What are performance metrics and why are they important?

What are the most important performance metrics for advertisements on social networks?

• Common ones are CTR, Click to Install, ARPU, ARPPU, Viral Coefficient - any others?  Do people have other ways they think about or measure performance?

• Answer:

  suggests the following metrics in the context for a startup business in general; but you can easily apply it your social network advertisement channels: Slide 33: http://500hats.typepad.com/500blogs/2010/01/startup-metrics-for-pirates-lean-startup-circle-jan-2010.html . Key takeaways Dave defines: ATV - Avg Transaction Value (not the television, Apple TV, or the 4-wheeler). In context of social games, I have seen a variation of this denoted as ARPPU - Average Revenue Per Paying User ARPU - already mentioned CLV - Customer Lifetime Value (I have also seen it denoted as LTV) FYI - however you define these numbers/ratios, you're fundamentally looking for AARRR.  Create your own metrics/measurements that apply to these principles: Slide 21: AARRR Acquisition Activation Retention Referral Revenue When you have set some benchmarks, you can start doing more A/B testing on many different fronts, and break apart your campaigns for different goals. Conversions on Creatives Conversions on Call to Actions or Copy Conversions on Promotions/Discounts Conversions on Virality (Coefficient/Virality) Conversions on Leads Conversions on Targetting (Demo/Interests/Category/etc) etc. A good funnel analysis will help you identify dropoffs - sometimes seeing the whole picture makes a difference.  Read this from the Mixpanel's co-founder : http://blog.mixpanel.com/3-new-ways-to-measure-the-social-web-11 For example, a user coming in from an ad may not be at fault for low conversion, something else going on is stopping user from converting (example: terrible registration process, poor landing page, difficult payment, localization issues, broken code/bugs/browser incompatibility/device incompatibility).