(Cross-posted from the Klick health blog.)
With Apple’s new iPhone announced, one reaction is predictable: critics will benchmark the iPhone against competitors and scoff at its inferior numbers—higher price, slower processor, less RAM. Given Apple’s history, here’s another prediction: iPhone fans won’t care, and Apple will sell several million units in days.
Despite such potential for misleading conclusions, benchmarking is essential to contextualize performance. So it’s inevitable that when presenting analytics data to clients, we must answer the question: “Are these good numbers or bad?”
Unfortunately, the answer isn’t always simple. Like the iPhone’s detractors, it’s easy for us digital marketers to focus on the wrong metrics and lose sight of the big picture. And so, in the spirit of iPhone announcement season, here are some benchmarking tips to avoid that fate.
Focus on meaningful metrics
What’s the most meaningful metric for evaluating an iPhone’s performance?
Ultimately, it’s not processor speed or storage capacity. It’s units sold, which is an indication of the product’s fit with its target market, and Apple’s success at everything else that makes a product successful—from marketing to customer support.
Obvious, maybe. But it’s easy to obsess over superficial, inconsequential or excessively granular metrics at the expense of overall success. This is because what’s easiest to quantify unduly influences what gets measured, and what’s easiest to analyze unduly influences what gets optimized.
For example, take click-through rates. They can certainly indicate an advertising campaign’s success. But is a higher than average click-through rate always good and a lower bad?
Truth is, it depends. If your goal is converting clicks into, say, registrations for an email newsletter, you may accept a lower click-through rate if it means higher quality registrants. More meaningful metrics than click-through rate might therefore include conversion rate or cost per conversion. But these are harder to measure, analyze and benchmark, since offers, calls to action, landing page designs and media costs can vary substantially.
Ease of benchmarking, however, shouldn’t dictate what gets benchmarked. Don’t lose sight of the forest for the trees.
Choose the right comparisons
Once you’ve identified meaningful metrics, your next step is choosing comparisons.
Apple is a master of shaping this conversation. Rather than comparing the speed of itsprocessors to that of its competitors, for example, Apple highlights performance for tasks that users care about, such as the time it takes to render graphics. It also emphasizes improved performance of new products versus old, to demonstrate concrete improvements to existing customers and justify upgrades.
These are benchmarks that drive Apple’s business. What about for digital marketing? In my experience, digital marketers emphasize cross-industry averages (for example, the 0.09% click-through rate average for display ads) and sometimes intra-industry averages (for example, prospects who visit a branded pharma website are on average 8.9% more likely to start the treatment).
These aren’t necessarily the most useful benchmarks. But they’re the most available. What’s less common, but often better, is benchmarking against market leaders within your therapeutic category, and—like Apple—against your own past performance.
For example, TGaS Advisors aggregate, anonymize and make available data on the performance of pharmaceutical digital marketing, including peer-to-peer comparisons. For historical comparisons, most analytics platforms (including Google’s free tools like Analytics andTrends) allow past performance benchmarking.
Of course, better benchmarking alone won’t help you achieve Apple-level success. But at the very least, you’ll have a more meaningful understanding of your digital marketing’s efficacy, higher-impact targets for optimization—and better rebuttals to your detractors.