Data has become a vital currency for marketers as it offers many opportunities to understand consumer behaviour, uncover trends, and make data-driven decisions.
However, with the ever-increasing volume and velocity of data, marketers often find themselves overwhelmed, struggling to differentiate between valuable insights and vanity metrics.
For marketers to focus on actionable insights and weed out vanity metrics, there are many factors to consider, including time and resources, says Richard Brosgill, chief executive officer for APAC at Assembly, on a recent panel on data overkill at Campaign360.
Brosgill explains the most important thing is for marketers to set their focus because they will quickly get distracted if they do not have a clear starting point or approach.
"Vanity metrics may seem important, but they do not necessarily have a significant impact. It should be a shared belief that your focus should be on the metrics that genuinely affect your brand perception, audience experience, and, ultimately, the success of your business," says Brosgill.
"Anything beyond that is just noise that can lead you astray. This is how you ensure that the insights you collect translate into actionable steps."
Jeannette Ho, the vice president of Raffles brand and strategic relationships at Raffles Hotels & Resorts, says before becoming Raffles's brand lead, she oversaw customer analytics and AI initiatives for the Raffles and Fairmont brand.
She recalls one of the most important challenges was effectively utilising the massive amount of data the brand had accumulated over the years. Despite having a wealth of data, Raffles realised it was information poor.
"It became crucial for us to understand the different personas within the company and tailor the data visualisation to meet their needs. For example, we had to determine what salespeople needed to comprehend from the data and present it in a visual format for them. The same applied to front-liners who required a different understanding and visualisation of the data," explains Ho.
"We also needed to pre-define our key performance indicators (KPIs). These KPIs encompass guest loyalty, revenue generation, and competitive market share. While various metrics could be considered vanity metrics, such as social media likes and media impressions, they served as soft indicators of customer engagement."
However, Ho says the ultimate question was whether these metrics translated into actual bookings and long-term guest satisfaction, which were crucial to the bottom line.
"As a marketer, it is essential to distinguish between the key, relevant metrics that directly impact business outcomes and guest satisfaction and those that are nice to have but do not directly impact" adds Ho.
Each of us will encounter approximately 10,000 ads by the end of the day, which means brand marketers or media professionals contribute to this vast amount of information bombarded at individuals, points out Chitkala Nishandar, the director of APAC Marketing Centre at 3M's Consumer Business Group.
Nishandar explains the data marketers choose to measure and track gets prioritised and acted upon because its a case of "what gets measured gets done."
"However, with such a wealth of data available, it can become overwhelming to determine what to focus on. Clarifying which metrics provide valuable insights, help diagnose potential issues, and guide us in the right direction is essential. It's crucial to distinguish between the metrics that provide a diagnosis and understanding of problems and those that keep us moving in the right direction," says Nishandar.
"Rather than completely discarding vanity metrics, they should be placed in the appropriate context. We should utilise them where they make sense and contribute to our overall understanding. However, it's important not to lose sight of the critical metrics that significantly impact the brand, particularly in the medium to long term."
In digital marketing, the abundance of data sources is undeniable. However, as companies progress and explore various data types, a common tendency emerges: forming silos or hiring separate teams to analyse specific data points.
At 3M, each team delves deep into their respective areas, such as the sales team focusing on sales data to identify customer retention strategies and drive additional sales.
Simultaneously, the consumer insights team examines brand health data, identifying areas where brand perception may be lacking, or awareness numbers may be off track. Additionally, the media team celebrates strong impressions as a measure of success.
"While it's natural to feel enthused about the advancements in data availability, I propose adopting a telescope versus microscope approach. Sometimes, it's essential to step back and take a telescopic view, examining the big picture and identifying the critical factors that require attention. In our case, I prioritise metrics such as awareness, particularly spontaneous awareness, as it has a tangible impact," explains Nishandar.
"Another essential metric is brand equity, which keeps us focused on future progress. Finally, of course, critical media metrics and, ultimately, sales are crucial indicators of performance. Starting with a telescopic view allows us to gauge our overall direction before zooming in and scrutinising specific details. It's important not to accept the numbers at face value and simply feel good about them. Instead, we must dig deeper and seek to understand the underlying causes."
For example, if impressions are high, marketers should analyse whether they translate into sufficient click-throughs and landing page visits, particularly on platforms like Amazon.
Marketers should also evaluate the quality of their creative output and engagement metrics, as having a diagnostic process helps marketers derive meaningful insights from the numbers and guides their decision-making.
"While accessing copious amounts of data is advantageous, we must balance the broader perspective and the detailed analysis," says Nishandar.
"Our focus should be on data-driven metrics that truly matter while also recognising the importance of transparency and acknowledging when things are not working as expected. Ultimately, we aim to prove our competence and evaluate and improve our performance."
When asked what their biggest pet peeves regarding vanity metrics are, Brosgill often questions the significance of likes and shares as he does not believe they provide intrinsic value for a business.
He adds he has yet to observe any correlation between likes and actual returns for an organisation and the real impact of shares. There is no correlation because shares can have positive and negative implications, and it is difficult to ascertain their sentiment. For example, someone may critique a post and distribute it widely.
"It is challenging to attribute value to metrics like click-through rate and engagement from a media perspective. With the overwhelming number of daily advertisements, around 10,000, it becomes crucial to consider the consumer's environment and journey," explains Brosgill.
"Can we genuinely assess whether engagement occurs at a particular moment? Unfortunately, these aspects often become distractions and complicate the evaluation process."
For Nishandar, impressions are another overrated metric because the numbers are visually appealing, impactful, and perfect for presentations.
However, she notes it is often unclear whether they lead to desired actions, which is a challenge because marketers cannot definitively claim that correlation implies causation.
While it is possible to have many impressions, Nishandar points out that website activity may drive conversions, not just the impression from a Facebook ad that triggers the desired action.
"Another aspect to consider is how we differentiate between these metrics and their actual value for us. Some vanity metrics are still necessary because we track them. For example, if I run a campaign in January with a second burst in May and a third run in November, I would like to observe the trends," explains Nishandar.
"However, I also take a medium- to long-term view, assessing whether I'm making the desired progress based on the data I gather for my investment. This is where vanity metrics can be helpful because they provide insights into the effectiveness of my efforts and the value I'm getting for my expenditure."
She adds: "However, what truly excites me is when we can incorporate external data, such as sales information or consumer brand tracking, to understand why many impressions didn't translate into clicks, engagement, or increased interaction with our communications. Diagnostic information helps us identify the underlying reasons. Therefore, connecting these data points becomes crucial."
It is also essential, to begin with clear objectives and define the appropriate metrics to track from the start of each campaign, says Nishandar.
"While metrics like likes, impressions, and views may still have their place, they should not solely determine decision-making. They are not the ones that tell us whether to proceed or not. Establishing this distinction upfront is something we extensively focus on, carefully separating and evaluating these metrics," explains Nishandar.
Taking a contrarian view, Ho says sometimes vanity metrics are still important because they indicate the level of marketing engagement.
At Raffles, Ho says the brand takes a broad-based approach when analysing data, looking at demand generation and conversion metrics. While the marketing channel is often the most expensive, the brand pays close attention to demand generation because it impacts the return on investment (ROI).
However, Raffles also focuses on optimising conversion metrics to ensure high performance. Once someone shows interest by engaging with the brand's social media, visiting its website, and contacting its call centre, the brand strives to ensure that its conversion metrics are excellent. In addition, the brand analyses data to assess abandoned calls, call pick-up rates, and customer satisfaction.
Ho shares an example of how the brand discovered that customer satisfaction was 10 points higher when someone called through its US call centre than by booking directly with the hotels. This difference, which equates to a 10% increase, had significant implications for the brand's bottom line, customer loyalty, brand perception, and long-term revenue generation.
"We used data and analytics to determine that the call centre excelled at selling customers better products and experiences. By effectively selling the dream, customers were more likely to book premium rooms, pre-book spa treatments, and have higher average spending," explains Ho.
"To leverage these learnings, we analyse data from the call centre and other channels to identify patterns and implement strategies accordingly. So, when it comes to vanity metrics, I don't consider them purely vanity. Once you understand the value and role of each metric within your business funnel, they become meaningful indicators. However, one challenge I face is establishing reliable benchmarks."
Ho, questions whether an ROI of 10 to $1 is considered good or 100 to $1, is the desired ratio. Is having 20,000 likes impressive compared to competitors or other luxury brands?
"Defining benchmarks is one of the significant challenges we encounter when determining what's considered good. It often amuses me that, in the past, almost all our marketing campaigns met or exceeded benchmarks. I'd like to know if we set the benchmarks to ensure a successful campaign," adds Ho.