Occams Razor By Avinash

A lot of digital analytics focuses on direct response (conversions, leads, etc.). But there is an additional valuable, and sexy, focus of our marketing we don't give enough analytical love: Branding!

It is sad that we spend so little time on brand analysis, primarily because 1. there is such little accountability to brand marketing and 2. it is such a strategic part of any business.

So let's fix that problem in this blog post. Let's become BFFs with a lovely hidden gem that helps you leverage one of the largest source of data on the planet to understand the strength of your brand over time.

[Bonus One: Read: Brand Measurement: Analytics & Metrics for Branding Campaigns]

There are many different tools, both online and offline, that measure the elusive metric called brand strength. It's elusive because brand strength is, at its core deeply qualitative and none of us measurement types can really see inside your hearts and draw charts of the evolution of what's in your heart over time. So we use proxies, and we do the best we can.

One of my favorite tools to do that is Insights for Search which provides an incredible way to see how interest in your brand has grown over time and whether you are strengthening your brand over time.

Brand Strength via Unaided Brand Recall

Insights for Search sits on top of all of Google's organic search data from around the world. I believe it is one of the best possible ways to measure what humanity is thinking, and telling us via the queries they run on Google. I love using this tool to measure "unaided brand recall ."

The stronger your unaided brand recall, the more likely people recognize you, think of you, consider you when they need what you have to offer. I never search for a sports car. I search for the "best Nissan sports car."

You increase unaided brand recall by creating great products (its not called a tablet, they are all called iPads), delivering fantastic service ("their return process is as good as Zappos"), and of course online and offline advertising.

Sometimes it all works together. Recently I saw a TV ad by eBay for designer jeans. I typed designer jeans into Google (for that is what people do when they watch TV). The first ad was for Amazon. No eBay PPC ad or SEO listing showed up. Clever Amazon tying its online advertising with a competitor's offline advertising. Now I search for "amazon designer jeans." :)

For your brand Insights for Search provides an incredible way to see how your brand has grown over time, and whether you are strengthening your brand. If you strengthen it, you drive people to look for you (and not your competitors), and you can capture them more easily using Search (Organic or Paid). Brand queries, obviously, also convert better.

Leveraging Google Insights for Search

So over time, how's your brand doing?

Step 1: Type your brand name, and your direct competitor, into the Search Terms area of Insights for Search .

Step 2: Pick the right country, time period, and -this is important – high-level category in which your brand belongs.

Step 3: Click Search.

Step 4: In the middle of the resulting report you'll see a trend that looks like this:

This shows the number of searches for your brand, relative to the total number of searches done on Google over time (for the geographic region and time period you've chosen). The data you see is normalized and presented on a scale from 0-100.

This is interesting. You can see that eBay (green) rose for a while but has been essentially flat. During the same time period Walmart (red), Amazon (blue) and Target (orange) have done exceptionally well.

But (as every Analysis Ninja knows) competitive context (above) is good, but industry/category context is even better! So…

Step 5: Click on the tab that reads "Growth relative to the Shopping category" and boom!

This is a lot more interesting. [Click on the above image for a higher resolution version.]

The graph shows the change over time, starting in Jan 2004. On the right axis you can see how each brand has grown over time in terms of its brand strength, in context of the growth of the Shopping category.

It is pretty amazing to see that even as eBay has massively ramped up its offline (including big TV) advertising, at least in this context its growth (unaided brand recall) has actually lagged its competitors quite a bit.

eBay's green line is very close the performance of the category (and you'll see that often at peaks in the shopping category queries, eBay actually does worse starting holiday season 2009).

The tussle between Wal-Mart and Target is interesting. It used to be cat and mouse, but over the last three years Wal-Mart is clearly leaving Target in the dust (just look at that spike during this past holiday season, omg!).

Amazon is an interesting example. It used to fall behind lag the other two in brand queries, but you can see how starting late 2009 (bad year for Target in this context) Amazon overtook Target and now (2011, 2012) is casting a big shadow over Target. For a real appreciation of how amazing this accomplishment is, consider the TV ads Target runs, the number of Saturday mailers it sends out, the number of billboards it buys, etc.

The above trend lines, when viewed in context of your category, helps you understand how well you are doing in terms of increasing your brand strength.

Do this analysis for your company.

Brand strength is important because when I type "ebay big screen tv" in the search field, I essentially eliminate everyone else. If I type in just "big screen tv", I'm going to Amazon (they just rank so well).

Brand strength is built over time using online and offline advertising. Brand strength is not built by playing a "let's bid on just our brand terms" strategy, but by complementing that strategy with a super-smart organic and paid "let's capture all our brand and category terms" strategy.

[Bonus Two: Video: Enhancing Brand Strength (and Avoiding Brand Destruction) via Social Media]

"Timing The Market"

One thing about Amazon looked particularly interesting to me.

You'll notice that Amazon's Christmas peak comes a few weeks after Walmart and Target. See if you can notice it here:

For Walmart (red) and Target (orange) this is not surprising. These are traditional retailers who have a fixed calendar of marketing execution with an overwhelming emphasis on Thanksgiving. After that, things ramp down.

Traditional retailers often have a fixed multi-channel schedule based heavily on past traditional media plans with less flexibility in being able to incorporate real time odd trends on the web.

But look at Amazon (blue), keep an eye on the highlighted time period above and look at this:

Notice they hit their peak exactly at a time when the Shopping category hit its peak! +25% in the first image above and +37% in one immediately above.

Amazon does such a great job that their brand queries also get an extra spike during that time, from +413% to +525%. You have to hand it to the Marketing folks at Amazon. When their competitors are ramping down (perhaps due to their inflexibility), Amazon can read the market much better (notice Christmas 2010 as well) and are well placed (thanks to Paid and Organic Search strategies) to grab all these new people who are coming into the market to shop.

And precisely at that time both their large competitors are rapidly ramping down their spend! You would think that with actual stores they would ramp up during December because Amazon is at a disadvantage having to use shipping!

Here's the link that should take you directly to the analysis in the images you've seen in this post: http://goo.gl/JbUzK

#rockbranding

Data? Check. Actions?

So what can you do with this data? How can you go and destroy your competitors? :)

I've written a comprehensive post with very specific guidance on how to leverage Insights for Search to identify actions. Please check out that post here: Competitive Intelligence Analysis: Google Insights for Search

In context of the above findings, I would focus on trying to identify the geographic locations in which unaided brand recall is stronger for my competitor(s) compared to me. I would use online and offline brand marketing campaigns to shore up my brand strength.

I would also focus on the very bottom of the Insights for Search report where you are able to see the cluster of search queries most closely associated with a brand (on the left), and the most statistically significant rising terms (on the right). They are full of specific insights you can use to optimize your online search campaigns.

Please check out the blog post above for more detailed guidance.

Five Caveats!

Life would be so much better if we did not have to caveat everything. But, sadly the life of an Analyst is imperfect. :)

Here are some caveats to keep in mind when you do this analysis…

1. This is just data from Google.com. So it just reflects what is happening with the share of people who use Google.com to find what they are looking for.

If I were doing this analysis in Russia I'd be using Yandex, in China I'd use Baidu, etc.

2. This type of analysis works best for medium to large brands. If you are managing a small brand, this might not be an optimal way to understand your brand strength. (Primarily a function of how this data is collected and processed.)

3. These are just brand queries. It is possible that brand zebra is really horrible at getting people to think about their brand, but they are so magnificent and awesome at getting people to visit their site via generic and long-tail queries.

Or you might hear brand zebra say "no one goes to Google since we primary use TV for advertising, they all go to our website directly." Or they might say "everyone in the world has bookmarked our site, no one would go to Google."

All good points.

To account for these objections/scenarios an Analysis Ninja should get additional context for the brand strength analysis done using Insights for Search. You already have the search behavior data, go get the overall traffic picture from a competitive intelligence tool.

I recommend running a report like this one:

I'm using www.compete.com above. You can see how this graph is wonderful context for what you did above with Insights for Search. Now you can answer those objections/scenarios.

4. This is but one (perhaps the most easily accessible) source of data for measuring brand strength. There are other ways to measure brand strength that are also wonderful. Primary market research comes to mind as another solid option.

5. I'm sure I've missed a caveat (this is a dangerous business!), please add your caveats in comments.

As Google Flu Trends has proven, online behavior is a very strong predictor of offline reality. I hope you'll do this analysis for your brand, get context from other data sources, and get your company to take very smart action in moving the dial on brand strength.

As always, it's your turn now.

How does your company measure brand strength/unaided brand recall currently? How cognizant are you of how your competitors are doing? Have you tried to use online data, like Insights for Search, to do this important analysis? What other caveats would you add to the four I've listed above when using this data?

Please share your experience, critique, examples, ideas and feedback via comments.

Thank you.

Excellent Analytics Tips #20: Measuring Digital "Brand Strength" is a post from: Occam's Razor by Avinash Kaushik

 Yes, data is important. Helps make marketing better. Makes for smart organizations. Blah, blah, blah.

You know the drill: Measure. Find insights. Take action. (Or die trying.) Ascend to corporate heaven.

While there is a great deal of appreciation for the power of metrics/data, I've come to realize that Sr. Leaders don't quite appreciate the deep, and often corrosive, consequences of choosing metric x over metric y as a key performance indicator (KPI).

[Sidebar] A key performance indicator is a metric that helps you understand actual performance against preset business objectives. [/Sidebar]

The metric you choose communicates to your organization what's important to you (the POWERFUL person). It communicates to them how their personal success will be measured. That translates directly into what they prioritize when it comes to your digital initiatives.

Choose the right metric and they'll create the most glorious digital experience in the universe, the perfect acquisition campaign, the most amazing customer service channel. And they will shock you with the profits they deliver.

Choose the wrong one and they'll create self-serving, sub optimal, non-competitive, tear-inducing outcomes that will, slowly over time, bleed the business to death.

It really is that stark. Simply because it all comes down to the incentives you create.

Don't believe me?

Let's look at six corrosive metrics and their angelic twins, which illustrate this challenge – and magnificent opportunity – quite vividly.

1. Page Views vs. Visitor Loyalty

Is there anything easier than measuring Page Views? This metric has been in every tool since we started torturing web server logs to measure hits (!).

What does Page Views measure? It kinda sorta measures consumption. It is hard to know if a lot of Page Views per visit is a good thing ("The visitor loved our site so much that they read 23 pages of content!") or a bad thing ("Our site is so horrible that it took 23 pages for the visitor to find what they were looking for") or a horrible thing ("After 23 page hunt the visitor gave up, cursed us, abandoned the site, and went on to tweet to 23,000 followers that we stink").

When you look at 23 Page Views, how do you know which of the above three was the outcome?

But it gets worse.

Most content sites are currently monetized using display advertising, most commonly on a Cost Per Thousand Impressions (CPM) basis. When you are paid on a CPM basis the incentive is to figure out how to show the most possible ads on every page ("mo ads mo impressions!") and…. ensure the visitor sees the most possible pages on the site ("mo ads mo impressions mo page views mo money!").

That incentive removes a focus from the important entity, your customer, and places it on the secondary entity, your advertiser.

It does not take a degree in rocket science to see what happens next. The web is littered with examples of this awfulness.

Here's one simple example.

Photo slideshows are a great way to engage and delight customers. Yahoo! News has them. Except that they neither engage nor delight. Monetization on content websites, including likely Yahoo!, usually is on a Page View-driven CPM-incentivized mechanism.  The way this model manifests itself is that every time you click on the Next Photo button (arrow thingy) they load a new page. The new page has the next photo and lots of new ad impressions. Even on a pretty fast connection that means waiting, often for seconds. Every photo should deliver delight. Instead, every time you click on the Next Photo button, all you remember is the pain of waiting. [I'm ignoring the fact that in this day and age the photos themselves are tiny.]

Would it cause you to think positively of Yahoo! News? Or Business Insider? Or Forbes? Or all these other sites that impose a Page View-driven CPM-incentivized experience on you? More importantly: Would such a poor experience cause you to go back to these sites?

In that single session Yahoo! News made some of its Page Views quota and some of its CPM earnings. But it failed from a macro perspective. Short term gain; long term loss.

Now consider photo slideshows on (my beloved) news site, the BBC.

Just like Yahoo! News, the BBC site uses display advertising to monetize its content (outside the UK, at least). But when you click Next Photo on the BBC’s slide show, there is no page reload. In fact, all the content gets loaded (most likely asynchronous) when the first photo shows up on your screen. This means when you click Next Photo, the content loads blazingly fast. It also means the BBC photo slideshows can use a beautiful fade transition that makes for a lovely presentation.

The BBC photo slideshows don't deliver small doses of pain every time you click the next button. Instead, they deliver small moments of joy.

In that single session the BBC created fewer Page Views for itself, smaller CPM earnings. But it created joy and delight from a wonderful user experience. That directly translates to me using the words "my beloved" every single time I talk about the BBC website, visiting the site a lot more often (5x a day at least), consuming a lot more content, and in the long run actually seeing (and clicking on) a lot more ads. Short term loss; long term gain.

The metric the BBC is focused on is not Page Views, it is Visitor Loyalty.

Visitor Loyalty is not in every single report in your Digital Analytics tool. But it is there. It is a standard metric. And it measures not what happens inside a session (short-term incentive), but rather behavior across sessions (long-term incentive). It forces the designers, editors, merchandisers, IT team, and everyone in between to trade tawdry sensational stories delivered via slow-loading, pain-inducing pages, for a focus on customer (not advertiser) delight.

Ironically, that actually means more ad impressions in the long run. It means becoming big.

Take a look around you. Most content sites, be they thesun.co.uk, xinhuanet.cn or nydailynews.com, have home pages that are (and I'm being kind here) link pukes. On average these sites have 500 links on their home page. Why?

If the web analytics dashboard prominently measured Visitor Loyalty, would they still create link pukes?

Would they not think: "Even my mom hates our site, how can I earn her love, the thing that has eluded me all my life?"  Would they then not focus on relevance and not generic link puking? Would they not buy simple behavior targeting solutions to use past behavior to customize some of the experience to deliver delight?

Would they not buy a solution like JumpTime  to, in real time (!), look at the FloPower of every link and economic value it is delivering (still in real time!) to go from 500 to just 200 links? Would they not obsess about speed because both mom and dad despise waiting?

I believe the answer to every single one of those questions is yes. Yes, they would.

All from anointing the right metric, Visitor Loyalty, as your KPI. It forces a focus on the long term and on the right entity (the customer and not the advertiser).

Friends don't let friends measure Page Views. Ever.

2. Revenue vs. Economic Value

Ecommerce/lead gen type websites are typically incessantly focused on one-night stands. "Hello, so nice to see you, now take off your clothes and jump into bed with me!"

Of course they don't say that exactly. But the "buy now, buy now, buy now, buy now" design and merchandising on their websites makes that amply clear. Just try visiting orbitz.com or macys.com or petsmart.com. Sometimes this one-night stand obsession is subtle, sometimes it is obvious in what is presented to you when you land, but it always becomes more transparent as you go deeper into the site.

That is a reflection of a deep obsession on Revenue. It is reflected in the obsession with Conversion Rate. Every web analytics tool in the market measures single-session conversion rate, so if visitor, your potential customer, does not convert in that single session (i.e, refuses the one-night stand), the visit is marked as a failure!

Guess what that encourages? An ever-harder obsession about getting better at scoring more one-night stands.

The problem?

Most people don't want one-night stands. I know, I know, you are super cute and awesome. Still.

Most people want to visit your site, do some research, go away, visit other sites, come back to yours, get more confidence about your brand, go back to Google and compare reviews/prices, come back to your site and add the product/service to the cart, go and ask their spouse/boss for permission, come back and buy from you (or the other site).

That was 7 dates.

When your KPI is revenue, you are focused on trying to get as many single-session conversions as possible. You make bigger Buy Now buttons. You pimp product specs (ugh!). You do sub optimal things. You ignore delivering what's expected on the first six dates.

Sure, some people will have a one-night stand with you. But most won't. Then how you do grow your business? How do you move beyond the standard conversion rate of less than 2%?

Shift to caring about Economic Value.

Economic Value is the sum of Revenue plus the Business Value created by the macro- plus micro-conversions on your website.

So when someone visits your site and signs up to receive email, and does not buy anything, that is not a failure. That is a micro-conversion because that first date will lead to a second, a third and a seventh (if you play your cards right!).

When someone comes to your site and watches a video, that is a micro-conversion.

When someone clicks on the product reviews tab, that is a micro-conversion.

When someone clicks on the "Send Page View Email" link (to get permission from wife/spouse), that is a micro-conversion.

Etc., etc., etc.

Every micro-conversion creates economic value for your business. It engages in the awareness, consideration, comparison, purchase slow dance. It delivers higher macro-conversions (revenue!) over multiple visits by the same person by incentivizing you to behave optimally, in sync with your customers and at their speed. It gently encourages everyone in your company to obsess about the micro-conversions by saying they are of business value, to create better designs, more prominent placement of content/images/stuff customers want.

Over the long term it shifts your company from the corrosive single-session, conversion obsession (for that is what Google Analytics, SiteCatalyst, WebTrends measure) to a pan-session, way-beyond-a-one-night-stand experience that delivers higher Economic Value.

Rather than just focusing on 2% success, and 98% failure, you are now focused on 100% success!

Do please note that I'm not saying don't worry about Revenue. As you saw above, the definition of Economic Value includes Revenue. I just want you to obsess about macro plus micro as THE way of being massively profitable. And as in the first case above, by delivering delight.

Pick Economic Value, your parents will be proud of you.

3. Time on Site vs. Task Completion Rate

Over time (ironic, right?) I've developed distaste for the time on site metric.

Some of the reasons are the same ones outlined in the good, bad, and horrible scenarios for measuring page views. With time on site the problem is compounded because our web analytics tools (unless you implement special extra javascript gyrations):

1. Can't measure time spent on the site if you only see one page, and
2. Can't measure the time spent on the last page of the visit

These sad realities make that metric even more suspect. Maybe suspect is too strong a word. The above two make it very difficult to infer exactly what the performance is reflecting.

Is 7 mins time on site awesome? And should we assume that the visitor spent zero seconds on the last page, or 28 minutes? What is the implication?

[Bonus] How are Time on Page and Time on Site calculated? [/Bonus]

It is not completely valueless. But it is not worthy of being crowned a KPI.

So, what are we actually trying to measure when we use Time on Site?

We are trying to infer whether the visitor had a great experience ("Wow, they spent 92 mins on the site! Man we rock!"). We are trying to infer if they consumed enough of our content (to make them happy and make us money). We are trying to figure out where they had problems ("What? The avg time on site is only 2 mins? Golly we suck!"). We are trying to figure out if our latest redesign was a success ("Look, time on site moved from 3 mins to 900, awesome!"). We are trying to…

This is the operative word: Trying.

The reality is that there is a vacuum there. We are not (yet) sitting inside the brain of the visitor. So we take our biases (also called experience :)), our opinions, our psychological issues, and all that and try to fill that vacuum.

We have no idea who Kim Watkins is and what her 6.3802146 time on site means. So we say: "Look, the average is 2 and Kim spent 6.3802146 mins so that was an 'engaged' visit." Hurray.

Why infer? Why be so arrogant as to believe that our biases, sorry experience, will interpret Kim's visit accurately?

Why not just ask Kim?

Towards the end of her visit let's just ask: "Ms. Watkins, why did you come to our website? And were you able to complete the task you were here for?"

Two simple questions. The first gives primary purpose. The second is a yes or a no.

Kim will let us know she was there to buy a pair of Manolo Blahnik pumps. And no, she was not able to complete her task after 6.3802146 frustrating minutes because neither your navigation nor your internal site search engine got her to the right page.

And no, it was not a very "engaging" experience.

When you choose time on site as your KPI you are encouraging your organization to apply inference, and make changes that are, at best, wild guesses with a 1/100,000 chance of fixing the core problem.

When you choose task completion rate as your KPI you are encouraging your organization to put their ear directly next to the horse’s mouth, listen, feel the breath, then go fix the problems the horse has identified.

You'll agree that only one of these methods improves business profitability, results in customer-centric experiences and reduced losses from failed expeditions to chase mirages identified as issues.

And no, Ms. Watkins is not a horse. She is fine young woman. :)

Don't infer. Ask.

4. % of Search Traffic vs. Share of Global Search Volume

This one is more subtle. It is a matter of which lens you want to look at your performance.

% of Search Traffic: This measures the percentage of traffic you receive from search engines, in context of all other traffic sources.

How do you get it? You log into Baidu Tongji  (or Yahoo! Analytics) and create a little pie of your Search, Campaign, Direct, Referral and Other traffic sources. That shows you that 45% of your traffic is from Search. [Given how people use the web to seek information, at least for now, around 50% seem to be about the optimal number.]

You feel proud because you started with just 5% of the traffic from search engines. You've worked on a robust search engine optimization and pay per click programs to steadily grow your search traffic. Bonuses have been distributed.

This is a cause worth celebrating and, unlike other metrics in this blog post, given the deep importance of search this metric can be promoted to a KPI. It will incentivize the right behavior. Working ever harder on understanding your content, CMS and business strategy to do ever better SEO and PPC. It will drive the % of Search Traffic graph to go up and to the right (bigger piece of the pie). That 45% is now 500,000 visits a month from search! It is pretty good.

The problem is that we can often get stuck just looking at our own data, and in doing so we miss a chance to understand the real opportunity. We might completely miss the boat even as we celebrate what looks like huge success (moving from 5% to 45%).

Share of Global Search Volume: This measures % of search queries on a search engine that result in visit to your website.

You received 500,000 visits from Google.com. There were 209 million searches in your category (say pets) on Google.com originating from the US.

So Share of US Search Volume = 500,000/209,000,000

Gives you a different perspective right?

Some questions are simple. "OMG we have such a tiny share of the visits, what do we need to grab an ever bigger share?" Sure, not all 209 million will end up on your site, but you define the pets category! You have to get more than that tiny number of referrals. This will have huge implications on your paid search strategy, your valuation of clicks you get from Google and Bing. You might have to go out and hire new people, get a new agency, experiment with the long tail, buy some behavior targeting solutions, so much more. Sure we went from 5,000 to 500,000, but that will simply not do. The opportunity is too large and too relevant to ignore.

Other questions will be much harder. "OMG we spend mmm millions on TV, Radio and Magazines trying to create demand by interrupting people. For the most part we don't even know if they care about us, our products or our ecosystem. And here are millions of people behind 209 million queries a month who are raising their hand to say they want our products and services, they are interested in our ecosystem! We are spending ttt thousands on search. Should we rethink the balance between 'interrupting to possibly create demand' and 'welcoming with open arms people who want to hear from us'?"

This is a very, very hard discussion to have. Egos, politics, years of doing the same things, opinions, and genuinely believing that the current path is the best one … all come into play.

But if you want to be an agile, nimble competitor, it is a discussion you have to have. Even if in the end the TV budget stays 5,261% higher than digital. The debate is important. Making deliberate choices is important (even if you make the wrong choice). Because deliberate choices can be revisited. Data can be analyzed. Course changes can be plotted.

If you never deliberate, you slowly silently reach the point of no return and file bankruptcy protection.

Perhaps you'll get lucky and that won't happen to your company.

But changing the lens through which you view success can ensure that you watch the right thing, you debate and deliberate, you choose to slowly experiment, you shift budget. Step one? You use a metric like Share of Global Search Volume to incentivize the people in your company to look at the right thing and then power the right discussion.

Like everyone else, I love TV. I'm not advocating that the TV budget above should be 0%. But it is profoundly sub optimal to have this mismatch: Let's spend all our money on a channel where we, at best, kinda sorta feel users with the right intent are and let's ignore the one where 100% of the users with the right intent exist (and are looking for us!). That is a unsustainable life threatening strategy for everyone. Unsurprisingly it results in a weakening of your brand and profits. Yes, even for you.

Go change your lens.

5. # of Followers (or Fans or +1s) vs. Conversation Rate

One of my most retweeted quotes about social media goes like this: "Social media is like teen sex. Everyone wants to do it. No one actually knows how. When finally done, there is surprise it’s not better."

That probably says it all.

And how do we compound the problem? As major brands we proceed to measure one of the most useless measures of success: The number of Likes we get on Facebook.

Or the number Fans or Followers or +1s on Twitter, Google+, RenRen, Vkontakte and other lovely social channels.

When your digital dashboard measures Likes/Followers/+1s, what are you incentivizing your Agencies to do?

Use every legitimate and illegitimate technique out there to beg/cajole/lead/mislead people into pressing that button. Very little thought given to what happens after the button press (no incentive!).

What is the medium or long term strategy to engage with the audience? Where is the plan to ensure your social contributions score higher on Facebook's EdgeRank algorithm? Where is the structure that will ensure you build out a real credible asset for your company?

You have a lot of Likes, but you never get to creating a robust Earned media channel for your company. [An optimal inbound marketing portfolio will have balanced Owned, Paid and Earned channels.]

To seekers of Likes and Followers, social media "strategy"ends up being something lame, like sweepstakes, polls and pimping your latest press release. That barely works in the real world. Why would it work in an ADD environment like social media?

So how do we incentivize the right behavior? Look beyond the +1s, Followers and Likes, and leverage social channels to build out a community of like-type and like-sized :) people around you, a community that converses, shares, amplifies and, over the long term delivers economic value to the company. Leverage what the channel is really, really good at, close one too many connections based on conversations and value.

I've defined four metrics (Best Social Media Metrics) that incentivize the right behavior.

In context of this blog post, you should use Conversation Rate as an alternative to # of Likes.

I've defined Conversation Rate as: # of Audience Comments Per Social Contribution

You can compute it for every social channel on the planet.

With TV you don't know who your audience is or if they are interested in you or what they care about., In social channels, you know all of those things. You can use that knowledge to participate in and initiate conversations. You can build a better connection (social equity? :)) and you can deliver value (by sharing valuable tips, answering questions, linking to good deeds by your competitors, creating special unique content, etc., etc.).

Conversation Rate incentivizes you, or your proxies (agencies), to really understand what social contribution is causing your audience to add their voice, to have a conversation with you. That will help you optimize your contributions, force you to understand your audience, and deliver value to your audience and your company.

Get zero replies per post/tweet/status update?

Your million Likers/Followers are telling you something. Stop. Reboot.

As your agency/company moves away from a Likes quest, you'll be astonished at the incentive Conversation Rate provides your employees. That in turn, slowly but surely over time, create a credible Earned media channel for your company.

So do the right thing. Converse. Don't shout. Don't pimp. Don't sweepstake.

6. # of Installs vs. 30 Day Actives

I was advising a stealth mobile application company (hello future one billion Facebook dollars!) and this example comes from that experience.

If you've ever created a mobile app you know that from version 0.1 all the oxygen in the room is taken up in trying to figure out how to get your first 100,000 installs, how to score the Editor's Pick etc.

That is understandable. There are fifty million apps in iTunes and Play.

So naturally, # of Installs becomes the KPI that goes on top of the dashboard.

The problem with # of Installs is that it does not provide deeper insights about the value of the app to the users. It does not say anything about what the engineers got right or wrong. There is nothing in # of Installs that drives an obsessive understanding of the customer, the app experience/value, product development and all those other more valuable strategic parameters.

My advice to the team was: "Let's keep # of Installs as a metric we track, but let's make 30 Day Actives as our key performance indicator – the thing we really, really focus on."

There are so many amazing incentives from a focus on 30 Day Actives.

First, the company deemphasizes short term win — installs — and emphasizes the long term win — retention.

Second, employees care a little less about hundreds of new installs and start to care about 50% of people who uninstall the app in the first 24 hours.

Third, the company comes together to focus on the customer in every facet of their execution.

What promises are our sales/marketing programs making? What does the post-install process look like?" "Is the app instrumented to collect the right usage data? What is the optimal number of ads in the app that causes fewer 30 Day Actives? When people cancel, what does that experience look like? How do we go about releasing updates to ensure higher retention? Do we need a loyalty program? What can do to empower our customers to spread their stories about us? 

And so much more.

When the focus is on the # of installs it is not hard to imagine that there is no overt incentive to consider the above questions, or to assign a high priority to getting those answers.

So change.

Use 30 Day Actives as your KPI. Build a stronger profitable business.

Summary

It is important to point out that I'm not advocating that you stop measuring page views, revenue, time on site, % of search traffic, # of Likes, or # of installs. They are all fine metrics. You'll most likely use them as diagnostic measures when you analyze the metrics I do recommend you shift to.

I'm advocating that you not make them KPIs, don't crown them God, don't allow your employees to solve just for the primitive six. Because none of these six metrics incentivize optimal behavior or business outcomes.

You become what you measure, so why not solve for what actually matters?

Let me close with a quote on incentives, from the inimitable Steve Jobs…

"Incentive structures work. So you have to be very careful of what you incent people to do, because various incentive structures create all sorts of consequences that you can't anticipate. Everybody at Pixar is incented to build the company: whether they're working on the film; whether they're working on a potential direct-to-video product; whether they're working on a CD-ROM. Whatever their combination of creative and technical talent may be, we want them incented to make the whole company successful."

No one could have framed it better than Steve.

Incentive structures are not a web analytics problem. They are an organization design problem. But in choosing the optimal metrics to crown as heroes we can use data to incentivize the right behavior, value creation for a company, and deliver happiness to customers.

Good luck!

As always it's your turn now.

Do you use the primitive six as KPIs in your company? Have they incentivized you, your peers, to solve for optimal business and customer outcomes? Do you have other suggestions for primitive metrics? How about suggestions for metrics that incentivize optimal focus? Got a favorite "OMG I'll die if we can just measure metric x"?

Please share your feedback, suggestions, critique, huzzahs via comments below.

Thank you.

You Are What You Measure, So Choose Your KPIs (Incentives) Wisely! is a post from: Occam's Razor by Avinash Kaushik