sales team salaries and benefits
• Marketing
• Any other overhead expenses that go into getting a customer on board.

How to calculate your CAC

To calculate your CAC, use the formula:

CAC = Total sales & marketing costs / Number of new customers acquired

So you take all the cash you spent on sales and marketing for a set period (you might use the last quarter) and divide it by how many new customers you signed up during that same period.

For example, say you went all out and spent $10 000 on marketing campaigns and sales efforts last month, and picked up 50 new customers while doing it, your CAC calculation would look like this:

CAC = $10 000 / 50

CAC = $200

But how do you know what's a good CAC? It's all about finding the sweet spot, which depends on the market and the sales channel you're in.

B2B SaaS companies might have CAC ranges between $200 to over a grand (depending on how long it takes them to close a sale).

On the other hand, e-commerce businesses usually try to keep their acquisition costs much lower since the sales cycle is much shorter and purchases tend to be smaller.

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is an estimate of how much cash a customer is going to generate over the lifetime of their relationship with your brand or business.

This KPI makes you focus on the long-term revenue potential rather than just the value of a single transaction, which changes how you think about customer acquisition cost and retention strategies.

How to calculate CLV

To calculate your CLV use the formula:

CLV = Average purchase value x Purchase frequency x Customer lifespan

To work out your Customer Lifetime Value, you'll need to factor in average purchase price, how often they make a purchase, and how long they stick around.

The basic math of the formula is easy enough, but if you want to get really accurate, you need to factor in things like how well you keep customers on board, how often they'll churn, and any discounts you apply.

For example, let's say your agency's average client spends $2,000 per month, and on average (according to your historical records), each client stays with you for 24 months on a monthly retainer, your CLV calculation would look like this:

CLV = 2000 x 1 x 24

CLV = $48 000 over their lifetime

Getting your Customer Lifetime Value (CLV) metrics right is key to figuring out which business strategies to focus on. For example, boosting customer retention by just 5% might end up giving you a 25-95% boost in profits, so it might be more worth your while to dedicate your digital marketing efforts to customer retention than to new customer acquisition.

Tip: Another thing you can do is break down your Customer Lifetime Value by customer segment. This can help you decide where you should focus your marketing budget. If you've got customers who are going to generate a lot of cash for you in the long run, then you can afford to spend a bit more to hook them in the first place. But if they're not very profitable, then you need to find ways to acquire them that cost less.

Return on Investment (ROI) and Return on Ad Spend (ROAS)

ROI and ROAS are two digital marketing metrics that uncover how effective your maketing activities are.

Return on Investment (ROI) tells you how much revenue is coming in from all your marketing efforts versus how much it costs to put it out there in the first place. Marketers often use ROI figures to help justify why marketing budgets should be allocated to some campaigns and not to others.

How to calculate ROI

To calculate your ROI, use the formula:

ROI = Net profit / Total investment x 100

In general, marketing agencies should use ROI to get a grasp on the overall profitability and efficiency of their marketing investment.

Return on Ad Spend (ROAS) is another handy KPI that helps you understand the success of paid advertising campaigns. Unlike ROI, which looks at all your marketing spend as a whole, ROAS focuses solely on paid advertising, making it a super valuable metric to follow if you want to make the most of your targeted ad spending.

How to calculate ROAS

To calculate your ROAS, use the formula:

ROAS = Revenue from Ads / Ad spend

Digital marketing agencies use the ROAS to track and understand performance on a channel-level. For example, they might use it to compare Meta vs. Google ads.

Tip: It might be worth your while to break down ROAS by who you're advertising to, where you're advertising, and what kind of ad you're running. Getting granular insights like these can show you where you can make the most of your ad spend and which combos are really working, so you can scale the campaigns that are working!

Channel-Specific Digital Marketing KPIs

Search Engine Optimization (SEO) KPIs

Organic traffic is one of the most valuable metrics in digital marketing. It's the thing every brand, business, and client wants, but it's also the hardest thing to get. Part of the difficulty lies in the fact that it can take time for organic marketing efforts to show up in the form of actual figures!

Organic Search Engine Optimization (SEO) is when people find your or your client's site without you paying for it. And that's a big deal! If you can swing this, it means you've done a stellar job with your organic content strategy, and it probably means you've been doing a good job for some time now.

Now there are a number of things you need to stay on top of when monitoring your SEO KPIs. These include:

• Keyword rankings: These give you an idea of how visible your site is for the big keywords people are searching for in your niche. Tracking the keywords people use and associate with your product or service helps you see how you're doing and where you need to improve your content rankings.
• Domain Authority (DA) and Page Authority (PA): This is a good gauge of how much Google trusts your site (domain) or a particular page. The higher your DA and PA are, the more trusted the content on your site will be, and the more likely you are to get ranked higher in search engines.
• Bounce rate: This is the percentage of visitors who land on your website or page and decide very quickly that your page doesn't actually have what they were looking for. It basically says your content did not meet their intent. High bounce rates are a good sign that your content strategy and keywords need some work.
• Backlinks: These are direct links from other websites that link out to your website. Backlinks are absolute (I hate to say it, because it's a worn-out term, but it's the most fitting description) SEO game-changers. For agencies looking to build a brand's authority, credibility, and long-term organic visibility, nothing will get their organic SEO performing better than some good quality backlinks from reputable websites (DAs).

Social Media Marketing KPIs

Social media marketing KPIs come in many forms. Several of them can be seen as vanity metrics, but that's sort of the nature of the beast, isn't it?

Generally, the way we measure social media engagement is through vanity metrics such as:

• Likes (the post resonated with viewers)
• Comments (the viewer felt so strongly about it they took the time to leave a comment)
• Shares (the post made them think of someone who would be interested in it)-
• Saves (the post included content the viewer wants to look back at again)

All these metrics tell you how interactive your audience is with your content across a variety of platforms. When people are actively interacting with what we're posting, it means we've struck a chord, and that's exactly the kind of data that can help you identify what kinds of posts are really getting people talking.

Follower growth rate is also an important KPI to track. It tells you how well your brand is growing and whether your content strategy is working for your Ideal Customer Profile (ICP). However, a large following on its own does not reflect a successful marketing strategy. You also need to have those people actually engaging with what we're posting.

Social Share of Voice (SSoV) is another social media metric that shows you how much of the conversation your brand is actually having compared to your competitors in the industry. It's one of the most insightful brand performance and marketing effectiveness metrics for marketing teams that want to connect brand awareness to actual demand.

Insight: It's one thing to get social media traffic, but just because people follow and like you, it doesn't always mean they convert and turn into customers. If you want to maintain or increase your social media budget, you need to tie your social media efforts directly to the actual bottom line. Only when your social media campaigns translate into actual sales can you justify your social media spend!

Email Marketing KPIs

With email marketing KPIs, your starting point should always be the open rate. This is the percentage of people who actually open your emails. The industry benchmark averages for this metric are all over the place, depending on the industry sector, so tracking open rates alone won't be enough.

There are several other email marketing KPIs you should be monitoring.

Click-through rate (CTR): This is the percentage of people who actually click on any of the links in your email. It tells you if the content you're sending out is relevant and if your call-to-action is actually working.

Email bounce rate: This is the number of emails that don't get delivered at all, which can really hurt your sender reputation and harm the overall health of your email list, too. If your bounce rates are high, that usually means there's a problem with the quality of your email list.

Unsubscribe rate: This is the percentage of people who decide to opt out of getting your emails. While a certain number of people are always going to unsubscribe, it's when the numbers start spiking that it's a sign of a content issue or maybe even that you're sending too many emails.

Finally, there's the email signup rate. This is the metric that tells you whether your list-building efforts across all the different channels and touchpoints are actually working. It helps you optimise your lead magnets, landing pages, and signup forms so that you can build a more effective email list.

Paid Search and PPC KPIs

Paid search and Pay Per Click are an entire category of marketing KPIs that have dedicated teams tracking and monitoring their numbers to the smallest of details. If you don't keep on top of them, you can eat through a huge amount of ad spend quickly without delivering spectacular results.

Cost-per-click is the average price you're paying for each ad click in your paid search campaigns. This metric can fluctuate often and depending on the industry, competition for keywords, and how well your ad is working. Generally, paid ads teams monitor and tweak things as soon as they see something is not working in order to try and get the most bang for their buck.

Click-through rate in paid search is around 6.66% across the board. Keeping an eye on these numbers lets you compare how well your ads are doing compared to what others in your industry are managing.

Quality scores on platforms like Google Ads can affect where your ads get shown and what you pay per click. Generally, the higher your quality score, the better your ad is at grabbing people's attention, getting them to click, and keeping them on your site.

Advanced Marketing KPIs for Strategic Growth

Lead Quality and Pipeline Metrics

How will you know if your lead qualification process is getting the job done? By analysing your Marketing Qualified Leads (MQLs) and comparing them to the Sales Qualified Leads (SQLs) ratio.

This metric is a great way to discover if your marketing and sales teams are working in tune and as one. It basically uncovers how smooth the lead handover between the two departments is.

By tracking how your MQLs progress into SQLs, you can spot the trouble spots in your marketing funnel and fix the things that need improvement.

Pipeline velocity is another vital measure. It reveals how quickly your opportunities are moving through the sales funnel from initial contact to closed deal. It's a pretty handy marketing KPI for working out when you're likely to get paid and where your prospects are getting stuck, which lets you put some targeted effort into getting things moving.

Another important KPI here is Cost Per Lead (CPL). This is how much you're paying for each lead. The best practice benchmarks for this metric vary wildly across different channels. Some will give you high-quality leads at a bit of an eye-watering price, while others will give you a bigger volume at a lower cost. What's best for you will depend on whether you want quality or quantity, and how much you're willing to pay for it.

Customer Experience and Retention KPIs

How likely is someone to recommend your brand to their mates? Do you know? That's basically what Net Promoter Score (NPS) will tell you. It gives you a pretty good idea of how healthy your business is in the long term, and whether people are actually going to spread the good word about you and become your brand advocates!

Customer churn rate is still a super important metric. It tells you the percentage of customers you lose over a specific period of time. Basically, it helps you understand how good you are at retaining existing customers.

Brand sentiment is another KPI marketing agencies like to stay on top of by collating customer reviews social media mentions, and survey responses. It tells you how customers feel about your brand overall, and it can be a really useful metric because it can signal early warning signs if something is going wrong with your reputation before it actually starts to affect your business.

How to choose the right KPIs for your digital marketing business

Choosing the right digital marketing KPIs can be hard. It involves a healthy dose of strategic thinking and understanding what really matters to your clients and business right now. The key performance indicators that drive success for a SaaS startup that's looking to go gangbusters won't be the same as those that are crucial to an established marketing agency trying to expand.

So choosing the right KPIs for your digital marketing projects and campaigns will depend on your industry, your client, and the overall business context.

Using SMART Criteria for KPI Selection

However, if we were to give you some generic advice overall, the best digital marketing KPIs follow the SMART criteria:

• Specific

• Measurable

• Achievable

• Relevant

• Time-bound

Rather than having vague goals (like "boost website traffic"), make sure you have clear-cut, effective KPIs that are specific (like "boost organic traffic from search engines and LLMs by 35% in the next 6 months").

This kind of detail will make it a heck of a lot easier to track how you're doing and figure out when you need to change course to make sure you stay on track with your target. Plus, it means everyone on your team is 100% on the same page about what campaign success looks like!

Avoiding vanity metrics that don’t drive business

Lots of digital marketers get sucked into tracking numbers that sound great on paper but aren't necessarily helping the business grow. Things like social media followers, email lists that are going nowhere, and huge web visitor numbers can be pretty misleading if they don't translate into new customers or more revenue.

So the KPIs that actually matter are the ones that always tie in with business results.

Take a step back and ask yourself:

If this metric suddenly shoots up by 50%, will it actually make a difference to the bottom line, or to customer loyalty - all the things that really matter?

If, for some reason, you can't give a clear answer to that question, chances are you're probably getting bogged down tracking vanity metrics.

Step 1: Customize KPI selection by industry and business model

E-commerce companies typically focus on:

• Conversion rates
• Average order value
• Customer Lifetime Value (CLV)

SaaS businesses prioritize metrics like:

• Monthly Recurring Revenue (MRR)
• Churn rate
• Customer Acquisition Cost (CAC)

B2B companies with complex sales processes often emphasize:

• Lead Quality Scores (LQS)
• Sales Cycle Length (SCL)
• Marketing Qualified Leads (MQL)

Step 2: Align KPIs with business goals

The best way to figure out which KPIs actually matter is actually to start with your main goal and work backward.

Think of it like reverse-engineering your success – when you start from the finish line, the right metrics basically reveal themselves.

Let’s walk through an example so you can see exactly how it works.

Example: Scaling marketing agency

The business goal for this agency is to increase annual revenue by $1M (from $2M to $3M within 12 months) while maintaining a 35% profit margin.

The reverse engineering process would look like this:

1. Divide to get the quarterly target: $1M / 4 quarters = $250K in new revenue per quarter
2. Work out the average project value: $40K/year per client (typical for mid-sized agencies)
3. Number of new clients needed: $1M / $40K = 25 clients per year
4. Establish your proposal win rate: 35% (agency industry average is 30-40%)
5. How many proposals you need to send based on win rate: 25 / 0.35 = 72 per year (~30 p/m)
6. Establish your lead-to proposal conversion: 20% (agency industry average is 20-30%)
7. Required leads: 72 / 0.2 = 360 qualified leads per year (~30 per month)

The KPIs you might track which align to this set of business goals include:

• Client Acquisition Cost (CAC) - To make sure growth doesn't inflate marketing/sales costs
• Proposal Win Rate - Measures the effectiveness of pitching and positioning
• Average revenue per Client - To track whether new projects meet the $40K target
• Billable Utilization Rate - To make sure the team can handle 25 more clients without burning out (alternatively, you might need to hire more staff, which means higher overheads)
• Client retention rate - To protect the existing $2M base, so growth doesn't have to make up for lost clients
• Pipeline value vs. Target - To keep tabs on whether the sales pipeline supports $1M growth

To turn this idea into reality, jump onto ActiveCollab to map out your entire pipeline as a project with a budget and a specific time frame. Take your big goal of "increasing annual revenue by 1 million" and break it down into multiple milestones and smaller activities (tasks and subtasks) that span across different quarters, so you have a clear roadmap to follow all the way to the finish line!

ActiveCollab: Team alignment & campaign execution to meet KPIs

Marketing strategies work best when everyone is on the same page, and that's exactly what ActiveCollab does. The platform is a marketing agency's complete ecosystem. It lets you create campaigns and projects, set budgets, assign and manage tasks and resources, and track the progress and health of each campaign in real time through dashboards.

By combining project management, budgeting, and time tracking into one tool, the platform helps you align your marketing KPIs and match them up with the daily tasks that need to be executed. When you can see which campaign tasks led you to deliver a rocking ROAS or email click-through rate, you can repeat and keep delivering great results.

From trying to get your brand noticed to running campaigns that are actually going to get some real results, ActiveCollab lets you focus on what really matters: hitting your targets, staying profitable, and building genuine momentum for your clients.

It's not just a project management tool – it's a complete marketing agency management system done the right way.

Staying in control and on top of your KPIs shouldn't take away valuable client work time from your working day. It should be an easy and quick check-in, and with ActiveCollab, that's exactly what it will be! 

Sign up to ActiveCollab's 14-day free trial or book a demo with one of our people to see how the platform can help you find your