Urgent need for new online metrics

11 Mar 2010

Top-right-oriented-graph-itis is a particularly nasty condition, prevalent amongst many busy middle and senior managers; it gives them symptoms of a warm and fuzzy feeling that all is well, when actually they don’t know if all is well or not. It manifests itself in a desire to view graphs which generally rise from bottom left to top right, with the issue of what is being measured, and how, simply secondary to have a graph conforming to the correct shape.

In the world of web analytics top right-oriented-graph-itis is particularly rife, with the only challenge facing the web manager being what to put into the x and y columns to ensure the graph goes the right way.

Web managers across the land, in a desire to sate their senior management’s case of top-right-oriented graph-itis, will put anything in the columns to make sure they stay out of the firing line for another month.

What this invariably means is that time goes in the x axis and anything from hits/page impressions/unique users goes into the y axis. As sure as egg.com is egg.com, over time search engines and social media identify a website, some traffic gets driven to it, more pages are added to it, and by a processes of osmosis all the KPIs (key performance indicators) for the website get driven towards the top right-hand corner.

Senior management can breathe a sigh of relief that the online channel which they don’t quite understand is going in the right direction and they don’t need to cure their graph-orientation medical condition. Job done.

Therein lies the rub. There is no relationship between unique users and commercial business KPIs – page impressions on their own do not facilitate the making of wise business decisions. And heaven help us unless you are a Unix system administrator, the humble hit has no value at all.

Many marketers have already observed this and thus have made valiant attempts to link online activity with more traditional KPIs.

Offline methods of communication

Those involved in offline forms of communication will be familiar with measurements such as recall rates, column inches and market penetration, but yet again these crude tools are clearly square pegs in round holes. They manifest themselves in impossibly difficult to benchmark terms such as banner ad page impressions and click-through rates.

When it comes to the world of social media the challenge becomes greater still because our old-world traditional marketing metrics and our new-world online metrics are entirely inadequate to allow us to set targets and measure performance.

There is a crying need within the internet industry to establish a new set of metrics based on audience, engagement, loyalty, influence and action. Once we understand that opt-in online marketing is about lots of individual dialogues – and thus contrasts in almost every way to offline marketing, which is about lots of mass-market monologues – it must change everything about how we measure what we do.

How large is our audience? How engaged and responsive are they to our communications? How loyal are they to our brand and how is that enhanced through online channels?

How influenced are they by us, and how well do they act as advocates to their friends and colleagues on our behalf? Have we persuaded them to take the desired action?

Revamped online metrics

We have been blessed in marketing by the work of Kotler, Peters, Drucker et al in the past three or four decades, with their seminal texts that have become the mainstay of third-level education. As the millennium enters its second decade, an opportunity exists for web marketers to write their name into history by establishing a set of credible, senior-manager-friendly online metrics that embrace new marketing, empowering businesses to understand their online return on investment and make wise decisions about the future.

Photo: Gareth Dunlop is managing director of the leading digital consultancy Ion. Their customers are in 15 countries and include Commonwealth Secretariat, Encyclopaedia Britannica, Macmillan Cancer, Oklahoma Publishing and The Patent Office.

Read more by Gareth Dunlop:

Electricity and the gold rush

The real reason the recession is good for marketing

The class of 2009 wants your job!

Firms need to be customer zealots, not technology zealots

Firms need to put aside their fears and embrace the web

Online advertising overtakes TV advertising

Gareth Dunlop runs Fathom, a UX consultancy that helps organisations get the most from their digital products.