The Problem With Metrics

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Zane McIntyre, co-founder and CEO at Commission Factory.

Advertisers know that measuring success based on reach doesn’t lead to conversions. Yet impressions, clicks, social shares, quality scores and time on site are all vanity metrics being thrown around by companies talking about ad effectiveness and performance. I get it: How do we know if people are interacting with our ads?

If marketers know their performance measurement ABCs – acquisition, behavior, conversion – then they should be able to reverse-engineer the activities needed from certain advertising channels to drive the best outcomes, right? But this isn’t always the case.

View- and impression-based metrics are just as useless on the surface, but they are still being used to determine whether brands are targeting the right type of audiences.

Just because you pay for a click doesn’t mean you are guaranteed an immediate return. If a campaign is nonperforming, marketers are wasting their budgets and losing that opportunity. That puts them in the mindset of constantly trying to optimize existing spend instead of coming up with creative strategies that drive conversion-focused outcomes.

When advertisers conduct tests to determine the best thumbnail for video views, for example, advertising “reach” is determined by the number of people who see it – even if only for a moment. But then viewers quickly leave, often after the premise they were promised is under-delivered. It’s a vanity metric and can be easily manipulated with clickbait and paid content promotion, both which can get content in front of a targeted audience quickly and cheaply.

Even if marketers did acknowledge the different types of conversion metrics that could be used, is this something that could be compared against competitors across multiple platforms?

The lack of industry benchmarks demonstrates the infancy and challenges in extracting standardized data from the world’s largest advertising solution providers, encouraging the endless cycle of optimizing campaigns for impressions and views. There is an exploding number of vendors, and each takes the different view of attribution.

Recognition for accountability from these advertising solution providers has slowly begun. Facebook, for example, provided the latest update of its video metrics measurability standards in April and introduced aggregate views of reporting and historical benchmarking. There have also been comprehensive efforts to establish transparency and accountability in video metric measurement through the formation of an internal council, third-party integration solutions and independent industry audits.

But then you still have the issue of setting up individual ad tracking solutions and their different methods. What if advertising solution providers worked together to create a supertag with unified channel conversion-focused metrics? Could the IAB and other industry bodies incentivize and enforce data collection and measurement policies?

For now, advertisers need to add context to their own conversion-focused metrics because looking at them at face value doesn’t always equate to higher performance. It is possible to create the wrong assumptions, such as assigning all site visitors the same potential to convert or not factoring in the relationship between increased reach and conversions, all of which can impact campaign performance.

Data, tracking technology and campaign goals are all important, but none matter if marketers don’t create ads that inspire users to take action from the most effective channel. The question stands: When will advertisers start focusing on conversions, instead of reach?

Follow Commission Factory (@commissionfacto) and AdExchanger (@adexchanger) on Twitter

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  1. Devadit Barahona

    I don’t agree with most of the points of this post. You are describing that all advertisers have the same goals and they are to convert users on a website. That’s been one of the main issues on this industry, trying to measure some unmeasurable post-view actions (at least not by any attribution model). Trying to measure purchase intent with one tag and we will struggle as an industry to create value for all the parties involved.

    • Krag Klages

      @Devadit – That was my initial reaction as well, but I think the larger point in the article is about “outcome-based measurement” as opposed to arbitrary non-behavior based measurement. I agree that conversion is probably the wrong word – “outcome” or “event” would have been more appropriate. Not sure if that helps you frame his points in a different way.