Defining the Metrics That Matter

Gone are the days when marketers could simply evaluate their business with a few reports, TV ratings and sales figures. Today, the volume of data can be daunting to navigate, luring marketers toward evaluating readily available metrics, such as fans, likes, comments, shares and clicks, in lieu of or at the expense of the metrics that drive the bottom line.

Facebook has seen and been a part of the shift to prioritize measuring actionable real-time metrics that can impact business objectives. And the Facebook Marketing Science team has been on the front lines of navigating this evolution. In the Journal of Advertising, Brad Smallwood, Vice President, Facebook Marketing Science, charts our digital measurement journey, explaining how we evolved the metrics that define campaign success on Facebook, broke down silos with data and shifted the perception of analytics from being a back-office function to having a seat at the table. Read on for a summary of topics covered within the op-ed and what we believe defining the right metrics means for marketers.


Redefining digital metrics

In the early days of digital and social media, marketers had a low understanding of how digital platforms, like Facebook, could drive their business. Goals were short term, with marketers racing to attract fans, likes, shares, posts and clicks. And when marketers looked to develop long-term digital strategies based on “fandom,” growth metrics plateaued. Through analysis, the Facebook Marketing Science team realized that fans were neither contributing to nor detracting from an advertiser’s profit. But focusing on fans was actually distracting marketers from determining the levers that link the relationship between people’s activity on Facebook and the actions advertisers want people to take from their campaign to meet their business objectives. The team used data to build consensus with cross-functional partners within Facebook and help shift how marketers approach advertising on our platform. This shift was also a catalyst internally, helping to advance how the Facebook Marketing Science team approached the measurement of campaign performance and defined success for an advertiser on the platform.

Through this and additional research, we were ultimately able to persuade marketers that there wasn’t value in using fans as a marketing objective to measure success. We then illustrated how interactions (likes, comments and shares) can be used to understand behavior.

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The rise of topic data 

Think about your own News Feed and the diversity of the content you discover, share and consume daily. The volume and breadth of the interactions within News Feed on any given topic is unlike anything captured in a survey or a focus group. These interactions have led marketers to wonder what unique insight could be gleaned by understanding how the 1.65 billion people on Facebook globally are connecting and engaging with friends, family and brands.

Before Facebook could prescribe to marketers how best to use topic data, we needed to understand its value and limitations ourselves. This time, Marketing Science and other internal analytics teams within Facebook were given a seat at the table for strategic planning conversations informed by our data. What we saw was that not all posts were equal and that defining norms and interpreting behaviors were even more important for a marketer if they were to effectively use topic data. We also found that while topic data could inspire creative strategies for marketing messaging and product development strategies, if used to determine campaign performance it could mislead marketers.

Communicating the results of our analysis with our cross-functional partners was imperative to ensure that unstructured topic data did not become a “shiny” metric (like fans). What we learn not only informs our measurement approach but also impacts how the product teams build our internal tools and our client-facing teams advise our clients.

 

Mapping data to business objectives within organizations

As data become a driver for understanding people’s behavior on and offline and informing business decisions, aligning on the metrics that contribute to a business’s bottom line is critical. Cross-functional education and transparency on the metrics that drive value and success for an organization should be shared widely. There is a need to shift the perception that data and analytics are simply back-office functions. Executives and analysts alike need to communicate the availability and reliability of the data on hand.

By breaking down silos, marketers can ensure that key performance indicators (KPIs) are filtered to all employees. Rather than elevating metrics tied to industry jargon, like clicks and cost, the metrics that are important to a Chief Financial Officer—ones that impact the company’s bottom line—become important to everyone within an organization. This clarity becomes increasingly important as the media landscape continues to change and the marketplace evolves; data won’t remain static. Embracing the dynamic nature of information and periodically checking and challenging established wisdom to enhance measurement models with new data is healthy for an organization and the industry as a whole.

 

What it means for marketers 

We encourage marketers and the advertising industry to look inward and examine relationships with data and the value of metrics.

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Be cautious of shiny metrics:
It is hard to shift behavior—marketers still want to know how many clicks a video has generated or understand if there is any correlation between clicks and sales. (Hint: there’s not.) While value-based metrics are not as easy to measure, Facebook believes it gives marketers the tools to drive organic growth and the authority to lead organizations forward

Focus on value first:  Value can be defined differently depending on the marketer and brand. We are determined to help marketers explore the real measures of value that matter to them, instead of proxy metrics, and move from the CPM economy to the value economy. We have seen marketers achieve a greater understanding of their campaigns when they align to metrics that map back to business outcomes like brand awareness, on and offline conversions and app installs.

Elevate the role of analytics: Metrics matter. Analytic teams are poised help their organizations define the right metrics if they are able to contribute to strategic planning conversations. By asking the right questions, these teams can help an organization determine and align to metrics that drive business results rather than get distracted by fleeting metrics. Having an analytic team as a strategic partner will help break down silos that have traditionally formed between analytics and business organizations and encourage the type of cross-functional knowledge sharing that will positively impact the organization’s bottom line.

 

Source: “Resisting the siren call of popular digital metrics,” The Journal of Advertising (JAR) June 2016 (Vol. 56, Issue 2).