How to Measure the Performance of a Digital Marketing Agency

You hired adigital marketing agency, the invoices arrive each month and the reports keep coming. But how do you know if things are actually working? Many business owners feel uneasy at this point. The reports look busy, but they aren't sure what to conclude.

Measuring an agency's performance doesn't need to be complicated. It comes down to agreeing on the right goals, tracking a few meaningful numbers and reviewing them regularly and honestly. This guide shows how, in simple steps. AtNFlow, we encourage clients to hold us accountable this way.

Start With Clear Goals Before the Work Begins

You can't judge performance without knowing what success looks like. Before or right at the start of the engagement, agree on goals that connect to your business, such as:

• Increase qualified leads by a certain number per month.
• Reduce cost per lead to a set level.
• Grow online sales or bookings.
• Improve rankings for a defined list of key searches.
• Raise conversion rate on your main landing pages.

Write them down. Make them specific and measurable, with a timeframe. And be realistic. If your goals depend on things outside the agency's control, like product pricing or sales follow-up, be clear about that.

Record Your Baseline

Note where you stand today: traffic, leads, sales, rankings, cost per lead and conversion rates. Without a starting point, any improvement is hard to prove. Ask the agency to include a baseline in the first report.

Measure Business Results First

The most important numbers are the ones that touch your bank account:

• Leads: How many inquiries, calls, forms or bookings.
• Qualified leads: How many were the right kind of customer.
• Sales or revenue from marketing: What those leads turned into.
• Cost per lead (CPL): Spend divided by leads.
• Customer acquisition cost (CAC): Total marketing cost divided by new customers.
• Return on ad spend (ROAS): Revenue from ads divided by ad cost.
• Return on investment (ROI): Profit gained compared with total marketing cost.

If an agency's report doesn't include leads and sales, or can't link its work to them, that's a concern.

For the math behind these numbers, readthe ROI of hiring a digital marketing agency.

Track Channel-Specific Metrics

Beyond business results, each channel has helpful supporting metrics.

SEO: Organic traffic, keyword rankings, impressions and clicks in Search Console, conversions from organic visits, and the number of pages ranking on the first page.

PPC: Click-through rate, cost per click, conversion rate, cost per conversion, quality scores and impression share.

Social media: Reach, engagement, follower growth, link clicks and leads from social.

Email: Open rate, click rate, unsubscribe rate and revenue per campaign.

Website: Conversion rate, bounce rate, page speed and mobile performance.

Local: Google Business Profile views, calls, direction requests and review count and rating.

These numbers explain why business results are moving, and they help you spot problems early.

To see how leads are produced, read how a digital marketing agency generates leads.

Beware of Vanity Metrics