Do you set OKRs for your advertising, or base everything on KPIs?

Every good leader knows that when you report on your goals, you have to report on key results. But sometimes you hear your manager talking about only KPIs (“Key Performance Indicators”). I totally understand,  it's easier to say “We're going to bring in more traffic” than to say “We're going to do a better job of retargeting people who visited our website but didn't purchase.” It's also easier for some of us to talk about KPIs instead of OKRs (“Objectives and Key Results”) because we might not yet have experience with setting and achieving OKRs. 

As businesses scale their advertising efforts, there's a vital distinction between setting objectives and key results; it's a fine line. Without OKRs, KPIs are rendered useless as an anchor of accountability, and without KPIs, your growth won't be measurable against any set goals.

But there's a lot to gain from setting OKRs and reporting results against them — and here are specifically why you should set OKRs for your advertising goals.

Get to grips with OKRs (Objectives and Key Results) and KPIs (Key Performance Indicators) for your advertising

What Are OKRs?

OKRs are a way to set goals that measure success. The name comes from "Objective" and "Key Result," which describe what the goal is (objective) and what you need to do in order to meet it (key result).


Here's an example: Let's say your objective is to increase sales by 10 percent compared to last year, but you have no idea how you'll do that yet. That's where key results come in — they break down your objective into measurable steps. So instead of saying "increase sales by 10 percent," you could say something like this: "Increase sales by 5 percent in Q1" or "Double web traffic on Black Friday", especially when web users are more inclined to purchase on Black Friday compared to other days of the year.

What are KPIs and how are they limiting for advertising?

KPIs are key performance indicators, which are used to measure the success of your ads. A KPI could be a click-through rate on an ad, or the number of leads generated by an ad.


In order to be successful, KPIs need to be measurable and quantifiable. If your marketing department is focused on driving clicks to your website, you may not be able to measure the end goal of that click: did it make you money? Did it help build a relationship with a new customer?

Some examples of good KPIs for advertising include:

Cost Per Customer Acquisition (CPA) — The average amount per customer acquired through paid search or social media advertising. This can be calculated by dividing the total cost spent by the total number of customers acquired.

Conversion Rate — The rate of conversion of web users (either sales/leads/downloads) compared to the traffic over a given period. This is calculated by dividing total traffic by the number of sales/leads/downloads. This is a very important KPI in PPC advertising as it tells you how good your content, ads or product is for users. 

Click Through Rate — The rate of clicks on your ads compared to the number of web users who saw your ad. This can guide marketing/PPC teams on how effective their ad copy is, how relevant it is, or how appealing the call to action is for a particular industry or audience segment.

Should you use both OKRs and KPIs for your advertising?

Should you use both OKRs and KPIs in your advertising measurement?

The biggest problem with KPIs is that they're not very flexible. You can't just set a KPI and then decide to change the goal. For example, if you set a KPI to drive more traffic to your website, but then find out that the best way to do that is by sending people to your blog instead, it's going to be difficult to change your strategy on the fly.

The other problem with KPIs is that they're often not very specific. If you set a KPI for "increase revenue" without specifying how much or when then there's no way for you or anyone else in your company to know if it was successful or not.

Should you use both OKRs and KPIs in your advertising measurement?

The fundamental difference between OKRs and KPIs is that OKRs are qualitative objectives, while KPIs are quantitative. However, you should use both to achieve business success, as each measure different things in your business. This will help you reach your ultimate goals for your business and customers.

So, what should you do?

Companies should set OKRs (Objectives and Key Results) and KPIs (Key Performance Indicators) for their advertising goals. Doing so allows companies to reach their advertising goals as well as get other non-advertising results. Whether you're managing a company or just a team, it is crucial you have both KPIs and OKRs being used to track your advertising goals. Both are useful in tracking the progress of your advertisement campaigns; however, KPIs are really good for getting data for other parts of your business, and OKRs are designed with company-wide goals in mind.

If you are implementing any business initiative, whether it is a new product or service launch, you need a measurable goal to gauge your success. Ultimately, when both are used together they provide far greater value than if they were used separately.


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