Moving Beyond Vanity Metrics

James Thomas, CMO of Allocadia, recently published an article about Marketing Metrics That Matter, in which a great quote about measuring clicks, opens, and likes from Sanjay Dholakia of ClickZ caught my eye:

“Don’t get me wrong, they are important to running the engine, but they are merely intermediate steps to an ultimate outcome.”

Why do I think this is such a great quote? Because it clearly articulates the importance of what have become known as “vanity metrics”.

I’ve worked and talked with many C-level managers throughout my career and am still hearing a lot of disregard for marketing ROI based on likes, follows, tweets, opens, and clicks. While these corporate leaders and decision makers recognize that online and social marketing is a requirement in today’s world, many still don’t fully understand how likes and follows turn into revenue, and therefore aren’t fully bought into the need for sustained or increased budget allocated to these areas.

In product manufacturing, every input is measured and optimized. Using today’s advanced ERP and manufacturing technologies, companies track the financial outcome of every change to inputs and process. CEO’s understand the relevance and impact of this, and through their CIO’s and CTO’s have invested heavily in this area for decades.

Thankfully, companies like Allocadia are now bringing this same rigour to measuring the financial impact of marketing decisions. Perhaps the day when CEO’s and CFO’s have the information they need fully appreciate the impact of intermediate marketing results on ultimate outcomes, or the impact of likes and follows on both top and bottom line earnings, is just around the corner.