Editor's note: The following is a guest post from Shaul Olmert, co-founder and CEO of Disney-backed storytelling platform, Playbuzz.
Key performance indicators are the North Star of every company's operations. These high-level metrics are indicators of success that can provide businesses with evidentiary support of high performance, acting as the catalyst to additional funding, being acquired, increased partnerships and, above all, directing planning and operations.
But publishers' insistence to uphold archaic KPIs has ultimately contributed to the volatile environment of reduced resources, hurriedly pivoting to the latest trends without consideration for readers with an unabashed emphasis on their bottom line. And Facebook's recent algorithm change deprioritizing posts from publishers and brands doesn't help the situation.
Though many would argue that profit is the ultimate indicator of commercial success, it's not the only one.
What once was
At earlier stages of a company's development, secondary indicators of success are defined. In media, these can include volume of web traffic, market share, number of unique users or number of advertising partners. If these numbers are rising, the assumption is that growth and sustainability of these indicators shows that the company is headed in the right direction. These indicators ensure employees work toward the same goal and become crucial to a business's ability to "tell its story."
And therein lies the problem.
Developing a culture that is so hellbent on an abstract concept that supposedly captures true substance can blind us from seeing that these indicators have become a box to check rather than ones that drive meaningful results. The urge to show growth and sustainability of such indicators often hinders us from pursuing the actual substance we're truly after.
Shoulda, woulda, coulda
For publishers, this holds true when looking at the emphasis placed on clicks and page views which should hold less meaning today than compared to a decade ago. Key word there: should.
Over time, the obsession with these indicators led to working overtime to inflate them to the extent that the media environment is drunkenly aware that these KPIs no longer hold the substance they were meant to represent in the first place. And thus, growth in clicks and page views often means lack of growth in material substance of other crucial pillars of publishing that have been somewhat pushed aside, such as audience engagement and innovative monetization of content.
The urge to show growth and sustainability of such indicators often hinders us from pursuing the actual substance we're truly after.
Playbuzz CEO and co-founder
The challenge we now face is revisiting and reassessing these KPIs to ensure they actually serve a purpose. To put it simply: If individuals have changed how they consume content, why haven't our indicators changed along with them?
It's time we speak a new language
It took us time here at Playbuzz to come to this conclusion. For instance, we previously measured the number of page views generated by readers consuming publishers' Playbuzz-powered content as the indicators of our reach, market penetration and popularity. We worked around the clock to grow the business and relied on the data reflecting an increase in page views as proof of that growth.
It was only during an M&A discussion we held with a similar, smaller startup that I realized how these KPIs are not only misleading us and our investors, but how they also prevent us from truly growing our business and most importantly, theirs.
Back then, we defined page views as every time an article created using Playbuzz loaded on the browser of a reader on any of our partners' sites. That number was measured in billions, and we were thrilled to see how our efforts of supporting our partners' content authoring helped drive this metric upward.
Our investors were ecstatic about the obvious linkage between this growth and the alleged growth of the company's market value, and we all became addicted to tracking these data points and watching our charts rise to the upper right corner.
However, what we hadn't realized until that meeting is that while we tried so hard to push page views, we grew them without growing the actual value they were supposed to represent.
Quality > quantity
At the time, we loved when partners that used Playbuzz to craft interactive content would embed that content directly on their home page because as a result, every time a user visited their home page, they were theoretically exposed to a piece of Playbuzz-powered content, and our analytics system counted an additional page view.
But clearly, that interaction didn't mean much.
In reality, only a few of those users who visited the home page actually interacted with the Playbuzz-powered content. So while the KPI grew, the substance behind it of having content generate meaningful user engagement didn't grow. It was only when I sat down with the founder of the company we were considering acquiring that I realized both of us were showing off to one another with huge numbers that, though factual, were meaningless.
The other founder praised their growth in page views, and I in turn began to investigate the source of their growth. It became obvious that this company was good at generating page views, but not as good at generating value to their partners and end users. Therefore, the number of page views the company reported wasn't an asset I was willing to pay for, which made me question why it was still an indicator keeping me up at night.
When I came to this realization, we redefined our KPIs to count only instances in which the end user actually interacted with Playbuzz-powered content, effectively slicing our page view metric in half overnight.
Though it was difficult to grow accustomed to a smaller number, that number now had substance.
From that point forward, we focused our efforts on pursuing real engagements rather than impressions, transforming our offering into a platform where publishers could create interactive, visual-first articles to boost audience engagement, leaving that arbitrary number of many digits — but little meaning — in the past.
It's time you follow suit
For publishers that want to show strength to acquire more investors, partners, clients or employees, it's tempting to stick to a KPI that looks impressive. However, this tactic ends up backfiring, resulting in a business offering that's diluted and trivial.
Remember that even the most inundated industries are in need of the most disruption. Don't be afraid to speak a new language and challenge the status quo as you forge ahead.