Why correlation vs. causation matters

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Newton's Cradle

One of the constant refrains you’ll hear from analytics and metrics experts like Tom Webster and many other sensible digital marketers is that correlation is not causation, and you shouldn’t confuse the two. It’s Statistics 101, after all. However, we don’t often talk about why this matters and why it’s bad.

Fundamentally, the reason why confusing correlation with causation is bad is this very basic idea: everything in life is cause and effect. You do something, and there’s a whole chain of effects from what you did. Eat a doughnut, and a thousand different things happen in your body as saliva flows, stomach acid churns, sugar and starch molecules are converted and enter your bloodstream, you feel the sugar rush, and if you don’t use up those molecules of energy, your body stores them in fat cells.

Likewise, in marketing, everything is also cause and effect. Put up an ad online, people see it, some click on it, and some portion of those people buy it. Send an email, some people see it, some people open it, some people click on things, some people go back to your website and buy it.

The problem with correlation and causation is one of order. Correlation looks the same regardless of the order of the processes. The number of ads posted mirrors the number of clicks on the ad. The energy gained from the doughnut mirrors the calories in it.

No one with any common sense, however, would argue that you should measure your blood sugar level changes to judge the impact of the doughnut by measuring before you eat the doughnut and not measure afterward. No one with any mathematical sense would argue that your ad click through rates are independent of whether or not you post the ad. Order matters. You need to eat the doughnut in order to cause the blood sugar change. You need to post the ad in order for people to click on it.

When we confuse correlation with causation, we are effectively saying that order doesn’t matter, when in reality order matters a great deal. Why? Because if we want things to get better, if we want to make changes, we need to know what to change. We need to know the order so that we are fixing the cause and not the effect. If we do things in the wrong order, the cause will continue to create effects, and our efforts will have no impact – or could even make things worse.

For example, if you’re looking at the correlation of content marketing to lead generation in your web analytics and you believe that lead generation is the problem, you’ll probably go and attempt to fix it. You might buy a bunch of ads, or send a bunch of emails, but if the cause of your marketing problem is crappy content, then buying all those ads will just waste your time and money. You have to fix the cause – crappy content – and doing so will create a cascading effect that seems to repair a whole host of problems.

That’s why correlation and causation are so important to get right. Get it right and you’ll fix your problems. Get it wrong and your problems will get worse even as you throw more time and resources at them that could be used for other problems.

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