Vanity metrics and actionable metrics have been the subject of much discussion in the digital marketing community in the past few years. Social media marketing has risen to prominence, with over 50 million small businesses now on Facebook alone. At the same time, marketers have been criticised for relying on so-called vanity metrics such as a company’s number of Twitter followers to demonstrate the success of their marketing efforts.
This guide will first distinguish between vanity metrics and actionable metrics. Contrary to popular opinion, however, it will then argue that both types of metric can be useful in certain digital marketing contexts – indeed, the term actionable metric is something of a misnomer.
Vanity metrics are measurements that seem impressive at first yet which are not directly tied to core, revenue-based business goals. As such, these metrics can often be dismissed as useless or even misleading. There is some disagreement over which metrics can be defined in this way. However, metrics that are commonly assigned to the vanity category include:
- A company’s number of social media followers
- Website traffic
- Social media impressions, likes, and comments
- Number of new leads
- Number of newsletter subscribers
- Blog post page views
- Social shares
Looking at this list, it’s evident that some of these metrics should be a matter of priority for certain businesses. Online news outlets, for example, can directly link website traffic to their core business goals given that this type of business model relies on display advertising to generate revenue. Blanket statements pointing to the uselessness of vanity metrics are clearly misguided.
Engagement metrics, not vanity metrics
Many of the vanity metrics in this list can also be used to track prospects’ interactions with a brand’s online touchpoints. In such cases, vanity metrics should really be viewed as engagement metrics. Metrics that enable a firm to see how potential customers are interacting with their posts or ads are inherently useful – they can be used as benchmarks for the performance of online marketing activities and can therefore facilitate the optimisation of a company’s content strategy.
For example, if an above-average number of users share and comment on a Facebook post, then it may be beneficial to expand its reach through paid promotion. The high levels of interaction with the post could act as social proof, encouraging more users to engage with it and potentially convert. Equally, high-performing organic social media posts can be used to guide the creation of engaging paid advertisements that appeal to target segments.
Social shares are also important for search engine optimisation goals. Google representatives have publicly denied that social metrics are considered a ranking factor. However, a white paper produced by Searchmetrics has demonstrated that there is a clear correlation between social signals and ranking position. Performing well on social media could impact your brand’s overall online visibility as a result.
The limitations of vanity metrics
That said, vanity metrics can be misleading when they are reported on their own as an apparent demonstration of marketing success. Compiling a report that merely highlights an increase in website traffic or Facebook likes is not going to impress senior management in most cases. Considered in isolation, this data doesn’t tell us anything about whether a firm is achieving its core business objectives. Such reporting warrants the pejorative use of the term vanity metrics.
Vanity metrics alone do not reveal anything about core business performance because of their distance from the point of sale. It is difficult to relate the amount of time that users spend reading a blog post to revenue generation, although this metric could indicate positive top-of-the-funnel interactions between a customer and a firm that may later contribute to conversions.
Whilst it can be useful to know if users are actually reading brand blog posts for optimisation purposes, generally speaking this metric should only be reported in conjunction with other actionable metrics. To demonstrate the importance of this type of marketing activity, you should also include the percentage of users who go on to convert after having read a particular blog post. Indeed, there are many vanity metrics that don’t tell you about commercial performance on their own, each of which has an associated metric that is tied more closely to revenue-based goals:
Number of page views
Conversion rate for the page
Number of newsletter subscribers
Email opt-in conversion rate
Most viewed site content
Top paths to conversion
Return on marketing investment
Trial-to-subscription conversion rate
The table above introduced the concept of an actionable metric. This is the term used to describe more commercially focussed metrics that relate to activities towards the bottom of the funnel. Actionable metrics should always be associated with some form of revenue generation. Moreover, marketers seeking to demonstrate the worth of their activities should prioritise these metrics above likes and followers in line with the main concerns of senior managers.
For example, the conversion rate of a particular site page is an actionable metric. This metric can directly inform a digital marketer’s actions: pages with high conversion rates should be promoted and linked to, whilst those with low conversion rates may need reworking in order to increase the percentage of visiting users who convert through them. (Note: although overall site conversion rate can give an indication of performance over time, it is generally not considered an actionable metric because this data is not granular enough to guide specific marketing actions.)
Choosing actionable metrics to suit your business
Your choice of particular actionable metrics should reflect your business model and the context in which your business operates. As a B2B company that generates leads through its site, you’ll definitely want to measure the number of sales-qualified leads (SQLs) generated through particular sections of your site and as a result of particular online ads. Whilst this metric is actionable in its own right, it doesn’t provide insight that relates directly to your business goals. In this case, you’ll also want to know the value of each of those SQLs and the cost of generating them. Piecing together all of this information will enable you to calculate an important metric – return on marketing investment (ROMI).
The actionable metrics would be slightly different for a charity that raises funds primarily through online means. For this organisation, the bottom line is the amount of donations that the charity receives. The senior management of this charity will want to ensure that their marketing budget is spent efficiently and generates substantial donations. Once more, the most relevant actionable metrics can be calculated by pulling together different forms of data. You can combine the cost of a particular online marketing campaign with information about the donations it generated to determine the return on this investment. Not only will this assure senior managers of the efficiency of marketing activities, but it will also enable the optimisation of future campaigns.
Making the Most of Both Types of Metric
You should utilise both types of metric in tandem. As has been noted, actionable metrics should be considered the most important from a reporting standpoint. Use vanity metrics such as social signals to measure and improve the effectiveness of day-to-day marketing activities. Provided that prospects are converting after interacting with a brand’s online content, optimising communications can ultimately drive revenue generation.
To ensure that brand-prospect interactions at the top of the funnel are resulting in conversions, it’s vital for your brand to make full use of analytics. Businesses need to implement multichannel attribution strategies that credit all of the touchpoints involved in the customer journey. When properly executed, multichannel attribution can help marketers to identify popular paths to conversion (see Impression’s blog on how to do this). Touchpoints that are often involved in these paths can then be promoted; on the other hand, those assets which seldom contribute to conversions can be modified and enhanced.
Actionable metrics such as top paths to conversion can help to reveal the value added by marketing efforts at every stage, not just those which occur close to the transaction stage. In this way, analytics can provide evidence that vanity metrics focussed on the top of the funnel are not useless.