Pay-for-Performance Quest for Client Partners

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.