Congratulations! You’ve taken the big leap of launching your first digital advertising campaign. After a month or so, you’ve likely received a report with all types of metrics and charts. But what metrics are the most important? What metrics specifically indicate campaign success, vanity metrics, or ROI-based metrics? Let’s explore the differences between vanity metrics and ROI-based metrics and identify examples.
What are Vanity Metrics?
Vanity metrics look great on paper but lack clear guidance for subsequent actions.
Vanity metrics appear in almost any digital marketing report. These metrics look great on paper and are typically easy to track. However, they don’t tell the whole story and thus can’t be used to make campaign decisions.
Impressions, clicks, followers, likes, video views, and email opens are vanity metrics.
Here’s an example:
An optometrist hires a media buyer to run banner ads promoting a back-to-school eye exam special. They receive 200,000 impressions, but they cannot associate any booked appointments with their advertising efforts. On paper, 200,000 impressions look great. However, the optometrist is disappointed because they didn’t book any appointments. The vanity metric (impressions) only told part of the story.
You might be asking yourself, why track vanity metrics at all? Sometimes vanity metrics can be helpful, especially if the campaign goal is awareness.
Take our optometrist example. These banner ads were getting high impressions, which means the optometrist was increasing brand awareness. Their business will be top-of-mind when people served their ad are looking for an optometrist in the future. However, the optometrist’s goal was to book appointments for their back-to-school promotion, not increase awareness. It’s Likely, this tactic wasn’t a good fit for their goal, leaving both the optometrist and their media buyer disappointed. Therefore, clarifying expectations and setting clear goals with your media buyer is crucial.
What are ROI-Based Metrics?
ROI-based metrics inform decisions by measuring means relative to ends
ROI-based metrics (also called actionable metrics) should appear in every digital marketing report. Sadly, they are often left out. This is partially because they require some setup and team buy-in to track accurately.
While tracking this ROI-based metric requires some setup, it helps the company make insightful decisions. For example, A business published a whitepaper on their website a few months ago. They are considering writing another, but they don’t know if their website visitors are downloading the content. They can set up a conversion goal in Google Analytics to determine if their visitors are interested in this type of content before they dedicate resources to creating another whitepaper.
Likewise, the lifetime value of a customer can help businesses make a multitude of decisions. But before they can make these informed decisions, the company must dedicate resources to tracking the components needed to calculate this KPI accurately.
You’ll find that the time spent setting up ROI-based goals is well worth it when your team can make informed decisions based on actionable metrics.
Not everything that counts can be counted, and not everything that can be counted, counts.
In the world of metrics, if you want to measure it, you can. But just because you can measure it doesn’t mean you should. No one wants to be buried under a 100-page digital marketing report. Focus on your business goals and KPIs and track only metrics related to those. Need some help determining and tracking what metrics matter to you? Drop us a line!