Split-funnel analysis: What it is and how to use it
May 17, 2023
You may have heard them mentioned, but what exactly are vanity metrics? The name alone suggests superficial measurements that you shouldn't take too seriously. But are they all bad, or do they have their uses?
If you’re looking for a straightforward definition of vanity metrics, Tableau, the visual analytics platform, sums them up succinctly:
'… metrics that make you look good to others but do not help you understand your performance in a way that informs future strategies. These metrics are exciting to point to if you want to appear to be improving, but they often aren’t actionable and aren’t related to anything you can control or repeat in a meaningful way.'
Essentially, the way we see it is that vanity metrics are statistics which can be seductive. They appear great on paper, but if you try to use them to explain key business drivers, such as return on investment (ROI), they fall flat on their face and can't prove your marketing is generating revenue.
This can be confusing, as vanity metrics may appear to indicate success and growth, but the statistics alone don’t correlate to vital business goals, like revenue generation.
That’s all well and good, but how do you easily uncover a veiled vanity metric? Well, some significant signs that you’re dealing with such a measurement include:
If you’re in doubt about whether you’re dealing with a vanity metric, ask yourself a few searching questions about your data. Firstly, what business decision will the metric help you make? Will it lead to a course of action? If not, then you may need to re-evaluate its usefulness.
Finally, you need to ask yourself.
'Is this metric really reflecting the truth, or has it been manipulated in any way?'
Choosing the metrics you report on carefully is crucial, so you have reliable information that gives you actionable insights to work from.
However, it’s also worth remembering that defining a vanity metric in this way can be subjective, as all metrics can fall into this category if you neglect to contextualise the data. Even potentially valuable, actionable metrics can become vanity metrics if you don’t assess the connotations of the figures with analytics tools.
There are various issues with vanity metrics you need to be aware of. For instance, they can tend to operate in a marketing silo. And the actual value of this data outside marketing, for achieving business goals, could be limited.
It’s easy for marketing to get caught up in the glamour of a superficially impressive statistic, such as a skyrocketing number of social media likes, without it benefitting the business goals as a whole.
A significant problem with vanity metrics is also that they can be easily gamed. For example, social media metrics can be manipulated with some extra paid spend. Marketers can just pay to boost their followers, making this a highly unreliable metric to trust.
Although it might be a big ego boost to see that hundreds of thousands of people follow your brand on your social media accounts, this doesn't mean a great deal if those numbers don't equal any extra sales.
The bottom line is that such vanity metrics may look amazing but are bringing no benefit to your commercial success.
As mentioned, any metric can become a vanity metric without the necessary analysis. However, the following are some of the most common examples of metrics which tend to be vanity metrics.
While all of these metrics can look spectacular on the surface, if the figures are high, when they fail to correlate to solid business objectives or the company’s bottom line, they fall into this category.
A vanity metric can be rather inconsistent and superficial by nature. It can also be misleading and not offer any concrete guidance to help improve your products and company. Actionable metrics, in contrast, are clearly defined measurements aligned with your business goals, and provide insights which enable you to make informed commercial decisions.
A vanity metric can tend to lack substance and may lead a strategy off course, if too much importance is placed on it.
An actionable metric, also referred to as a ‘real metric’, can be relied on to represent real change or progress.
In essence, vanity metrics may show some sign of success, but they don’t supply reliable guidance for you to base your next business steps. Actionable metrics can be used to inform better business decisions.
Vanity metrics shouldn't be viewed as universally ‘bad’, despite the distinctly negative connotation of the name. They do have their value when used appropriately.
Vanity metrics such as likes, impressions, and traffic can be helpful in measuring non-commercial marketing goals, like social media engagement, organic search positions, and brand awareness.
The problem with vanity metrics comes when you use them as evidence of overall business success. For example, the number of likes or shares you get from a social media post, if considered without analysis, is unlikely to correlate with closed-won revenue.
Similarly, the vanity metric of visits to your website only provides part of the story. There is little point in counting this alone as proof of success unless it’s matched to a business objective. While you need the traffic to convert, more visits don't automatically equal more conversions.
Whilst they may not be useful for indicating business success, vanity metrics can still be an effective measurement when used correctly and in the right context.
Here are three ways you could use vanity metrics effectively:
Some metrics considered 'vanity' can be used to show early signs of success when your metrics further down the funnel need time to show impact. In the early stages of new marketing programmes, it's important to have metrics that show progress and momentum.
Metrics such as engagement, impressions, and clicks aren't the most accurate reflection of business outcomes, but they can provide an indication that you're on the right track. For example, if you start running live events and you're not yet seeing opportunities from these, a good level of engagement from your ideal customer may show you that the content is resonating and just needs time to build brand affinity.
While it's important to keep in mind that these metrics don't necessarily equate to revenue or business growth, they can give you a sense of progress and indicate you're on the right track.
Metrics like engagement and clicks can be useful at a granular level to show an element of a campaign that's working well.
For instance, if you're running a social media campaign and one post generates significantly more engagement than others, it may suggest that the messaging or visuals of that post resonated with your audience.
You can use this information to refine future content, and ensure that your messaging aligns with what your audience finds valuable. Similarly, if you're running multiple versions of an ad, looking at engagement and impressions can help you determine which variant is most effective, allowing you to allocate your resources more effectively.
Vanity metrics when used in conjunction with actionable metrics guide strategic marketing decisions. While vanity metrics may not be the most important metric, they can provide context to other data.
For example, if self-reported attribution is telling you that you captured 25 new MQLs through your podcast, you could use vanity metrics to understand which episodes had the most downloads and listening time. This could give a good indication as to which episodes resonate most with your audience.
Ultimately, vanity metrics aren't bad, but there is a time and place to use them.
When you're reporting to senior stakeholders, we would recommend removing the focus on vanity metrics and talking the same language as your peers. This means measuring marketing on business outcomes that all functions can relate to, such as:
In episode 3 of Demand Decoded, we explored the challenges that marketers face when it comes to demonstrating their value to top-level executives. Our speakers discussed strategies for overcoming these obstacles and making a compelling case for marketing's importance within the organisation.