What to Measure On Your Social Website

Dennis Mortensen is the only person to have appeared on two Ultra Light Startups panels (on Web Analytics and on Bootstrapping vs. Venture Funding) so it’s no secret that I’m a big fan. When he heard of our February event on Designing Social Websites he passed along this post of his from 2007. It’s an old one but offers timeless wisdom for anyone designing and operating a social site. Among his insights:

• Align your business objectives with your Key Performance Indicators (KPI’s)
• On social sites, KPI’s usually relate to a) user engagement and b) advertising revenue
• Monitoring and acting on KPI’s will determine if you end up like Facebook (good) or like Friendster (bad)
• Any business should have no more than 5 KPI’s
• Create credible targets for your KPI’s using competitive intelligence

He then provides 7 social networking optimization opportunities

1. Segment users based on their community activity
2. Segmenting the Anonymous visitors to members conversion rate KPI
3. Perform single-page FORM Analysis
4. Create a custom report with the metric Time since last login KPI
5. Run an out of the box standard Action Participation report and add the User Engagement KPI
6. Total time spent on site KPI is more important than page views
7. Increase the quality of your Ad units per visit KPI by using External Data Sources

It’s a long post and there is a wealth of analysis to back up each of these points.  If you’re building a social site, definitely read this post.