Asymmetrica  Labs

Perspectives

Metrics traditional view that consumption is best

Metrics – The traditional view

category November 20, 2017

Asym works by increasing the quality of attention. Quality of attention is a challenging metric that does not always fit into a traditional view.

This post is the third in our series on metrics. It highlights the value placed on consumption metrics and brings in examples of specific situations where consumption metrics may be poor indicators of success.

The other posts in the series provide different perspectives on which metrics are most valuable. The first post looks at a Harvard Business Review article on how Tesla shows existing metrics are outdated. The second post helps make sense of metrics by grouping them into 4 broad categories. The fourth post considers the balanced view, with each metric contributing an equal measure to business success. The fifth and sixth posts look at the business view, and the ‘what pays the bills’ view, respectively.

 

Start with consumption

The easiest way to look at metrics is to predict maximizing consumption will maximize sales. There is a logical flow to assuming that the more people get in at the start of the process, the more people will finish at the end of the process. Starting with consumption as the foundation is an idea with clear merit.

 

Metrics traditional view that consumption is best

 

Do consumption metrics work?

For companies that get paid purely based on consumption metrics, this category clearly wins. Ad-based business models where revenue is directly linked to page views are an example here.

For companies where revenue is NOT purely generated through ads, there are 3 key elements that make this model work or fail.

In hindsight they appear obvious, yet in business practice these situations can often occur.

 

(1) Most clearly, if consumption metrics improve but sales are relatively unchanged, this model appears weak.

An example would be getting significantly more page views and dwell time. This often occurs as sites become optimized for mobile. If the viewers are there to kill time or avoid boredom (as is often the case with mobile users), more is not necessarily better. Without more sales, the increase in one category of metrics does little for business success.

(2) Less obviously, if consumption metrics are poor yet sales do well, this model appears weak.

This situation can occur in situations where many site users are poor sales candidates. When most of your users have no intention to buy, more users is not necessarily better. The core group that are actually potential buyers make it through to sales while everyone else loses interest.

(3) Finally, if consumption metrics fluctuate but sales remain steady, this model appears weak.

This pattern occurs when again there are many viewers but the quality of their attention is poor. If thousands of people periodically head downtown to watch sporting events, sites can get surges in traffic as those thousands of people dive onto sites out of boredom while on public transit. The boredom-motivated users provide noise, while the few that are interested buyers and actually do pay attention keep the business afloat.

 

Consumption counts less than quality of attention

Consumption skews reliably higher on mobile. If metrics based on consumption are the drivers for business strategy, its clear that investing in mobile is the right choice.  But consumption on mobile brings with it a more noisy and distracting environment, one that hurts the bottom line. Metrics based on revenue from sales reveal a clear picture. The least distracted users are almost 3 times more likely to buy when compared to the most distracted users.

 

Metrics based on revenue from sales reveal a clear picture. The least distracted users are almost 3 times more likely to buy when compared to the most distracted users.

 

Mobile conversion rates worse than desktop

 

In practical terms, that means if the mobile audience was twice as big as the desktop audience, the desktop audience would still contribute significantly more to profit and sales.

 

In practical terms, that means if the mobile audience was twice as big as the desktop audience, the desktop audience would still contribute significantly more to profit and sales.

 

Summing up

For companies selling page views, consumption is king. Consumption metrics work.

For e-commerce companies or other companies where messages matter, consumption is golden only when the right people – in the right frame of mind – are consuming the content. If it’s the wrong people, or the right people but in the wrong frame of mind—they may be paying distant attention to your site on their smartphone as they try to balance standing on a train without getting to close to the stranger next to them—consumption metrics can be a poor indicator of future sales.

 

If it’s the wrong people, or the right people but in the wrong frame of mind, consumption metrics can be a poor indicator of future sales.

 

Which makes indicators about frame of mind crucial to finding the right metrics to build business success. How much quality attention is being directed to your content?

The next article presents a less traditional approach that reveals the value of ‘stacking’ metrics.

 

Chart is from the latest Adobe Mobile Retail Report.


Asymmetrica Team
Tags: , , ,