How to write a metric tree for an ecommerce ad account

Start at the top

• Pick one top metric the client already signs off on. Often this is contribution margin or MER against a target, not raw revenue.
• Write its formula in one line, with the units. A metric without a formula starts a debate instead of a review.

Split it into drivers

• Each branch should be a part you can measure or change, such as order value, margin rate, discount depth, shipping cost and media cost per order.
• Check that the branches add up to the top. Multiplicative trees need the same check at every level.
• Stop at the level where a person can act. A branch nobody can change is context, not a driver.

Attach an owner and a check

• For each branch, write the owner, the source, the definition from the definitions sheet and how often it is read.
• Mark each branch as measured, estimated or not measured yet. Never show an unmeasured branch as zero.

Use the tree when a number moves

• When the top metric moves, read down one level at a time. Stop at the branch that explains most of the change.
• Record the branch and the finding in the change log, so the next review starts from the same place.

A tree on one page is more useful than a tree in a long deck. Keep it to one screen and review it once a month.