Last Word: Vanity Metrics, Show, and Flash
A respected VC wrote must read blog on vanity metrics in the eCommerce startup space. By design, eComm startups aren’t glamorous. The general public only knows brands’ top line revenue if reported. Generally, traditional ad buys don’t lead to a brand lift. According to the data, it’s all about the online basics: customer service, smart ad placement, and a feel for frequency.
The key to sustainable eComm growth has always been: conversion optimization, strong margins, primed buyers, and a meaningful LTV (lifetime value).
Once these basics are met, true data-driven marketing can begin. While each brand is unique, here are a few insights found in the top 1,000 online retailers:
- The 10 biggest spenders on SEM grow faster than average online retailers. The average monthly spend in the top 1,000 retailer is $224,000. Customers, attracted by SEM tend to lead to increased LTV and improved average order value (AOV).
- The 10 smallest spenders on SEM are growing faster than the top spenders. Word of mouth advertising seems to be working for them. Average spend for the bottom ten? $79 per month. J. Hilburn, for instance, has achieved 40% growth in 2015 to drive $84,000,000 in web sales. With a minuscule SEM spend of $44/month.
- The top 10 senders of email marketing achieved the lowest growth in business earned in 2015. The average volume of emails for this group? 60 / month. The average growth for these companies? 9.3%.
- The bottom 10 senders of email marketing grew faster than the top 10 senders: 12.8% on an average monthly send of four emails.
- Facebook audience was positively correlated with the top ten fastest growers. Average Facebook following in this group? 17,331,563. Average growth in 2015: 18.6%.
- The bottom ten in Facebook audience grew at a paltry 5.6% in 2015. Average Facebook followers in this group? 660.
- Twitter followings didn’t much effect the variance from the average growth in the top 1,000. The top ten followings (average 4,227,773) grew at 15.9% in 2015 and the bottom ten (average 339) grew at 13.4%.
Traditional advertising, sponsorships, and event marketing were not measurable. Though there may be a positive correlation between these marketing tactics and brand equity / halo effect.
See more of the issue here.