What Are Marketing Metrics?

Marketing metrics are statistical measurements by which companies judge the effectiveness of their individual marketing efforts. These metrics vary depending upon the size and type of marketing campaign initiated and the goals of the company for the specific campaign. In terms of financial information, marketing metrics focus on the return on investment of campaigns by comparing their cost to the amount of business that they return. Other metrics focus on how well a campaign creates awareness of a company and its brand, how many new customers were attracted, and how many old customers were retained.

Companies spend large amounts of their budgets on marketing efforts because they understand that a business can only be effective if people are aware of the products and services they offer. Since so much time and money is spent on these marketing campaigns, inefficiency in these efforts can be crippling to a company's fortunes. As a result, companies generally have to create standards to judge the effectiveness of marketing strategies. Marketing metrics are one way to accomplish this task.

Most marketing metrics are designed with the specific goals in mind for each particular campaign. For example, imagine a car company desires a boost of 25 percent sales on a certain model and initiates a new advertising campaign to achieve these results. At the end of the time period allotted for this campaign, the company can simply look at sales figures and see if the target goal was reached.

A financial approach to marketing metrics might focus on the return on investment of a specific campaign. Return on investment is calculated by taking the total revenue generated by a specific campaign and then subtracting its total cost of implementation. This amount is then divided by the campaign's cost to get a percentage figure. For example, a marketing initiative that generates a net of $100 US Dollars (USD) in revenue after costing $1,000 USD to implement would represent a return on investment of 0.10, or 10 percent.

There are other marketing metrics that can be devised to study the effectiveness of marketing strategies. These metrics might be specific to the type of campaign instituted. As an example, an e-mail blast that asks for customer responses might be judged by how many responses are received. Such metrics often focus on the customer base of the company in question, both in terms of the new customers gained and the retention of previous customers.