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Plus Report - By Thomas Baekdal - July 2012

The Future of Analytics And The Trend of Demonstrable Causation

The Trend of Demonstrable Causation is completely changing everything we used to know. It is invalidating the very foundation of which we today measure interactions. You cannot fix this by adding features.

There are two extremely important trends happening in the world of analytics. The first one is the Trend of Demonstrable Causation. The analytics world has realized that it simply isn't good enough just to look at an activity between points. Call it the no-bullshit-analytics, where each result must be based on real people, doing real things, and for real reasons.

We see this trend all around us. In Google Analytics we now have incredibly advanced tools around conversion funnels and goal tracking ...and even more fun when it comes to custom reports. And analytic tools like KissMetric take it a step further.

We are starting to see the same in social analytics. In the past, most social tools only measured activity (which produces useless results), but now we are measuring people. Facebook Insights, for instance, doesn't measure views, it measures people who viewed. It's a small but very important difference. For instance, if your post had 800 views, but you only sold 2 products, you might think you only had a 0.25% conversion rate. But if you are told that those 800 views were actually only 40 people, your conversion rate is suddenly 5%.

It's the same data, but one focuses on activity (views) while the other focuses on people. One is meaningless and widely misleading. The other is relevant and valuable.

Of course, Facebook is far from perfect. After many people complained about how they use EdgeRank to force people to buy promoted posts (myself included), Facebook decided to remove the stats that indicated just what percentage of your fans is seeing your posts. Not a good move by Facebook. One should never remove relevant analytics just because it's 'inconvenient'.

But the Trend of Demonstrable Causation is very exciting, but it's also troubling for many businesses. Once you start focusing on the real cause of data, you will also find answers that you don't want to hear.

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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