Understanding Advertising Objectives & KPIs

[unrelated] Gorgeous blanket octopus
[unrelated] Gorgeous blanket octopus
Let’s look at 3 business objectives that apear regularly on advertising KPI dashboards: sales, awareness and community. There are many interdependences between them, however there is a stronger link between Community and Sales than between the two other combinations involving Awareness. Basically with digital, social media and technological ubiquity a potential consumer needs less and less direct awareness.

Consumers increasingly validate their value-based brand judgements though a simple Google search. Google: “best organic non-fat milk brand in New York City” and you’ll find what you are looking for.

Advertising campaigns can no longer simply focus on awareness building. The challenge is now to put the product as fast as possible in the hands of the consumer. This adds more pressure than ever to create exceptional and competitively priced products (recently Microsoft and Blackberry tablets made the mistake of setting non-competitive prices thus creating artificial adoption roadblocks).

On the other hand, building a strong and engaged community (see it as a social CRM), can greatly improve direct sales and keep consumers engaged.

The following basic analysis should always be done when setting up advertising objectives.


This is usually the hardest and one of the most important business KPIs.

KPI: number of sales, in-store conversion rate, drive-to-store conversion rate
Message CTA: Drive to store, promotion, drive to store contest, rewards program, loyalty, etc.


Awareness of a specific product (knowledge of a specific product or brand);
Association with a specific product (e.g. Axe & nerds);

KPI: consumer brand awareness (aided, top of mind)
Message CTA: Emotional, content heavy, product presentation, open, no closure

BUILD COMMUNITY (CRM, Social Media, etc.)

1. Community building: opt-in consumer info (DM, email, Facebook, apps, etc.)

KPI: number of opt-ins, type of opt-ins
Message call-to-action: Join now, join promotion, participate, etc.

2. Community engagement: consumer participation in conversations (over social media, word of mouth, etc.)

KPI: consumer engagement (Likes, comments, etc)
Message CTA: Share, comment!, participate, engage, share contest, etc.

3. Community advocacy: consumer brand advocacy (positive brand support, message sharing)

KPI: consumer conversations, likes, recommends, shares, RT, etc.
Message CTA: Share if you love, Join VIP community, Brand Nation, etc.


I’mma Let You Finish: A Digital Business Planner Sequence

Magic mirror on the wall who's the digital plannerest of them all
Magic mirror on the wall who’s the digital plannerest of them all

Digital Business Planning Review

So far I’ve been trying to make the following points:

  1. The digital / social media planner and strategist role must have a very strong business component (metrics, analytics, and general business model understanding).
  2. Any strategy must support a business objective with clear KPIs
  3. Plan for one business objective at a time
  4. The above KPIs must result from a business case
  5. The execution of a business objective is subject to a series of prerequisite strategic programs

Simple Sequence

Business Objective -> Business Case -> KPIs / Metrics -> Program Maturity Model -> Prerequisite Programs -> Planning

Case Study

From the previous example:

Business Objective

Increase the Customer Recommendations by 20% in the next 12 months.

Business Case

Customer base: 600 000
Customer annual value: $1 000 (Annual revenue $600 000 000)
Customer annual net profit: $200 (Annual profit $120 000 000) (20%)
Customer annual churn: 30%
Current recommendation rate: 20%
Recommendation conversion rate: 50%
On average a customer recommends 2 people.

A 20% increase in recommendations (from 20% to 24%) = 4% increase in total recommendations at a 30% churn rate, both cumulative over 3 years = 53.5K customer years

So the increase program will generate in net profit of $10.7M over 3 years.

Determine a budget based on previous programs. Say $1.7M over one year.

KPI / Metrics

Increase by 24K new consumer recommendations for a $1.7M budget.

Program Maturity Model

Determine the maturity level by assessing the quality of current digital programs.

Let’s assume the client program review reveals the following programs maturity:

Digital business model and objectives – Level Advanced (needed Advanced)
Digital analytics & monitoring – Level Basic (needed Advanced)
Digital and social media framework strategy and implementation – Level Advanced (needed Advanced)
Social media policies & governance – Level Advanced (needed Advanced)
Community building and engagement – Level Basic 8% (needed Advanced 12-15%)
Social CRM – Level None (needed Basic)

Prerequisite Programs

Based on previous analysis here are the necessary programs needed to execute the business objective in a single strategy.

  • Implement a more advanced digital analytics & monitoring solution
  • Increase the community engagement from 8% to 12%.
  • Implement a Social CRM


Now you’re ready to do the planning. And you have 3 new programs to implement…. And only $1.7M… Get ready to build more business cases and negotiate.

You cannot commit to the required business objective with deficient prerequisite programs. 

More soon. Would love to hear from you, does this make sense to you?