KPI stands for Key Performance Indicator. It is usually a number or metric which indicates how well you or your business is performing in a certain area. KPIs are important for measuring success, especially in areas such as sales and marketing.
An example of a KPI in digital marketing would be the number of leads you generated through your website in a month. You could continue to measure this KPI each month and compare results over a period of time to get an indication of performance.