Why You Shouldn’t Be Tricked by Vanity Metrics

Why You Shouldn’t Be Tricked by Vanity Metrics

We all like big growth numbers, the more the zeroes, the better. 🙂 There is nothing more thrilling than hitting a milestone and announcing that we’ve hit a million downloads, attracted 500.000 registered users or reached thousands of followers on social networks. After all, what reflects one’s success better than the astounding number of page views or social media mentions?

However, if you’re planning to build your business from scratch, you need to know that, even though they may be a sign of traction, these growth metrics are often highly deceptive. This is exactly why the world of online marketing recognizes them as vanity metrics.

Sure, by liking, sharing and retweeting you, readers are trying to send you a message. Still, this kind of communication is unclear and inconclusive, making it inadequate as a decision-making parameter. On the other hand, clear communication is as important as oxygen.

What are Vanity Metrics?

The only metrics that companies should invest in are those that help them make rational and systematic decisions regarding their future growth. Unfortunately, the majority of the information startups take pride in is what is called vanity metrics.

Vanity metrics are all those pieces of data that, if they go up, make you feel good about your achievements, but actually have virtually zero impact on your further development and decisions.

Of course, we’re talking about things like the number of registered users, downloads, social media mentions or page views.

Just take an example of a company that has achieved the total number of 15.000 “hits” to their website for some unknown reason. Can these numbers tell you why this all happened? Of course not. Maybe some blogger mentioned you on their site? Even better, maybe some of your blog posts went viral? No one knows. Additionally, can these digits help you find a way to generate more traffic to your website or determine whether all those hits are of equal value? Of course they can’t.

That’s where actionable metrics step in. They will help you understand how powerful your website and social media presence are when it comes to attracting, retaining and converting new customers. Most importantly, such analytics help you develop an understanding of whether your marketing tactics are really working in some real-life situations or not. At their core, actionable metrics will answer the following questions:

  • How to gain more customers?
  • How to gain revenue?
  • What are the main strengths of your business?

How to Recognize Vanity Metrics?

Vanity metrics are not just a waste of time. They may have a negative impact on both your budget and marketing efforts, as well. Therefore, if you rely on them, you won’t nudge your marketing campaign in the right direction. The only thing you will gain here is the sense of false success. Precisely because of this, you need to be able to recognize vanity metrics and stay away from them.

One of the most obvious examples of vanity metrics is click-through rate (CTR). On a computer, such metrics are ineffective because banner ads are usually ignored, getting approximately less than two clicks per 1000 impressions. On mobile devices, however, a large number of clicks might be triggered by errors, which is typically a result of either a device lagging or “fat fingers” on a small screen. Finally, CTR also includes clicks not only by the actual visitors, but by bots, as well.

Alternatively, there is also a video completion rate, which is another lucrative, yet highly deceptive metric. By counting all impressions and not just views in a full-sized video player, you’re taking into account even the users that didn’t actually watch the video. In other words, video completion rate misleads you by presenting a limited scope of the data available.

The Metrics You Should Definitely Track

In order to constantly track the growth of your startup, there is a myriad of metrics you need to track. Unfortunately, this brings the risk of getting lost in the sea of useless data.

It’s vital that you narrow your options to the metrics that provide invaluable insights. Take some time to see which of those metrics actually bring you closer to the goals of your company. Here, you need to pay attention to those that take into account both costs and performance and give you a deeper insight into WHY something happened, instead of counting raw digits. Also, which metrics will work for you, depends on your unique needs and goals.

Here are several examples of useful metric:

Cost per Impression (CPI) or Cost per thousand Impressions (CPM). In the world of marketing, it is always crucial to reach the right audience at the right time. In other words, when you’re trying to establish the ROI for your campaign, you need to assess how cost-efficient reaching your target audience really is. These terms refer to advertising campaign, where marketers pay each time an ad is displayed. CPI is the expense incurred for each potential customer who views an ad, while CPM refers to the cost for every thousand potential viewers.

Cost-per-Action (CPA) or Pay per Action. Every campaign’s goal is to drive some sort of action. Unlike the previous technique, CPA is based on paying for a particular action (an impression, click, newsletter sign up, registration and so on). The cost-per-action metric is approached differently, based on both the goals of your campaign and the overall goals of your business.

Split-tests. In short, A/B tests have most commonly proven as the most actionable of all metrics, especially because they rebut or confirm a particular theory. These tests can be used to take action on anything, regardless of its volume and significance. However, always keep in mind that not all split-tests are the same. The only real test for them is to include them into your decision loop and see what their objective value amounts to.

– New Sessions is an immensely important metric that helps you better understand whether your online marketing efforts were effective enough to encourage customers to come back. Put simply, it refers to the total number of new sessions, and that tell you how many of your website users are new and how many are recurring. Let’s take a simple example. If you alter the design or the content of your site, and the ratio of reappearing visitors starts dropping immediately, it could be a straightforward indicator that your website is losing its power when it comes to ensuring multiple visits.

Bounce rate shows you the number of the visitors leaving your website before further exploring it. For instance, if a potential customer stumbles upon your homepage and leaves it before opening any other links or pages, this means that they have bounced. In other words, as people spend more time on your site, the chances that they’re going to make a purchase also rise. That’s exactly why you want your bounce rates to be as low as possible.

– Channel-specific traffic simply divides your website traffic based on its origin. Unlike some usual metrics that count the number of total visits, this metric explains which source of your traffic is outperforming the rest. Some basic types of your traffic origin that are analyzed here are: direct channels (the number of people who visited your website directly), referrals (include the number of links on external sites), organic (people who learned about you after performing a search) and social (the number of visitors that found you on social networks).

All in all, it would be safe to assume that vanity metrics are like a bikini. They reveal almost everything, but hide what’s the most important. The image you see is not incorrect. It is incomplete. To make things worse, parts that are missing are those that determine your company’s actual performance in the industry.

On the other hand, with actionable metrics, you will be able to develop a deep understanding of customer behavior, and thus make right decisions in the future. Your turn, what actionable metrics are important for your business?


Sarah Green

Sarah Green explores the latest web trends and covers stories related to technology, startups and digital life in general. Writing professionally since 2012, she has developed a sixth sense for trending topics in these fields.

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