What is a KPI in marketing

A good KPI should guide decisions, not create confusion. For example, using a KPI like "What percentage of searches did our brand capture this quarter?" through Share of Search provides a clear answer.

Share of Search is a valuable metric because it correlates with revenue, sales, and market share. It enables you to quickly assess whether your marketing budget is delivering real business results and if your brand is gaining momentum in the market.

“Always relevant - Share of search can be an early indicator for big changes. I just stumbled across this analysis of Nike's performance. Maybe a little late to the Bash Nike Party but the signs were there if you were looking at search."

/Anton Waern, Consumer Insights H&M

Not all metrics are equally important, and understanding the hierarchy of data is essential.

There are several types of metrics to consider:

1. Leadership Metrics

These are high-level metrics that give executives insight into overall company performance and strategic direction.

Examples:

• Revenue

• Emploeyee satisfaction:

2. Financial Metrics

These metrics are focused on profitability, cost efficiency, and capital allocation, often used by finance teams to assess the financial health of the company.

Examples:

• Capital Efficiency: A measure of how effectively a company uses its financial resources to generate profits.

• Net Profit Margin: The percentage of revenue that remains as profit after all expenses are deducted.

3. Operational Metrics

These are day-to-day metrics used by perations teams to measure the effectiveness of specific tactics and initiatives.

Examples for marketing teams:

• Click-Through Rate (CTR): Measures the percentage of users who clicked on an ad or link.

• Conversion Rate: The percentage of users who take a desired action, such as making a purchase or signing up for a newsletter.

Aligning Metrics Across Teams

The challenge is aligning these metrics across leadership, finance, and operations to ensure a unified view of the company’s performance. Without alignment, there’s a risk of misunderstandings. Financial metrics, often used as KPIs by most of the company, are crucial in marketing because they provide insights everyone can relate to and link directly to business outcomes.

Metrics like click-through rates may be useful for operational teams but are not as effective in providing a strategic overview of marketing investments.

Share of Search a Leading business KPI - Know demand

This is where Share of Search becomes a strategic KPI for marketing. It offers a clear narrative about how investments are performing, how your brand is doing versus competitors, and whether it’s generating a lift in search activity. Share of Search also correlates with key business objectives, such as market share growth and increased revenue.

For example:

• How much does our search share need to grow to increase our market share?

• Research indicates that roughly a 10% increase in Share of Search can result in a 0.7% gain in market share.

Can Share of Search be used for campaign measurement?

Absolutely. If Share of Search is rising, it’s a strong indicator that the campaign is resonating with the audience. If not, the investment may be insufficient, the creative may lack impact, or competitors may be gaining more traction.

By Rodrigo Pozo Graviz, Co-founder and CEO MyTelescope