I love numbers. I’ll play puzzle, logic, or strategy games until the cows come home.

Numbers can also be reassuring. For this reason, developers tend to analyze all the metrics they can get their hands on. Some of these metrics have little bearing on the performance of their game or app — they’re the equivalent of judging the length of winter by whether or not Punxsutawney Phil sees his shadow.

When setting up analytics and event tracking, it is imperative to think critically about what it is you look to gain. For small studios without a dedicated data analyst, tracking too much or inefficiently can drown you in data overload. For larger publishers and advertisers, it might make sense to keep track of all the data you can, but this can easily overwhelm a smaller operation.

At a high level, almost all developers want to use analytics to increase engagement, retention, and monetization. With these end goals in mind, here are six event metrics that aren’t critical in measuring the performance of your game. (Non-game developers can also apply some of these tips to their apps as well.)

Menu clicks

Knowing that a player tapped on menu buttons (or pause or mute) won’t yield significant insights toward fine-tuning the important stuff: retention, engagement, and monetization. One potential counterpoint is tracking when a user visits the store, but even seeing this is unnecessary. Your storefront should be easy to reach –- a single click away from any screen -– without being in the user’s face.

More relevant monetization metrics like Conversion Rate and Average Revenue Per Daily Active User (ARPDAU) from in-app purchases will let you know if users can find the store easily — and if they value the currency.

Use of consumables

Developers often measure the success of their game by tracking how their gamers use in-game consumables such as power-ups. This shows the developers if users buy a bunch and keep them for later or if they use them right away.

As far as consumable in-app purchases go, the most important element is that users buy the power-up. It’s not as relevant whether someone buys consumables and hoards them for later use or buys a few and uses them right away. However, if you’re using predictive analytics to push a promotion when someone runs out, it’s a smart tactic.

Viewed, cancelled, and failed purchases

A failed purchase is a quality assurance issue that should be fixed before your game goes live in its proper marketplace. Viewed and cancelled purchases will be reflected by weak monetization metrics. More importantly, these numbers don’t provide you with the user’s intent. Is it the unconvinced user checking out what items exist in the game, or is it a potential buyer who needs more currency? Unfinished purchase data often raises more questions than answers.

 Overly specific game mechanics

It’s a safe assumption that if you make a racing game, your users will be changing gears a lot. Everyone, from the payers and the non-payers, tends to shift up in racing games. You will not be able to segment those who have executed the event “shift up” and compare them to the few players that immediately bounced after download.

How often users quit or retry certain levels

If there is a problem with balancing a certain level or quest, a basic funnel will quickly identify this. All you need to track the steps of users through each level to completion. Numbers regarding quits and retries will only muddle your event tracking.

Game ratings

Developers with the bandwidth to keep track of user ratings will probably want to do so through whatever marketplace it’s available in. Although ratings can reflect a lot for developers, they’re often hard to take away an actionable response from. This is another example of a data point that can create clutter.

The mobile space as a whole is making great strides toward creating fun experiences with great content. Analytics, game data, and understanding user behavior are incredible complements to game design and creativity. Don’t be afraid to start using an analytics product, and don’t overwhelm yourself or your team tracking unnecessary data points. If you can’t prove something with the metrics you are tracking, you should not be tracking those metrics.

Trevor McCalmont joined NativeX in June 2012 as part of the Games Task Force. Trevor brings a wealth of statistical and analytical knowledge, graduating from Macalester College with a degree in Applied Math and Statistics. Other than numbers and gaming, Trevor has a passion for playing baseball and classical piano.

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July 9-10, 2013
San Francisco, CA

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Editor’s note: Keynote Systems’ Startup Shootout Index provides some insight into the three-screen challenge — desktop, smartphone, and tablet — now facing anyone with a web presence. We’ll be bringing you a fresh set of data from Keynote every month. Check out previous Startup Shootout results.

New technology allows us to take an even closer look at the impact of Web performance on the desktop user experience. Rather than simply measuring the time it takes for the entire page to load, new standards allow us to capture details about how long it takes for the visitor to see something change in the browser and how long before a visitor can begin to interact with a page. These are important points in the user experience, which mean that not all load times are equal. Let us explain.

For years, Web sites have used monitoring services that provide an external perspective of performance by measuring complete page load times. However, this doesn’t represent how well a user’s Web browser is actually assembling that content or how soon the user can begin to interact with the page. We also know there are many ways to assemble and display content on a site – some methods are better than others.

New industry standards supported by modern browsers like IE9, Chrome, and Firefox can reveal performance more holistically—based on users’ true experience during the page load. The browser itself now saves timestamps from various events in the process of loading a new page, including timestamps for the starting and ending of phases to help measure:

• The first point at which the user sees something other than a blank screen or the previous screen (“Time to First Paint”)

• When a page can be clicked, swiped and scrolled (“Time to Interactive Page”)

• The total time a page takes to load all assets on the page (“Total User Experience Time”)

As an example, imagine you visit two sites, each with a page load time of five seconds. If site A starts delivering content in half a second and site B doesn’t start giving you any content at all until four seconds, your perception of site A will be much more positive even though both sites have the same overall five second user experience time.

Rovio, where art thou?

On the Keynote Startup Shootout Index, digital entertainment media company Rovio has a woefully slow desktop response time of 7.75 seconds. Given its stature amongst the mobile device user community, it comes in with an also unimpressive 5.71 seconds on the iPhone and 6.59 seconds on the iPad.  Users have high expectations today; sites like Rovio should be aiming for two seconds end-to-end page load times for the desktop and no slower than six seconds end-to-end page load times on 3G mobile networks. Rovio’s desktop site could definitely be faster than it is. We were surprised at some missed opportunities and failures to follow best practices.

Time to Paint

In addition to slow end-to-end page load times, Rovio is also showing a very slow time to first paint. We are seeing over 63 elements loading before the browser is able to render any content on screen. This includes 15 JavaScript files, five CSS files plus four custom font files (few websites use custom fonts, in part because of the effect they have on performance, as the site might need to load fonts before its initial render).

Compression

Interestingly, Rovio is also not using gzip compression on all the elements that are compressible. All modern browsers support gzip compression, which shrinks file sizes for transfer over the network before decompressing them to use in the browser. If the Rovio site were to use gzip on all page assets, many files could be 60-70% smaller, again helping to speed performance. There really is no reason not to do this.

Image Bloat 

We see a number of images loading, such as YouTube video thumbnails that the Rovio site is displaying at a lower resolution in the browser.  The images are being downloaded at 480×360 pixels, but then displayed at 160×120 pixels. This means that the Rovio site is downloading images 9X larger than it needs, an inefficient use of network bandwidth and client-side processing time.

HTTP Persistent Connection

And lastly, Rovio is failing to take advantage of HTTP persistent connections (also known as HTTP keep-alive or HTTP connection reuse).  Without HTTP Keep Alive turned on at the web server, browsers are making and then tearing down dozens of unnecessary network connections to the server.  HTTP Keep Alive allows the same network connection to be re-used for multiple requests, and is much faster.

Conclusion

The three additional metrics for measuring web performance add a very useful nuance to being able to truthfully gauge how a user will perceive a page loading in the web browser.  It gives developers and site owners an additional dimension to improve and refine. Let’s hope Rovio takes some time to step up performance across these best practice areas.

To view the full range of Keynote Indices, please visit here.

Keynote tests the sites in the index hourly and around the clock from four locations over the three largest U.S. wireless networks, simulating visitors using three different devices. Data is collected from multiple locations and then aggregated to provide an overall monthly average in terms of both performance and availability.

July 9-10, 2013
San Francisco, CA

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PeopleLinx, a startup that makes LinkedIn engagement and analytics software, has collected a $3.2 million round of funding to continue its growth among the Fortune 1000.

This is the company’s first institutional round of funding; it was led by Osage Venture Partners with participation from Greycroft Partners, MissionOG, and a handful of angels. In fact, the startup said via email that the round was oversubscribed.

In a nutshell, companies can use PeopleLinx to improve hiring activity (as well as sales and marketing) via LinkedIn. The software helps them set specific goals and corresponding metrics, then meet those goals using customized scores and reports.

And then, there’s online reputation management to think about. Large companies have tens of thousands of employees, many of them with a LinkedIn presence. And all that adds up to a lot of user-generated data about the company itself.

“LinkedIn has become the leading search tool for information about people and the companies they work for,” said Greycroft partner Ian Sigalow in a statement on the news.

“PeopleLinx is … helping our customers represent themselves online and manage their online reputations. The opportunity for PeopleLinx to create value for the enterprise within LinkedIn is similar to what we saw Buddy Media do in the early days of Facebook.”

PeopleLinx was founded in 2009 by former and early LinkedIn employees. The startup is based in Philadelphia. Its clients include the Mandarin Oriental Hotel Group, the Direct Marketing Association (both internally and for its clients), and credit company Experian.

Image credit: sheilascarborough/Flickr

July 9-10, 2013
San Francisco, CA

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Mobile and web analytics company Mixpanel has just launched a new product to help companies track their best sources of revenue.

Essentially, the pitch is this: Mixpanel’s new Revenue Analytics product helps you determine the lifetime value of a customer. That’s a great metric on its own; and when it’s paired with the ability to track precisely how specific items in your strategy and tactics are impacting revenue, it grows wings. And helping product managers see, without having to run a report, that 35-50 year old female clients are twice as valuable as 18-25 year old males, or that customers acquired via Google AdWords spend three times as much as those who enter via Twitter, is magic.

That’s especially important right now, says Mixpanel CEO Suhail Doshi, because startups are having a hard time raising money — especially for consumer plays. But if they can show exactly how their product converts and funnels and ultimately produces cold hard green cash, the VC conversation is an awful lot easier to ace.

The new product is free to Mixpanel’s existing customers and installs, Doshi told me, with one line of code in your web or mobile app.

“The broader part of the industry doesn’t use this [lifetime value of a customer] metric,” Doshi told me yesterday. “But it’s an important number to know. Companies like Zynga and Netflix grew very fast because they could spend millions and millions of dollars and know they’re going to get a return on their investment.”

But in isolation, any metric is limited. The true magic comes when you know what factors drive your key metrics.

Source: Mixpanel

Mixpanel retention analysis

That’s the target Mixpanel’s new product is squarely aimed at. Mixpanel already knows an awful lot about your users; now, the plan is to tell you exactly which factors lead to maximum revenue. That’s how, Doshi told me, social dating site Grouper found out that Chicagoans were their most valuable users (who would have known?). And how project management company Sprint.ly discovered that customers who integrated their product with Github were 1,400 percent more valuable.

“This is actually very, very hard, and most companies don’t do this because the data is hard to access, it’s a manual process,” Doshi said. “But when you have it integrated, you can ask questions like, ‘Is Facebook Connect actually getting our customers to stay?’ and ‘What’s the actual value of that?’”

After revealing his motivation, Patel proceeded to reveal the methods behind his madness — the metrics he measures that have driven KISSmetrics to 100 percent year-over-year growth. Patel says every entrepreneur needs to track 10 specific areas of metrics:

1. People, not unique visitors
   UVs are not a valid measurement of activity. Customers might visit your site from multiple browsers on their laptop, plus a tablet or a mobile phone. In Google Analytics, they all look unique … so you need to start tracking people: log-ins, credentials, and usernames.
2. Time to buy
   Some people need time before they buy, says Patel. Give them that time, but be looking at marketing attribution — the first entry source, all the referrers in-between, and especially the last one before they buy. KISSmetrics tire-kickers need seven touches — blog, website, Twitter, Facebook, ads, and so on — before they convert to customers. You will find some interesting things, Patel said. Originally, the KISSmetrics team thought that Twitter didn’t convert. On a closer look, they say that there was no conversion if they viewed the data episodically, but customers did convert over time. Better tracking also enables better assessment of marketing ROI … now you really know the process that people take before buying.And one more tip: retargeting is important. Patel related an example of a mattress he was interested in buying that was $1,000, then $800, then $700 as he continued to occasionally click on the ad and became more and more likely to buy.
3. Targeted feedback from ideal customers
   Getting feedback from all the people who visit your website is useless, says Patel. Instead, ask the people who are your ideal customers … the insights will be much more valuable. Exit surveys are one of the tools KISSmetrics uses for this purpose.
4. Engagement level
   When Patel analyzed site engagement by traffic source, he saw that people from Twitter were spending almost two minutes on site, and that people who arrived at the website from a search engine using the keyword “heat map” were engaging much more than others. That enabled KISSmetrics to focus on those visitors who were already engaging the most.
5. Site and app events
   Tracking events is critical to knowing what part of your application users are actually using. For example, by adding event tracking to basically everything on the site, Patel determined that the addition of live chat on the site — talk to a sales rep — killed conversion. If something in your app or site is not being used, strip it away, Patel says. It’s extra, clutter, and distraction.
6. Real conversion rate
   Conversion doesn’t end when someone signs up. Free users can convert into paid users, so you need to track where free users originally came from, says Patel, and maintain that tracking over time. For one of KISSmetrics’ client, Bing and Google converted the same in terms of free trial users. But people who came in from Bing were almost five times more likely to enter their credit cards and buy the product. Knowing that helped the client focus their marketing efforts. Patel likes to track not just where customers came from but also what they did before converting — and then look for patterns.
7. Cancellations
   It’s easier to keep existing customers than get new ones, Patel says. That’s not rocket science, but knowing in detail what’s happening with cancellations and why is critical to growth. “You may have this big leaky bucket that everything is draining out of,” says Patel. “So stop filling it and start fixing the bucket.” For KISSmetrics, the number one reason people canceled was price, so Patel made cancelers an offer right during the cancellation process. The one-time offer, which gave exiting users the next 12 months at 40 percent off, achieved a 10 percent conversion rate.If users still don’t take that offer, KISSmetrics automatically allows them to ”name your own price.” If that number fit within predetermined levels, the company instantly accepted it.

   “If you can reduce churn, you’re going to be making a lot more money,” says Patel.

8. Lifetime value of the customer
   It’s OK to lose money in the short run, according to Patel, as long as you make it up in the long run. Which is why weight-loss companies offer all those money-back guarantees.
9. Cohort analysis
   Numbers on a user graph that are going up and to the right are fine, but they can often mask problems as new users join a growing service, says Patel. Entrepreneurs have to check user cohorts, or segments, to see how they are doing. For example: all the users who joined in August 2011 … where are they six months later? A year later?
10. User segments
    Don’t treat all your customers the same. Some are free, some paid, some are long-term, and some short-term. Then use marketing automation with Hubspot or Marketo to communicate appropriately to those different user groups.

When you track, Patel says, odd things jump out of the data that can make you much more profitable. One final example: Cutting the KISSmetrics demo time in half doubled conversions … probably due to more perceived urgency in customer’s minds.

Which is precisely how metrics can make you money.

Image credit: John Koetsier

“In fact, we found that the brick-and-mortar impact of online ads could be bigger than their online impact,” RapidBlue chief operating office Sampo Parkkinen told VentureBeat today.

This result is astonishing and could upend the way the online advertising industry traditionally tracks costs and measures return on investment. An online campaign that doesn’t seem to be paying for itself could, if this study is correct, be providing offline benefits.

That could be music to offline retailers’ ears, who are naturally not tremendously excited about being Amazon.com’s showroom.

RapidBlue, a venture-funded company, maps shopper behavior in stores and shopping centers: how many visitors, where do they go, how long do they spend in the store, what do they look at. The resulting data helps retailers understand what shoppers are doing and why they’re spending money — or not.

“We’re not really tracking the individual person,” says Parkkinen. “We’re installing our solution, which tracks mobile phones in retail outlets. Then we look at the sales metrics and how they’re fluctuating.”

After gathering baseline data, RapidBlue asked retailers to conduct a Google AdWords campaign. Then, while controlling for time-of-day and day-of-week variability, it re-checked shopper metrics, using a patented approach the company calls Gross Shopping Hours. Finally, after pausing the campaigns, it continued gathering baseline data, in order to control for other variables that could be causing shopper behavior changes.

“What we’ve found, and what seems to be quite encouraging, is that online campaigns for retailers seem to have a brick-and-mortar impact,”says Parkkinen.

More shoppers visited, and shopper spent more time in-store.

Exciting stuff, if you’ve invested in a physical location.

Rostislav Glinsky / Shutterstock.com, Wrangler/ShutterStock

July 9-10, 2013
San Francisco, CA

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Jessica Mah, co-founder and chief executive of business finance startup InDinero, took the stage at the Web 2.0 Expo this afternoon to explain how she solved a problem that her company faced last year: It wasn’t making any money.

At the time, Mah was trying to court investors, and she said that most of them had a similar message: You can’t worry about making money until you have more users, so focus on user acquisition. But Mah said that was the wrong lesson. Instead, she looked at the advice given out by iconoclastic investor Dave McClure (who now manages the 500 Startups fund), and she decided to focus on metrics.

Mah said she learned three big lessons.

1. Marketing is not the problem. Mah said that even if InDinero had the money to buy “awesome SuperBowl advertisements” like GoDaddy, it wouldn’t have fixed the fundamental problem: “Nobody was coming back to our site.” When Mah studied InDinero’s “conversion funnel” (the process of convincing a website visitor sign up and then actually pay), she found that only 0.01 percent of visitors became paying customers. So instead of trying to bring more users to the site, she focused her efforts on how to convert the visitors she already had.
2. Metrics tell an inconvenient truth. Mah recalled that she and her co-founder Andy Su liked to brag about how poor and hard-working they were, putting in more than 70 hours a week and sleeping under their desks. But in the business world, she noted, “You don’t get an A for effort.” Without metrics, a lot of that work was wasted. Once she started measuring her funnel, Mah could see that for all its hard work, the team were still leaving $5.4 million in revenue “on the table.”
3. Metrics help marketing. Not all marketing is created equal, Mah said. Of course, everyone uses Google Analytics to measure whether news articles actually drive traffic to their website, but Mah said she started looking at a more important question: Whether those articles drove visitors who actually signed up for InDinero. The answer? Articles that focused on InDinero as a small business tool paid off, while those that profiled Mah as a young entrepreneur or as a woman in tech didn’t. Mah said that’s what she suspected, but the metrics gave her the courage to stop wasting time on fluffy profiles.

And now things are looking up. Mah said InDinero’s conversion funnel improved dramatically, so now 0.2 percent of website visitors are signing up. And McClure is now an investor.

[photo by Dean Takahashi]

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Editor’s note: Clate Mask is co-author of the New York Times bestseller Conquer the Chaos and CEO of Infusionsoft,. He submitted this column to VentureBeat.)

There’s an old business maxim that goes “Where performance is measured, performance improves.  Where performance is measured and reported, performance improves dramatically.” And pretty much every manager has observed the truth in it.

Humans, though, can only focus on so many things at once.  So, measuring the right things is the key to effectiveness.

When you’re running a software company, there are seemingly hundreds of things to measure. It can be difficult to identify and keep your eye on what really matters.  Over the years, and through the various stages of our growth, I’ve found the things we measure at Infusionsoft change as our business matures and evolves.  Of course, we’re always measuring revenue, profit and cash, but other things are less obvious and can easily get lost in the mix.

Here are five important metrics I believe every software CEO should focus on, regardless of their business stage.

Cost per acquisition - CPA is measured in various ways, but the best way is to roll up all sales and marketing costs for the month and divide by the number of customers acquired that month.  If your sales cycle is 6 months, then use the sales and marketing expense from six months ago as the numerator and use this month’s unit sales as the denominator.  Whatever model you have, pick a mathematical method and stick to it so you have stable comparative data.  When you know CPA, you can make sound decisions about whether and how to invest to acquire more customers.

Revenue per employee – Early-stage companies typically have very low revenue/employee.  Once you get to about $200k per employee, you’ve generally got a pretty exciting business.

We measure revenue per employee on a monthly basis, dividing total revenue by the number of employees and then multiplying by 12 months to get an annualized number.  Tracking this figure each month has enabled us to make sound hiring decisions, manage our expenses, and be accountable to the labor investments we make.

Note: It is important to recognize that a software company’s primary investment mechanism is in human capital.  Therefore, the revenue per employee number should be used wisely, depending on the stage of the business.  For example, if you manage an early-stage software company to a $200k+ revenue per employee figure, you’ll never grow the company.  I have found that it is wise to chart a path toward $200k+ revenue per employee and measure progress along that path.

Customer loyalty – What you want to know here is how referable your business is.  When you’re likely to be referred, you get leverage on those marketing and sales dollars spent each month.  Therefore, the higher the referability, the more you can invest in CPA.

There are many ways to measure customer loyalty, but Net Promoter Score is gaining momentum as the preferred method for software companies to measure loyalty.

Lifetime customer value - When you know how much a customer is worth to you over the life of the customer, your decision-making improves significantly.  You also know how profitable and healthy your business model is, how effective tweaks in your model are and how to adjust as you grow.

This metric is a super-metric because it is comprised of two critically important drivers of the business model.  LCV = Average Revenue Per User / Churn.  So, you can increase your LCV by increasing the ARPU or by decreasing the churn.  Play with this equation and it doesn’t take long to realize that churn rate is what makes or breaks a business model.  Furthermore, slight reductions in churn can make massive improvements in LCV.

Usage.  Every software company needs to know how its customers are using and adopting the software.  There are those who feel otherwise, but I feel that any software company wanting to drive long-term value for its shareholders needs to drive usage.  Usage is king.  Everything else falls in line nicely when customers use the company’s software.

Therefore a CEO needs to know how to measure and drive usage.  We’ve found that our customers need to launch multiple marketing campaigns to become “addicted” to our software.  Therefore, the critical usage metric for us is “percentage of new customers that have launched at least two campaigns within their first 60 days” or “60-day multiple-launch rate.”

As a software CEO, it’s easy to find yourself swimming in metrics, wondering what data really matters.  Over the years, I haven’t always stayed as focused on each of these five metrics as I should.  And every time I’ve strayed, it’s come back to haunt me.

[Homepage photo: blyzz]

Apsalar, a company focused on mobile app marketing, is now ready to move on to mobile analytics with its new product, ApScience, which it is unveiling today at the DEMO conference.

The company says ApScience is the first service of its kind to track users through every step of how they use a mobile application. Today, Web marketers use conversion marketing to see if consumers perform an action like filling out a survey, or making a purchase, and then improve their campaigns. ApScience would let mobile app developers know exactly how users use their apps and apply similar marketing techniques. It can also segment users into specific groups, so developers can learn how newcomers approach an app versus recurring users.

To use ApScience, mobile developers install Apsalar’s software development kit, available for Apple’s iPhone-compatible iOS and Google’s Android operating system, and add code from it into their apps. Afterwards, they can use Apsalar’s Web-based interface to manage their campaigns and access real-time reports.

The company has two other products: ApBuzz lets mobile developers add Facebook and Twitter buttons to their apps, so that users can easily share interesting apps with their friends. ApFeedback lets developers easily create in-app surveys to better learn what users think. Both products are free, and require only two lines of code (each) to be implemented.

With ApScience, Apsalar is competing with a crowded field of mobile analytics companies like Google’s AdMob and Flurry. But it thinks it has an advantage in allowing users to analyze multiple apps at once and keep track of detailed metrics on how users actually interact with apps.

Apsalar is based in San Francisco, Calif., and has thus far raised $350,000 in funding from family, friends, and a few key angel investors, including Andy Sack and Hiten Shah.

http://c.brightcove.com/services/viewer/federated_f8/980795693

The choice of metrics is interesting, in part, because Twitter is using one of the highest possible numbers afforded to it. The microblogging service, which lets users post tweets, or short, 140-character updates visible to everyone on the Internet or just friends, is counting all visitors, not active users or even registered users. By the same metrics, Facebook could claim to have 1.2 billion unique visitors a month. (Facebook publicly says it has more than 400 million active users, but that figure may be closer to 500 million now, since it’s four months old and Facebook continues to grow quickly.)

Of course, from another perspective, Twitter’s figures could also underestimate usage somewhat. There are plenty of users who access Twitter completely independently of the website. The microblogging network said 75 percent of its traffic came via its application programming interfaces during its April developer conference in San Francisco. At the same event, the company said it had 105 million registered users. It added that it was seeing 300,000 new users a day. If its growth stayed consistent,  then the service would have about 122 million registered users by now.