fbpx Skip to content

GA4 and Click-Tracking are Vanity Metrics That Limit eCommerce Success

by Tom Bruce, former CFO and 2x agency founder

10/23/2024


Ditch vanity metrics. Choose growth. Channel Measurements

Vanity Metrics Lead to Guesswork

eCommerce brands are used to looking at a channel measurement to drive key business decisions.

I have news for you…

 

Those are vanity metrics

How do I know?

Because those values aren’t accurately measuring what drives your brands’ sales. If you make decisions based upon them, you will fall short of your potential and waste significant ad spend.

channel measurement

 

But it probably is what your team, agencies, affiliates and ad networks are using to make critical decisions.  It is for most brands.  Quite frankly, it is the status quo that was given to you, and every advertiser, agency, and ad tech company have built their business around it! But the channel measurement systems are broken.

Most eCommerce marketers & executives already understand that upper funnel channels are undervalued, and sometimes they lean on ad platform reporting to try to better understand the impact of those ads.

But the discrepancies between these sources are massive.  And often, as in the case above, ad platforms take credit for driving more sales than the brand even made.

 

Google Analytics and Channel Measurements

In working with hundreds of eCommerce brands, we have encountered numerous approaches to accounting for the discrepancies that exist.  We find these approaches are often rooted in a substantial amount of guesswork.  Guesswork and unproven assumptions are no way to run a serious business.

 

How is Channel Measurement Inaccurate?

To answer this, we will focus on GA4 as the primary source of measurement that we are criticizing.  Ad platforms have similar issues, but also aren’t accountable to your P&L at all, and don’t measure channels outside of the ads.

 

Here are common steps of a customer journey that precedes sales: 

The top 4 customer journeys drive new visitors to your site and are likely to drive new sales.

The bottom 3 journeys drive people who were already familiar with your brand and have low influence over causing sales.

Common steps to a customer's journey

Now look at how each of those same journeys are credited in GA4 for driving sales:

The top 3 customer journeys get very little credit for the sales they drove.

The middle journey gets a lot of credit for the sales it drove.

The bottom 3 journeys get high credit, despite not actually driving many sales.

Customers journey according to GA4

 

 

Here is the table with both factors presented:

Only search and shopping ads where someone was not already searching for your brand name have both a high likelihood of causing a sale and get high credit for doing so.

Customer journey where Google wins

 

Ad spend implications

With GA4, ad networks win when they can take a lot of credit for driving a sale.  But 3 of the 4 customer journeys above that take a lot of credit for driving sales are driving sales that often would have already gotten if the ads hadn’t been served.  These drive sales that are largely NOT additive (incremental) to your business.

Does Google care if the sales that follow advertising are incremental to YOUR business?  Of course not, only you care about that.  If Google wants to make more money from you, the most likely course of action is to increase the advertising in the bottom 4 customer journeys that gets credit for driving your sales.

Imagine if Google could take search and shopping ads, combine them and then also add retargeting and brand search into one campaign, and then hide visibility into what they are doing.  They could make a fortune by getting you to spend more on ads that largely aren’t driving incremental sales.  Brilliant!

 

            Oh wait, that’s an exact description of PMax.  😉

 

Do agencies care if the sales that follow advertising are incremental to your business?  Some do, most don’t.  Otherwise, they wouldn’t push PMax so hard.  PMax is the easy button, where they can show you growth in conversions.  It doesn’t matter to the agency if they are incremental to you, unless you hold them accountable to it, and let’s face it, very few eCommerce businesses are doing that.

Social and display ads served to new (prospecting) audiences

Massively under-credited, sorry Zuckerberg ☹.

The ad platforms serving these ads provide their own channel measurement, and it’s wildly overstated in most cases because they aren’t tracking your total sales and how their ads interact with other channels.  They just take credit for driving the sale anytime someone clicked or saw your ad before a purchase.

 

 

WHY is Channel Measurement Inaccurate?

 

In a click-tracking environment (both GA4, ad platforms and many 3rd party attribution systems), sales are credited to clicks that precede the purchase.  Many have long believed that they can alter which clicks in the path are credited with the sale in order to better credit parts of the customer journey that led to a sale.  THIS BELIEF IS FALSE.

I’ve likely touched a nerve with readers who have tampered with changing to first-click, weighted or even Google’s demand-driven attribution.  All of these tools simply change which click(s) get credit for the sale.  But here’s what matters:

 

The click path is incomplete more than 50% of the time.

 

Read that repeatedly until the implication settles in.  I can’t tell you how many times I’ve proven this to people with data and watched them continue to try to rely upon it.  Many analytics pros and marketers who have invested a lot of research and time have deep seated beliefs about attribution, but when they rely on the click path, it’s fundamentally flawed.

The reason the bottom 3 customer journeys from the above table get so much sales credit is that there is no tracked click that precedes them the majority of the time.

The reason the top 3 customer journeys from the above table get so little sales credit is that they are ads served to people who were not in-market.  That means that most of those people who do make a purchase will not click the ad and buy immediately.  They will likely browse around, comparison shop, may switch devices, may delay before making a purchase, and many may not even click the ad at all.  In that process the click path is lost (for a few reasons) so those ads will not get credit for driving the sale.

Only search and shopping ads drive new visitors who are in-market at that exact moment, thus those visitors are likely to make a purchase fairly soon and the ads be credited with the sale.  Many experts claim that Google gives preferential treatment in GA4 to Google Ads.  This is not exactly true.  Some Google ads get the same terrible treatment as social ads.  But search and shopping ads have a short customer journey, so they get a lot of credit.

 

Customer Journey

Guesswork Fixes Won’t Fix the Channel Measurement System

Can’t I just fix this by giving more credit to channels that ARE

upper funnel and LESS credit to channels that aren’t?

That is what many marketers are doing, and it’s directionally appropriate, but it leaves a lot of room for error.  Let me show you why.

I previously spoke of customer journeys, the unique pathways visitors use to learn about your brand, arrive at your site, and complete a purchase.  Here are some of them at right, segmented by ads and non-ad journeys.

The way that sales are under and over-credited is consistent with specific customer journeys.  If we know how sales are reported by these unique customer journeys, we can apply corrective adjustments.

For example, if we know all Branded (not branding) ads are overstated by 50%, then we can apply a 50% reduction to branded ads in each channel (Google, Microsoft).

But you don’t have reporting by customer journey, you have reporting by channel, because that’s what’s available.  And that’s problematic because one

channel often serves multiple customer journeys that are measured with different limitations.

 

 

 

How is this a problem?

 

 

 

 

 

Let’s use the Organic channel as an example.

Organic listings are served to people who search for your product categories and your brand name (among other things).

  • When people search for product categories, they weren’t looking for you, but they found you. You can now get them on your site and drive a sale from a new visitor.  That’s valuable.
  • When people search for your brand name, they are simply trying to navigate to your website. They already knew about you.  This didn’t cause a sale.

Now, let’s say your channel-level report shows $1M of organic sales.  How do you interpret that?

What if I told you ALL of those organic sales were from product searches?

Then organic was super valuable and drove at least $1M in sales.

What if I told you ALL of those organic sales were from searches for your brand name?

Then organic didn’t drive any sales at all.

Now consider that most channels have conflicts between the channel and the customer journey, just like Organic did – see the image below for a better understanding.

 

Customer Journeys versus channels

 

You need to see sales by customer journey, not channel.

These are vanity metrics

Channel Measurement

 

How Is Broken Channel Measurement a Problem for Your eCommerce Company?

 

Your measurement system is the foundation for your business.  If it is based upon channels and click tracking, your foundation is not solid.

Channel-based & click-tracking = inaccurate

I can’t tell you how many times we’ve been told that a brand is crushing it on PMax only to find out upon deeper analysis that PMax cannibalized brand and retargeting ads that provide much lower incremental value.  Similarly, we encounter brands avoiding Facebook prospecting because GA4 says it is completely ineffective.

Spend & allocation

How is a brand to determine the optimal media spend when the channel allocations are inaccurate?  Reporting may show the total sales from media investment at $1M, where its true impact may be $550k, or $2.3M.  There is little chance of optimizing total media spend using click-based tracking.

Channels are often viewed holistically.  A Facebook campaign may have branding, prospecting and retargeting in it.  Not only is it improperly valued by the click-tracking, but it is aggregating 3 customer journey types that offer completely different values and ability to be tracked.  If branding investment is heavy, the channel will look like a complete loser. Allocating spend between channels will not be effective without consideration of the customer journey allocation.  When a marketer or agency says, “we’re crushing it in TikTok”, your reply should be “what part of TikTok, retargeting or prospecting?”

 

Strategy & planning

Without corrected measurements segmented by customer journey, how is management supposed to develop a solid strategy?  It’s not even apparent how much customer acquisition investment is happening as you lack visibility by customer journey.

Reporting between management and marketing is a constant mismatch as management tries to make sense of the vanity metrics that fail to align with the P&L.  “It says here we are getting a ROAS of 8 on Instagram retargeting, let’s ramp that up” might be a very reasonable conclusion from someone in management who doesn’t realize that the valuation is exaggerated due to the issues we’ve shared.

Marketing struggles to provide management a clear understanding of the challenges they face with channel measurement because the reasons and implications are unknown.

Building revenue projections and growth plans is ineffective when the measurements are incorrect.

 

Optimizing channels

Agencies and channel managers are given a channel-level goal and told to execute.  But accountability to the P&L is lacking.  How many times have you ramped up spend and didn’t see a significant increase in total sales despite that channel-level reporting suggested the channel was effective?

 

How Can You Use This Knowledge To Your Advantage?

I’ve shared enough insight to point you in the right direction of how to fix your tracking issues.  I’ll go a step further and share typical adjustment amounts that lead to more accurate reporting for many brands.  But not all.

Customer Journeys with Channel Measurements

 

Here are the impact valuation averages on some key channels.  We came to these through 13 years of testing with hundreds of eCommerce brands.  Our testing is always held accountable to the P&L to ensure real incremental gain – no vanity metrics.

But your brand is unique.  And you must tie this to your P&L or these measures may lead you in the wrong direction.

 

Steps to success:

  1. Segment traffic driving sources by customer journey, not channel
  2. Make adjustments based upon click-tracking limitations by customer journey
  3. Align to your P&L continuously
  4. Branding ads require a unique approach as the benefit period is longer than direct response

 

Our Solution

In the image above, we did not provide data on all customer journey types.  We share information that shows eCommerce brands a better way to organize their data in order to achieve more accurate reporting and an understanding of what opportunities exist for growth.  Our complete methodology is transparent to our clients, unlike the programming logic behind most attribution software tools.

Our Scaling Path software is 13 years in the making and organizes traffic driving channels by customer journey so that we can apply corrective measures to build a custom attribution model for each client.  The garbage input from GA4 and ad platforms channel measurement is converted into a highly actionable and accurate reporting tool, increasing accuracy from ~45% to ~85%.  The learning model increases in accuracy over time.

This is the first and most foundational phase of our 4-phase eCommerce growth process.

 

Adopting A Better Way – Fixing the Broken eCommerce Measurement Systems

 

Developing an understanding of why this is worth doing for your brand

eCommerce brands with >$5M in online sales are welcome to reach out and schedule a call with us to receive an education that is much more complete than what we’ve introduced in this document.  The benefits are very significant once a brand reaches a certain point in media spend and growth.

Change resistance

About half the time we are brought in by the exec team (CEO, CMO, CFO) who make it clear to the marketing team that this change is supported.  The other half the time, the marketing team brings us in and we help them to achieve executive support through an educational process.

Some marketing and analytics professionals embrace the change, others resist, clinging to an understanding or infrastructure that has long been in place.  Ultimately, making this change for your business requires the commitment to do so.

It’s not difficult at all.  Our software and services team set everything up and educate your team on how it works, any changes, etc.  There is no code required on your site.  You can even continue to run things the way you do now, while we show you the insights and changes that can happen to take your business further.  But ultimately you will see the benefit of using the Scaling Path measurement system as your primary source of measurement.  Planning and communication will flow easier.  Results will improve.

Technology and process

Scaling Path is the software that we developed that ingests data from multiple sources, primarily GA4, ad platforms, and supplemental data entry.  We then segment your traffic driving channels by the customer journey type.  This enables you to visualize the sales funnel, enhancing your understanding of what drives sales, but also is a pre-requisite to making the adjustments needed that improve your channel-level reporting accuracy from ~45% to ~85%. This shows you what is truly driving sales, and what is wasting money.

But we don’t stop there.  Our goal is not to provide a better measurement system, it is to improve your performance, to take your business further.  In addition to the improved channel-level reporting, we provide a recurring analysis of optimal spend levels in total and your opportunities to allocate spend differently across channels.  We offer advisory services around revenue projections and modeling that originates from your attributed sales data.  Everything is tied to your P&L, so you can be sure that gains are incremental to your business.

Conversion Path is an eCommerce growth agency.  Corrected measurement and sales funnel visibility is the foundation for building a better strategy and achieving more with your media spend.

Clients who use our Scaling Path software perform better and stay with us longer.  We lean into that fact and offer highly discounted rates for users of our measurement solution who also use our ad management team or other services.

 

 

What we offer eCommerce brands:

  • Scaling Path channel-measurement software & services
  • Ad management
  • Branding strategy and value proof model (where benefit period is long-term)
  • Creative strategy, services and testing
  • Revenue modeling and goal-setting for subscription and high-LTV brands where ROAS fails
  • Accountability to your P&L
  • Growth and sustainability strategy

 

Ditch vanity metrics. Choose growth. Channel Measurements

Contact us today at sales@conversionpath.com to schedule a demo.

 Follow Tom’s LinkedIn profile to stay up to date. 


 

QUESTIONS?
We’d love to help.
Fill out the form to
get in touch now!

    Back To Top