November 02, 2022

The Wrong Metrics

I frequently defer to sports, simply because the data required to understand sports is readily available. Hence, this is an interesting read ... a read about ranking the best college football teams from 2014.

I'm thoroughly convinced that, in e-commerce, we're analyzing the wrong stuff. Our fetish with conversion rates and ROAS is misguided.

So what if you executed a campaign with a 2.4% conversion rate and a 3x ROAS?

Our software tells us to optimize for campaign performance.

What if we optimized for business performance?

There is a major difference between campaign performance and business performance. One method seeks to optimize to help a brand win the week ending November 2. The other method seeks to optimize profit over five years.

Can you see the difference in strategy required to optimize conversions in a week vs. optimizing profit over a five year period of time?

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