Vanity Metrics vs. Impact Metrics
What are Vanity Metrics and what are Impact Metrics? What is the difference between the two? Why do marketers still pay attention to Vanity Metrics? Why should marketers and lead generators only be paying attention to Impact Metrics?
These are the questions we ask and answer in this week’s B2C Lead Generation Podcast. Below are some of the key ideas discussed, but be sure to check out the whole pod if you want more.
What are Vanity Metrics and what are Impact Metrics?
Vanity Metrics are things that are relatively easy to acquire - Impressions, Clicks, Leads - which marketers use to illustrate success, but actually translate to no tangible or actual results beyond the superficial.
Vanity Metrics are also the very easiest for a Bot to create or fake and as such are more likely to fall victim to fraud.
Impact metrics are judged against vanity metrics, but represent a definite outcome. A sale, a performance based result, a KPI that is a final outcome and as such can be quantified by revenue increases.
Impact Metrics can be categorised by a having a Positive or Negative Outcome. The key is that the outcome has been reached and the marketers or businesses using these metrics to judge performance are able to make more aware decisions based on actual rather than speculative data.
For a long time marketers have been overly focused on Vanity Metrics - Why is that changing and why should we focus on Impact Metrics and not Vanity Metrics?
Impact Metrics are real and represent actual data that can inform business decisions.
As we discussed with Dr. Augustine Fou marketers have been focused on Vanity Metrics for far too long, but these numbers are massively distorted by Bots, Ad Fraud and Faked Analytics, and as such it is impossible to make good business decisions based on their data as the data is wildly inaccurate.
In Lead Generation it has been common practice for years to track Quantity of Leads and use this as a guiding metric. But Quantity of Leads - like all Vanity Metrics - don’t mean anything until they are turned into an outcome such as Sales.
By contrast, when you base decisions on Impact Metrics there is no ambiguity or conjecture as you are following black and white data. Where your budget goes is decided by which decisions - such as which channels to spend in - will lead to moving the needle on Impact Metrics.
Are there exceptions to this rule?
The exception to the idea of measuring final outcomes is when there is a far longer sales cycle and as such it is not possible to chase a metric such as Sales straight away.
In this instance the correct thing to do is follow the more short term Impact Metrics and use them to guide you until the sales cycle is complete. An example of this could be rather than measuring the number of email addresses in your CRM (which is a Vanity Metric) focus on the engagement (Open Rates, CTR) on the emails you send out as that one again gives you a better idea of the quality of the leads you have, rather than celebrating the quantity.