Why Metrics Matter
Daring Fireball quotes some interesting research findings related to what Barry Schwartz dubbed The Paradox Of Choice.
About 60% of the people stopped when we had 24 jams on display and then at the times when we had 6 different flavors of jam out on display only 40% of the people actually stopped, so more people were clearly attracted to the larger varieties of options, but then when it came down to buying, so the second thing we looked at is in what case were people more likely to buy a jar of jam.
What we found was that of the people who stopped when there were 24 different flavors of jam out on display only 3% of them actually bought a jar of jam whereas of the people who stopped when there were 6 different flavors of jam 30% of them actually bought a jar of jam. So, if you do the math, people were actually 6 times more likely to buy a jar of jam if they had encountered 6 than if they encountered 24, so what we learned from this study was that while people were more attracted to having more options, that’s what sort of got them in the door or got them to think about jam, when it came to choosing time they were actually less likely to make a choice if they had more to choose from than if they had fewer to choose from.
A fascinating psychological effect with clear implications for display advertising, but there is a lesson here for online marketeers and analysts as well.
In this study, fewer people stopped when there was less choice, but more people actually bought something. If we were only measuring the former (i.e. attention), and not the latter (i.e. sales), we would be led to think more choice would be about 50% more effective at bringing in customers. And boy, would we be wrong!
Metrics matter; especially when you are using a system which can automatically optimize your process in order to maximize those metrics.
Don’t get yourself in a jam; remember this next time you decide to measure click acceptance instead of actual sales to drive your online marketing effort. Clickthrough rates are useful as a measure by proxy, but they can be misleading.