Category: Pay for Performance

I receive regular inquiries from businesses seeking to partner with Skyworks Marketing on a 100% Pay-for-Performance (P4P) basis.

However, one aspect, in particular, can work against a business seeking such a partnership: Having a low priced product or service. You see, even with a high margin, particularly in a competitive market, such as weight loss, health, finance and insurance (as well as many others), there is not enough mutual opportunity.

Now, don’t get me wrong, competitive markets, per se, are not unattractive. In fact, the reason they’re competitive is because a lot of money is being made in that space. It simply takes more time and/or resources to compete in such an environment.

For example, a product that costs less than $50.00, even if it has a 90% profit margin, is not going to make enough profit, after the media buying, to make an attractive partnership from our perspective.

Of course, this could be profitable in the long-term with selective advertising and some very diligent (and lucky) social media strategies. But in my experience, to rise above the noise in a competitive market in a reasonable amount of time, ongoing media buying is what’s going to make it happen more predictably. (And even so — it’s still not guaranteed!)

A low-cost product or service means that advertising will eat up most or all of the profit, especially in the early phases. In fact, it will likely not be profitable until/unless a critical mass is reached whereby enough sales are being made on a big enough scale, which drives the media costs down and/or consumers are referring others en mass.

One effective solution is to offer more expensive services that would also be purchased by the buyers of the low-cost service afterwards. That’s a tried and true model to sustain the business via advertising. In such a case, it becomes important to calculate the value of a new customer or client to determine the workability. For example, if 30% of your buyers purchase an additional product or service within a certain amount of time (say 90 days), then that additional 30% could potentially become the actual profit stream.

In fact, it’s not unusual for some companies (particularly in the infomercial world) to lose money on their upfront sales (the sales that directly result from the infomercial). They simply make their profit on the upsells and follow-up sales.

Regardless, there’s still a testing evolution involved to establish proof of concept. And whose going to do the testing?

If you present the idea to a Venture Capital firm, or a Pay-For-Performance partner, like our company, the merits of your idea will be weighed against a number of variables, which boil down to risk vs. reward. The better a case can be made that your business is a low-risk, high-reward opportunity, the more likely you would be funded by a Venture Capitalist or that you might be deemed a desirable Pay-for-Performance partner, in which we would invest resources.

The reality is that in many cases, the great idea that you are proposing to gain support and resources for your business, is probably not as low-risk, high-reward, or even as unique, as you might envision.

Even if you are interested in a “partial” Pay-for-Performance partnership, whereby you are putting up media money and paying a reduced fee for marketing services, it may still not be worth investing our resources to prove the validity of your entrepreneurial vision.

Please do not interpret these words as a suggestion that such a product or service cannot be driven to a big success in any other way than buying media. There are definitely other ways to achieve success. It will simply take longer.

Wishing you much success!

Need a Pay-for-Performance (P4P) advertising partner to accelerate your business growth?

We’re looking for win-win partnerships.

Synopsis: Pay-for-Performance (P4P) Partnership Process

Pay-for-Performance Risk/Rewards

The basic appeal of a Pay-for-Performance partnership is that instead of paying for marketing and advertising services that may or may not generate enough leads and sales to justify the cost, you pay for marketing and advertising performance: usually leads or sales.

As ideal as a Pay-for-Performance business partnership can be — when you can find such an arrangement that provides significant leads and sales — there are two operative words: “business” and “partnership.”

In other words, the risk/reward needs to make business sense for each partner.

What We Don’t Do

Because there are a number of different Pay-for-Performance opportunities in the world, one way to describe what we do at Skyworks Marketing is by first highlighting what we are not:

• We’re not providing names and addresses from an existing database so that you can cold call them.
• We’re not an affiliate agency.
• We’re not advertising a generic service and sending the leads to multiple lead buyers.

Those types of services are fine for certain businesses. But alas, it’s not what we offer.

What We Do

We create custom sales funnels and provide the ongoing advertising to generate real-time leads and/or sales exclusively for your business and no one else (and later, we may use content marketing).

Visit the following link to view how we drive optimal results: Marketing Strategy.

Stated in more detail, we provide full-service, customized sales funnels, developed specifically for your business, while simultaneously testing, optimizing and managing all the advertising to keep the funnel full, and at the same time seeking new ways to get more prospects into the funnel.

This means not only taking advantage of online advertising media, such as:

We also use offline media as well, such as:

Furthermore, we generate ongoing content, including:

All this to drive and nurture leads and sales for your business.

Data Science and Artificial Intelligence

Through data science and artificial intelligence, we provide metrics and expertise to help tune your product or service to generate even more impactful results.

With this data, we provide insights into potential upsells, cross-sells and new products that can help your business grow faster and more effectively.

Primarily, we use data science and artificial intelligence to lower ad costs and increase ad performance.

The longer we run the ads through the sales funnel, the more data we generate, and the more effective the advertising becomes.

The Catch

This type of marketing and advertising requires labor, experience and expertise.

Whether we establish a partial or 100% pay-for-performance partnership, we want to be confident that the business we are promoting has a high closing ratio to turn leads into sales and provides good products and services.

A 2-week trial is our primary test to determine a good fit for our potential Pay-for-Performance partners.

However, this trial isn’t automated, nor is it a system where the labor is executed on your end. There is real human effort executed on our end to launch and manage a trial.

Hence, here’s the catch: We can’t offer a P4P partnership, or even a trial, to everyone who desires such. We need to determine the potential for a longer-term opportunity first. That means you’ll need to fill out our (free) P4P application to provide some preliminary information. Your part is easy.

On our end, your application will be manually reviewed and often research will be conducted to assess the opportunity.

P4P Trial Selection Process and Qualifications

There are two general categories of information we assess when evaluating whether we will offer a trial to a potential partner.

• THE BUSINESS ITSELF (including competition)
• THE KEY TEAM BEHIND IT

Our ideal partner represents a highly experienced team (or leader), is well-capitalized and has a truly unique and outstanding business.

But that’s not so common: especially the “unique” part.

As a result, we also seek partners that may not meet our ideal requirements but show enough promise that we’ll invest resources into a 2-week trial.

QUALIFICATIONS:

• Your product/service needs enough margin relative to advertising costs
• There needs to be an opportunity for adequate sales volume
• You need a higher-than-average quality product or service
• You need a good reputation
• You need a good sales team
• You need effective operations
• Ideally, you have existing upsell and cross-sell products/services

On the other hand, if you have a very strong model and margin (along with a high-quality product or service), that combination, by itself, can sometimes be the basis for a win-win partnership.

Qualification Examples

It all boils down to mutual opportunity.

A business that represents a strong opportunity for a win-win partnership will qualify for a 2-week P4P trial. A business with low opportunity for a win-win partnership will not qualify.

Following are some examples.

• An average business model or idea without experienced leadership will probably not qualify for a trial.

• However, a truly outstanding and unique business without an experienced team ‘may’ qualify.

• An inexperienced leader with little money and a brand-new business will not qualify (unless the idea or model is truly exceptional).

• A mature and experienced team with a good (average) business model may qualify.

• A mature and experienced team with a low-opportunity business model will not qualify.

• A great team and a great business opportunity will qualify.

• And to make things interesting, we may sometimes provide a trial for an opportunity that doesn’t look as promising, because we would like to see the trial metrics. So, anything can happen. The only way to find out for sure is if you submit a (free) application.

Again, it primarily boils down to mutual opportunity. The 2-week trial is where we gain some fundamental data.

2-Week P4P Trial

As part of the above qualifications and selection process, we’ll ask what you want to pay for a P4P lead or sale.

That number will be re-evaluated based upon real-world performance data after the 2-week trial.

Although we try to filter out trials that we don’t believe will show promise after a 2-week trial, the reality is such does occur.

So, after a 2-week trial, the performance data will inform three options:

1. No go. We cut our losses and part ways as friends.
2. The numbers show that the opportunity is so good that we can provide a 100% P4P Partnership, which means you pay only for completed leads or sales.
3. The numbers are promising enough to continue a Partial P4P Partnership. A partial P4P partnership means you will pay at least media costs in addition to performance incentives.

By the way, it’s worth noting that a trial that yields unfavorable results is not an indication of the success potential of your business. This trial merely provides preliminary data regarding the speed of a longer-term P4P opportunity.

90-Day P4P Trial

A successful 2-Week P4P Trial means we can move on to a 90-Day P4P Trial.

A 90-Day P4P Trial provides more meaningful sales metrics. A 2-week trial can produce the minimum data necessary to evaluate the potential for a P4P partnership. But a 90-day trial gives us firmer ground to build a more robust sales funnel since we only implement a fraction of the sales funnel and advertising resources in the shorter trial.

Message optimization, landing page optimization, conversion optimization and other factors can begin to impact the metrics in the 90-day trial, which all serve to increase performance and lower cost.

P4P remuneration will be re-evaluated based upon the real-world performance data after the 90-day trial.

P4P Remuneration

We’re seeking win-win partnerships. As such, the P4P remuneration needs to work well for both sides of the partnership.

The most basic metrics we evaluate include how many sales (and profit) are generated in a given time period. You may be pleased with the leads and sales, but what if the volume does not support our continued effort?

Once again, we’re looking for win-win P4P partnerships.

If this sounds like something you’d like to explore, the next step is to request and instantly receive your free P4P Application.

We can’t guarantee that you’ll qualify, but no matter what, you will receive a professional, timely and courteous response.

How much would your business benefit from a continuous stream of pay-for-performance clients?

Let’s face it: Advertising is a pain.

It’s expensive.

It’s unpredictable.

Sometimes things you try don’t work at all.

And that’s the good news.

The bad news is that if you don’t generate enough sales, you’re on a trajectory to failure.

OK, enough of the obvious. What’s the solution?

At Skyworks Marketing we use data science, artificial intelligence and lots of real-world experience to increase ad performance and lower ad costs.

However, what benefits you the most is our pay-for-performance leads and sales.

We may use Google, Facebook, television and other ad platforms to increase revenue for certain clients, but only use one ad platform for other clients. It boils down to what works best for each business.

If there’s one thing we do emphasize – it’s video. Whether online, on TV, or both, video increases viewer engagement.

So, how much more successful would your business be with a pay-for-performance advertising partner?

It means substantially more value for your business along with our vested interest in continually driving you new leads and sales.

Learn more about our pay-for-performance partnerships.

P4P PARTNER QUEST

You produce a high quality product/service. Your customers/clients love you. You just need more of them.

You’re seeking a pay-for-performance (P4P) marketing service to provide as many new leads, or actual customers and clients, as you can get.

Maybe your business is doing great and you want to get to the next level. Or, maybe your marketing worked in the past, but the evolving landscape became too complex and expensive.

I’ve got good news and bad news.

GOOD NEWS / BAD NEWS

First the bad news: The marketing and advertising landscape has gotten more complex. Google and Facebook, in particular, keep getting more expensive. On top of that, strategies that worked not too long ago are less effective today. Nowadays, profitable marketing strategies seem as fickle as diet fads or women’s fashions.

Now the good news: Businesses continue to sell stuff. Every day. Sure, some businesses expand while others fall to the wayside. But behind each business success is a marketing success. Pro marketers are always seeking ways to provide more sales for a lower cost. Currently, two areas are delivering some of the best marketing return on investment (ROI).

TWO HIGH-PERFORMANCE MARKETING EPICENTERS

You’ve probably heard of both.

Cross-Platform Retargeting: Unless you’re new to online marketing, you know that retargeting and remarketing represent a number of different ways to use advertising to build relationships across different online platforms. For example, show someone a video, a post, or an ad on Facebook and then show those same individuals uniquely targeted ads on Facebook or elsewhere on the internet. And you only pay when they click. It’s a powerful way to place your brand in front of the right prospects as they travel around the internet. And for those that don’t click, you get to show your brand for no cost.

Artificial Intelligence: Of course AI is not new. It’s been around for decades, but it’s getting smarter. Autonomous cars are in the news more than ever, for good and bad. Whether we like it or not, much of our lives are — or will be — touched by AI. In the world of marketing and advertising, AI already facilitates massive data analysis, more effective ad creation, faster ad testing and more efficient ad buying. Each passing day puts non-AI advertisers at a greater disadvantage.

BETTER AD PERFORMANCE

The question isn’t whether you should be using these (and other) technologies to improve the ROI of your marketing and advertising efforts. For many businesses that haven’t begun yet, the question is where to start?

And after that there are many more questions on how to continue to move forward.

Furthermore, striving towards higher production and lower costs by introducing any new technology often lowers efficiency and increases cost – albeit temporarily – until the new technology and processes are effectively integrated into your operations.

The same for new spheres of marketing strategy and technology. You will likely make mistakes and lose ROI until you adjust to the new way of doing things.

But what if you don’t have the time to keep learning new marketing methods?

Perhaps that’s one reason you’re researching P4P marketing and advertising options.

PAY FOR PERFORMANCE (P4P)

P4P isn’t new either. Commissioned sales people and organizations have long been an integral part of the marketing and sales landscape. Commission-only sales professionals receive no compensation unless they generate sales. Sales pros who are compensated by a salary plus commission often have lower commissions than their commission-only counterparts, but that base pay does offer more income predictability when sales are sluggish.

There are advantages and disadvantages to each model.

• For example, a sales pro who receives a salary plus commission represents a longer-term commitment by both the company to increase revenue into the future.
• A commission-only sales rep may at any time favor other brands, who offer more compensation or perks, resulting in a loss of revenue for the first business.

There are also a variety of hybrid commission models that attempt to better align sales incentives and goals between the brand and salesperson.

P4P as used in internet marketing, represents a pricing model whereby a marketer or advertising agency receives a payment or bonus from a merchant for ‘performance’. This may be in the form of each new lead or new customer obtained for the merchant through the agency’s online marketing efforts or some other ‘performance’ metric the agency and client agree upon before beginning.

What about affiliates?

AFFILIATE MARKETING

P4P is a broad term that embraces many types of performance-based marketing and advertising models.

Affiliate marketing is one type of performance-based model in which a business compensates one or more affiliates for each visitor or customer created by the affiliate’s own marketing efforts.

The basic idea here is that merchants only pay affiliates for efforts that result in a desired action such as a lead, a  sale, a free trial user, or a newsletter subscriber. This removes the risk to the merchant because they know in advance that they will not have to pay for bad referrals, and it encourages the affiliate to send good referrals.

Affiliates often have a specific business process and/or model that works for specific types of businesses. 

If there are existing affiliates that support your business model, it’s something you should consider.

As an example, Amazon maintains an affiliate marketing program which they launched in 1996. Although they were not the first, its program became widely known and contributed to the retailer’s success. Amazon affiliates (called “associates”) place ads on their own, personal websites for products which are purchased via Amazon.com. The affiliates get paid a commission when purchases are made from Amazon. Like many things in life, affiliate marketing has advantages and challenges.

AFFILIATE MARKETING CHALLENGES

For many businesses, affiliate marketing programs are a productive part of their marketing mix.

However, affiliate programs also attract rogue elements, who use spamming, trademark infringement, false advertising, cookie stuffing, and other unethical methods. Hence, some merchants avoid affiliate programs due to associated risks, even if said risks are actually less than they used to be. As a result, some merchants implement tight controls on how affiliates may advertise and use monitoring methods to help diminish the risks of rogue elements, which limits the support of affiliates.

Other brands use outsourced affiliate program management companies to deal with the details.

For the purposes of this message, it’s important to know that Skyworks Marketing is not an affiliate.  Nor are we a program management company or an affiliate marketing agency. We only mention the preceding based upon years of explaining the difference to those newer to P4P marketing.

In brief, Skyworks Marketing is a Pay-per-Performance advertising agency. We create, execute and optimize custom marketing and advertising strategies with a heavy emphasis on online advertising, video and TV. We may also use affiliate marketing networks as one part of our own efforts.

If your business is a good fit for affiliates, that may be a productive path for you. Just be aware that such is not what we do.

DIFFERENCE BETWEEN AFFILIATES AND PERFORMANCE-BASED MARKETING AND ADVERTISING AGENCY

Here in the 21st century, performance based marketing and advertising is an umbrella term which includes Affiliates, Influencer Marketing, Email Marketing, Search Engine Optimization, PPC, Native Advertising, Sponsored Content, Social Media Marketing, Incentive Programs, and any other form of marketing where the marketing partner exchanges sales (or completed desired actions) for commission payouts.   A pay-for-performance advertising agency is comparable to the way traditional ad agencies have operated in the past (and now). The TV series MAD MEN serves as an example.

However, the difference between modern ad agencies and those of the 60’s, when the bulk of MAD MEN is represented, are substantial. For example, back then “focus groups” were often used to measure consumer interest.  Nowadays, real-world ad “testing” is how to find out what will move people to spend their money.  

Among many other things, a modern agency develops and tests offers for you, which might be similar or quite different from your current efforts.  

An agency partner is working with your business to optimize your sales.

The top clients in MAD MEN paid millions of dollars a year for marketing and advertising services.  Of course most small to medium size businesses have budgets that are only a fraction of that. Yet the point is still valid: an ad agency is optimizing ways to sell your products/services to maximize sales as much as possible.

An affiliate model that works best for you and is profitable for an affiliate is a true win-win scenario.  But most often their compensation is tied towards doing things their way, which typically represents a fraction of the sales opportunities that can be leveraged to expand your business. For example, video and TV production, direct mail, and many types of online advertising would not be used for your brand via affiliates, but such is routine through a marketing and ad agency.  

A significant difference between performance-based ad agencies and non-performance based agencies is the incentive to generate marketing and advertising campaigns that work.  When you pay an ad agency for services, you may be gaining their very best and most sincere efforts to generate sales for your business.  Or, maybe not, as both sides were represented in MAD MEN.

When an ad agency is operating with a performance incentive, the calculus is mutually beneficial. A performance based ad agency has “skin in the game” and is continuously motivated by the principle that better performance for your business is better performance for their business.

PAY PER CLICK

Another one of the most widely known P4P marketing opportunities is via any of the myriad Pay-Per-Click (PPC) platforms. Google and Facebook are the most well known players in this space. In brief, you only pay when someone clicks one of your ads. It’s a classic P4P model.

Of course if your ad, offer and landing page are not well optimized, you can still lose money. As many do. Hence, that’s why agencies, such as Skyworks Marketing, and others, offer expert PPC Management services. Having said that, as a word of caution, some markets are so competitive that even paying a professional service to manage your ads may still result in unprofitable PPC expenditures. Which is why we prefer to monitor and optimize the entire sales process, not just the advertising, so that we can provide the best opportunity for profitable results.

Having said that, there are some business cases whereby running PPC ads at negative ROI is still valuable. For example, when enough upsell opportunities are proven to establish a higher lifetime value per average customer than the initial purchase itself.

Here at Skyworks, we have enough experience that we may advise that you will not likely achieve a profitable ROI before we even start testing. In other cases, we can see that there is a reasonable expectation that we can generate PPC leads/sales at a positive ROI.

BUY YOUR CONVERSION

What if you could buy the key conversions you require, such as qualified leads, app installations, new subscribers, confirmed orders etc., at a pre-agreed price? This is also known as CPA, which is cost-per-action or cost-per-acquisition.

In this case you’re paying for an outcome that is more definitive and/or further along the sales funnel than just a click. The cost for CPA is higher than with PPC and may have some conditional requirements. When it is available for your own products or services it can mitigate the realities of rising advertising cost since the necessity to continue to optimize the advertising to offset the rising cost is borne by the partner doing the advertising on behalf of the company providing the product or service being sold.

Stated another way, buying a pre-agreed CPA provides more prediction in your marketing and sales process, as well as lowering the cost of your marketing.

Having said that, if you have the resources to hire and maintain the professional services required to make modern marketing and advertising more productive while reducing costs, you likely wouldn’t be contemplating external P4P partners to begin with.

WHO WE ARE

Skyworks Marketing is first and foremost a marketing and advertising agency. We use online and on-TV marketing, advertising, publicity and lots of video to generate sales and leads for clients. It’s a true partnership whereby we create custom advertising programs for your products or services.

A notable success was helping to grow a business from nothing to over $100 million in 3 years via online advertising, direct mail and national TV. Pro tip: It involved a tremendous amount of split testing of messages and ads.

Located on the beach, just north of LA, in Ventura, CA, Skyworks Marketing is also the primary sponsor and management/production entity behind the weekly CA cable TV series, Our Ventura TV.

A core component of who we are is using artificial intelligence and data science to generate more sales with a smaller budget.

WHAT WE DO

Skyworks Marketing helps businesses generate more leads and sales via marketing, video and TV with an emphasis on artificial intelligence and data science.

Our fundamental strategy includes ongoing ad testing and data analysis, supported by artificial intelligence.

Most of our partnerships also benefit from our video production, regardless of where they are located in the U.S.A.

We provide these services in the same way other marketing and ad agencies do: we charge money.

Additionally, for certain clients we partner on a full or partial P4P basis. In that regard, we’re a bit like Goldilocks seeking partnerships that are just right. It usually includes partners who are seeking full-agency support with an entity that has more skin in the game and is more accountable.

HOW WE GET PAID

Like any business, we provide value in exchange for money.

In some cases, we provide value on a performance basis.

Those P4P cases are designed to represent a truly win-win relationship where our qualified clients receive tremendous value, on a long-term basis, for marketing and advertising services that evolve over time as the markets themselves and real-world data informs those changes.

It’s a never-ending process of testing and optimization.

We get paid two ways:

• Clients pay for services, such as ad creation/testing, offer consulting, ad management, script writing, video production, etc.
• Qualified P4P clients pay us on a full or partial performance basis depending upon the relationship.