Performance Marketing Lies

By Robert Glazer

Online Marketing LiesThe performance marketing industry is rife with bad behavior. Here are four lies your firm may be telling you:

1. We only get paid for performance, so our incentives are aligned.

Online marketing firms that claim to only get paid when they perform always seem to get paid. This is because they recognize that there are easy ways to make short-term gains, even if they yield little true value to their clients or aren’t sustainable, many of which are described here. For example, an SEO firm might get paid for increasing rankings and then pick search terms to focus on that don’t really drive traffic or business. For this reason, it’s important that fee arrangements with vendors be thought through carefully. However, too often the companies who hire performance marketing firms share the blame by demanding instant ROI, or a deferred cost agreement that is “performance” only. What’s really needed in many of these situations is a careful, upfront investment of time and energy that will produce more sustainable, long-term results.

2. Your organic search traffic is really growing, thanks to our SEO work.

SEOThere’s no reason a potential customer who already knows your company shouldn’t find it easily online. These customers typically use “branded” keywords that include either the company’s name or product (e.g., GM Cadillac), when searching for your online presence. Even if very little attention is paid to SEO, your branded results should always be good. Success isn’t providing good branded search results, it’s a baseline requirement for performance marketing firms.

“Non-branded,” on the other hand, refers to keywords that don’t directly include the client’s name or product (e.g., sports sedan). It’s much harder to see results with non-branded search, because it requires all your SEO tools: keyword research, keyword allocation, content creation, etc. Non-branded SEO is most important, as this is where most new customer acquisition occurs. When reporting, performance firms sometimes combine branded and non-branded rankings together, and say the average is really great. However, the average doesn’t tell the whole story.

3. Your affiliate program generates tons of revenue.

An affiliate marketing firm may be happy getting paid strictly as a percentage of a client’s program revenue, because it knows it can sign up a large number of low-quality affiliates and achieve what looks like a lot of “revenue” in a short period of time. Many of these partners have questionable tactics such as typo domain squatting, trademark PPC, downloadable toolbars that claim credit for sales, and made up coupons that trick people into clicking on them and setting the cookie for customers already in the cart. These tactics usually mean that the revenue from that sale is not incremental; the merchant would have gotten the sale anyway, or the customer is not new. Even worse, you’re paying a fee for business you would be getting without the affiliate.

Running a successful affiliate program is very labor-intensive, and most of the investment needs to come up front in the form of affiliate recruitment and outreach. This takes time and money, and is better aligned with a fee structure that encourages the recruitment of quality partners over the long term. The performance marketing firm should be incentivized, not just on sales, but also on the efficiency of the program so that they spend your commission dollars wisely. If your affiliate program is made up of a large percent of low quality affiliates making easy money, and your performance marketing firm claims it’s really bringing in the big bucks, it may be a major distortion of the truth.

4. You’re missing the next big thing!

In e-commerce, you’re consistently presented with the “next big thing.” Some of these tools and platforms have been game changing; Facebook and Pinterest, for example. However, companies and marketing firms often rush to embrace a new channel or tool, simply because “everyone else is doing it,” and not because it has been proven to be successful. In fact, far more time is put into the newer, sexier channels than the more established ones with a track record that show a healthy ROI.  For example (a few years back), many retailers invested heavily in Facebook Stores, based on the fact that “everyone was doing it,” only to quickly shutter them because of poor sales and lack of customer interest.

Performance marketing firms want to appear at the forefront of innovation. But they need to both understand each client’s business, and come to the table with suggestions based on real performance metrics and case studies, rather than a peer pressure-based approach of copying what other companies are doing without knowing the results.