KPI (Key Performance Indicator)
A measurable value that demonstrates how effectively a business is achieving its key objectives.
Full definition
A Key Performance Indicator (KPI) is a specific, measurable metric used to evaluate progress toward a defined goal. Good KPIs are: Specific (not vague), Measurable (quantifiable), Achievable (realistic), Relevant (tied to business outcomes), and Time-bound (assessed over a defined period) — the SMART framework. Marketing KPIs vary by objective: for lead generation, CPL (cost per lead) and MQL volume; for brand awareness, reach and share of voice; for e-commerce, revenue, ROAS, and conversion rate; for SEO, keyword rankings, organic traffic, and organic revenue. A common mistake is tracking activity metrics (posts published, emails sent) as KPIs when what matters is outcome metrics (leads generated, revenue attributed).
Real-world example
An e-commerce client's KPIs for a paid search campaign are: ROAS above 4×, CPL below £25, and a 2% or higher conversion rate — outcome metrics tied directly to business profitability.
Related terms
A metric measuring revenue generated for every pound or dollar spent on advertising.
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