This blog entry is written in response to a blog by Suhail Doshi of Mixpanel titled Bullshit Metrics (http://sufficientlyadvanced.net/bullshit-metrics)
Suhail Doshi of Mixpanel calls user signups, page views and other similar metrics as Bullshit metrics saying that these metrics don’t really correlate to the success of the startups.
Maybe Suhail forgot that only in May, Mixpanel itself had touted that it measured 7 billion actions (http://gigaom.com/2012/05/10/mixpanel-raises-10m-in-bid-to-dominate-data-geekery/). What does that mean anyway? Isn’t that bullshit metric as well?
Metrics such as user signups and page views are important. Getting enough users to sign up does matter. Retention, active users and other metrics that can only be measured after the signups have occurred in the first place.
Page views cannot be wished away when most Internet businesses are still dependent on advertising as a source of revenue:
The blog talks about Tumblr’s 20B impressions each month as one example of a bullshit metric. Now if we all agree that revenue is an important mechanism to identify a key metric then I guess we all agree that advertising revenue which is driven by ad impressions is a key metric. Ad impressions are directly proportional to page views. This means that page views is a metric that cannot be wished away. While for many, this may not be the single most important metric but it is an important metric nevertheless.
New metrics of measuring engagement especially in media such as engagement in the form of likes, or re-tweets are also important but again, similarly they aren’t necessarily the only metric that can be correlated to success.
Many Internet businesses depend on advertising revenue (including social media giants like Facebook and Twitter) and what matters to them are Page views which leads to ad impressions, clicks, conversions, cost per conversion, brand lift, etc.
The survey results below clearly highlight the industry standard:
Metrics used by Brand Marketers in North America to determine effectiveness of online ads:
Active users are an important metric for Facebook. But Page Views are important in order to justify ad impressions:
Page views are also measured even through photo flips because this helps Facebook justify the various number of impressions of ads it serves up to each user. As the pages are flipped, the ads change because FB follows the standard practice that was set by various publishers for a long time – display different ads on different pages and earn more.
Facebook’s charges are impressions based or sometimes click based. (Cost Per Milli - CPM - which represents 1000 ad impressions or on Cost Per Click - CPC basis). Page views are inherently, a very important metric.
Facebook ad screen showing how the ads are sold:
What is changing is that advertisers have been saying that things like Click Through Rate (CTR) or eCPM don’t matter but none of that has been leading to any kind of One Key Metric. It all is leading to several different metrics depending upon the mind of campaign run but again they are all linked to Page Views.
Engagement is an important metric like for example videos played. I do not disagree. But may not the only key metric. The survey below clearly shows that no single metric is important to the ad agencies / advertisers who are the primary source of revenue to someone like (Google) Youtube.
I don’t think everyone is going to start dropping existing metrics and rush to find that single key metric that they need to focus on. There are a lot of people who do not agree with this and are already labeling it a fad. I don’t have an opinion on One Key Metric.
But calling key metrics that actually are directly related to the business’s success as “bullshit metrics” is being stupid or just being ignorant.