Product Analytics: What are the top 3 success metrics for YouTube?

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Product Management Interviews generally try to judge if you are analytically inclined by conducting the “product-execution” or “analytics” case studies. It can either be done as a separate round of product management interview process, or you can be asked about metrics as a part of product design or product strategy questions.

You need to understand analytics well to become a good Product Manager. You are expected to make data-driven decisions for your Product’s success. And I’ll explain to you why…

Data is objective, unbiased information. Hence, more trustworthy. Data-driven decision making involves playing with large amounts of data, analysing it to identify patterns, obtaining actionable insights, and using that insight to make product decisions.

Intuition, on the other hand, is subjective. Intuition is effective when you don’t have data or the time to think logically before making a decision. And even though you can develop intuition by gaining more and more experience, it’s still risky to use it in decision making.

Product success has to be measurable.

With the advancements in data capturing and analysing tech, A/B testing has become simple. You can have more and higher-quality data about all aspects of the business. Everything becomes more and more quantified. You, as a Product Manager, have to be comfortable with metrics to function well in this eco-system.

Now, let’s jump to solve an analytical case study. I’ll try to explain the approach to such questions by talking about YouTube.

The interviewer wants us to define the top 3 success metrics for YouTube. This is a very broad problem statement that can have varied answers. We’ll try to solve the problem by breaking it down into smaller parts and then narrowing its scope.

Let us understand what YouTube as a product is. What does success mean here? Who are the users of this platform? And, what are the business goals?

Understanding YouTube

YouTube is a content sharing platform where users can create and share content in the form of videos. It is the default destination for people to find and watch video content of various genres. Content creators are paid a part of what YouTube earns from the advertisers showing ads to the viewers on the creator’s channel. Simple, right?

Users can also subscribe to YouTube premium (YouTube’s subscription model) to get an ad-free experience on the app. Premium also includes youtube music as well as YouTube originals, YouTube’s exclusive content.

Note: Youtube has smaller features like YouTube Shorts, YouTube Live, etc. Ask the Interviewer if they want you to keep these features in mind as well. For now, we shall be leaving them.

User Segments

Identifying exactly who the product’s users are is essential to understand the various use-cases. Only then you’ll be able to holistically know how a feature or a change will impact the product.

Note: There can be cases where the users and customers of a product are different. You have to think from both fronts before making product decisions. For example, Airplane seats are used by passengers but are bought by the airline company.

User Segmentation of YouTube

We can broadly classify YouTube’s different kinds of users into 4 main categories

1. Non-Premium Viewers
2. Premium Viewers
3. Content Creators
4. Advertisers

At this point, you are expected to ask the interviewer some clarifying questions, to reduce the scope of the problem space.

Clarifying Questions

Clarifying questions serve a dual purpose. They help you in

1. A clear understanding of what you need to do
2. Giving you time to consider how to approach the case

What is our business objective? How does the competitive landscape look like? In what geographic area are we trying to reach?… Are some examples of clarifying questions based on the problem statement at hand.

Many times I’ve encountered situations where the interviewee has gone into solving a problem that I never asked for, realising later that he didn’t understand the question in the first place.

Product managers are expected to understand all the aspects of the business before proceeding to build the product. Designing products without understanding what users need leads to failed products.

What should we measure for YouTube?

Read the question again. There are many unknowns in that single statement. You can clarify some things by asking questions like

1. Shall I focus on any specific feature like YouTube Shorts or YouTube as a whole?
2. Shall I focus on any specific user segment out of the identified four?
3. Shall I focus on the YouTube app or YouTube website or both?

Let us assume that we have to think about all the user segments for YouTube, taking into account both website and app.

Note: In the interview, you should be able to demonstrate your ability to make logical decisions, so be prepared to answer your questions.

Defining the metrics

I’ll tell you about a famous framework used to evaluate a product idea, develop a strategy, guide the success of the product, and know-how customers move from one stage to the next within a funnel.

AARM framework

As described by Lewis C. Lin, author of the famous book Decode and Conquer

The AARM Method is an analytical framework that defines the metrics for a product. This four-letter acronym refers to acquisition, activation, retention, and monetisation

Using this framework to find the metrics that matter for YouTube’s different user segments.

We have now listed the metrics to track various funnel stages for all our user segments. Now, how to select the top 3 to know about the success of YouTube?

This purely depends on what success means, i.e., what are the corporate strategic goals, short term and long term. We as the Product Manager can then prioritise and track those metrics which take us closer to that goal.

Let us assume that revenue is the major short-term business goal for YouTube right now. To achieve this, the focus shall be on:

• Increasing the Ads revenue per Non-Premium user
• Increasing the LTV of Premium users
• Increasing the number of Advertisers on the platform

Concluding

We always aim for being in a win-win situation, but we can’t be that lucky. It happens quite a bit that we are required to make win-lose trade-offs. For example, a particular feature could increase revenue by 5 per cent, but 7-day retention can decrease by 10 per cent. What should the product manager do?

Mention the tradeoffs and potential problem areas to the interviewer. What are some cases where your metrics will improve but may cause negative effects on other important metrics for the platform?

Think of some potential trade-offs from these metrics to give a complete answer to the interviewer

Summarising

To find the top 3 success metrics for YouTube, we tried to understand YouTube and its users. We marked the various metrics to track the funnel stages for all the user segments. Keeping in mind the business goals of YouTube, we prioritised the top 3 metrics we’ll track and improve to attain the desired goals.

I hope this article helps you in solving analytical product interview questions in a better way. This problem could’ve been answered in many different ways depending on how the interviewer released information to you based on the business scenario.

I’m sharing some more problem statements you can practice on your own or with peers.

• What metrics would you look at as a product manager for Instagram ads?
• You’re the PM of Ola Money. What would your top three metrics be, and why?
• What should be Google Photos’ north star metric?

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