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Comment by notlisted | Hacker News Reader

I think there's more to it than referrer spam: unscrupulous SEO/SEM people artificially pumping up their performance to justify their rates.

A friend's analytics showed an amazing number of visits for a tiny site. While traffic was up, it did not lead to new clients. She fired the company she'd engaged for SEO/SEM because they kept raising their rates as traffic milestones were reached (hundreds of dollars a month).

Immediately after terminating that relationship, she noticed a 95% drop in traffic and panicked (see http://i.imgur.com/WwJ0vYo.png ). I was asked to fix it for her. One look in the referrers showed that this 95% all originated from China (ads.acesse.com) and was useless/fake (very few page views, very short durations). While we have no proof to support a lawsuit, the timing was too much of a coincidence to ignore.

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The moral of the story is that all targets will be gamed, so only ever target against revenue or something incredibly close to it.

Revenue is the most famous of the easily gamed. Target free cash flow.

Errr - can you explain. I would like to increase my revenue by 20% if you have a simple solution I'm all ears!

I increase revenue $1 and increase expense $1.50. If you target profit I could increase profit, but you take 18 months to collect. Free cash flow targets revenue, leading to profit that is collected ahead of expenses. Their may be a more technical definition, but thats the gist.

Drop your price by 50%. Or start selling dollar bills for 95 cents - bet your revenue numbers will go off the charts.

I think that's what the previous poster is getting at - getting a lot of revenue isn't hard if you're willing to throw core parts of your business under the bus (say, profitability).

More generally though optimizing for any kind of financial target (whether revenue, profit, or otherwise) can still be gamed like any other metric.

Your salesperson promises the moon to a client, closes a bunch of deals, looks great, and your company takes on a boatload of liability in the process - for example.

Or, to take a real life example - drop the price of your software to 99 cents and ride a huge sales wave but find your clientele unwilling to pay anything more than 99 cents from then on (hellllo mobile apps).

Lots of ways raw revenue/profit isn't by itself a great metric.

Ah - I may have been looking at the wrong end of the conversion funnel - I was thinking more on the lines of how do I find new leads at all?

Oddly I was reading how Buffets first insurance company was focused on writing profitable premiums only - to the extent of seeing shrinking business. It was unusual then and now, so I do take your point.

Are the relative rankings in search results (e.g. moving from 25th to 15th or 2nd to 1st) for a set of pre-defined searches considered poor metrics?

Sure it will be hard to determine if the improvements are due to the cause of SEO or some other update, but using revenue as a metric has the same issue.

(Ideally one would use a "difference in differences"[1] approach, but it could be difficult without good comparators).

[1] https://en.wikipedia.org/wiki/Difference_in_differences

Any metric that you choose will have the same problem. The metric may improve over a period because of actions that you take, or they may improve because of something entirely unrelated. This is an important thing to be aware of.

However, there is another problem with metrics. Sometimes, it is too easy to pay too much attention to vanity metrics that won't add anything to your bottom line. Will moving from a 25th place to 1st place for a search help your business? That depends - does that search generate traffic, and does that traffic generate revenue? On the other hand, increasing revenue is never a bad thing.

I'd argue that unless decision makers have too much time on their hands, they're better off focusing on metrics like revenue than metrics like search results. Validity will be a problem across all metrics, but at least there isn't a tendency to optimize useless metrics.

Except my job is to get you traffic. I don't control how good or crappy your product is. So the biz can think of it in terms of rev but not fair to pay the SEO person on it

I have been doing Internet marketing a long time. Optimizing for rankings/position is a waste of everyone's resources for a number of reasons.

1. The keywords you want may be worthless 2. Google/Bing/Yahoo stopped sending the keyword data about a year ago (so you have almost no insight into what keywords did what

What is important is driving meaningful traffic. This usually means increasing visits that increase revenue.

Here is the hard part, besides ecommerce sites, most businesses do NOT track at the level needed to know.

Even if you educate people, there is a tiny set that actually care to track and an even smaller set that actually put in the effort to do so.

A lot of people still care about the vanity side. "I am #1 for <keyword>"

Pay for Perforamce marketing only works if you close the loop. And even then it's a hard to do and may not be best for everyone

To me, it does sound like your friend was a victim of fraud.

So, what levels do you need to track at?

Let's say I am selling a saas service, Facebook for dogs. I advertise on keywords like "share my puppy pics". Each keyword hits a different landing page. I track users with a cookie

Is there any more or less to do?

Do you also track churn and lifetime user value based on the keyword or source that brought the user to your site? Not all page views or users are created equal.

Missed your response, yes she was. She was told that she would get better positioning (which she didn't) and receive loads of extra traffic (which she did), but none of that traffic was qualified traffic (that converts).

By the way, she does not sell a product, she sells a service (herself) and that's a little more difficult to track.

Hence why business owners need to be educated that "all the traffic" is worthless if it's not making you money. Vanity metrics are called thus for a reason.

Disclosure: professional marketer and former FT SEO who is tired of people getting fed snake oil.

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