There are many situations in life where we pay for an uncertain outcome: lottery tickets, fees for educational courses we may not pass, or interest on a loan for a business that might not work. Until recently, marketing was one of those situations too. Sure, you could do your research on different firms, but consumer psychology is tricky. The results may not materialize. However, that is all changing thanks to the concept of performance marketing.
Only Pay When It Works
Performance marketing is distinct from the traditional marketing model in one very important way: you only pay when you get your desired outcome. That could be a sale, a click-through to your website, or any other trackable outcome you choose. The point is that instead of handing your money over to a marketing agency and hoping to see an increase in your profits somewhere down the line, everything you spend will be linked to a clear result.
Less Risky and More Rewarding
Paying when your marketing is performing well means that you pay less for poor campaigns, but it gets even better than that.
Because you can see in real-time how your campaign is doing, you can pull the plug on it altogether and try something else if it is doing badly. On the other hand, you can instantly scale up campaigns that are doing well to make even more money from them.
Transparency Builds Trust
With traditional marketing firms, businesses are often left with some anxiety as to whether their marketing budget is being spent wisely. This is perhaps why relationships have been such a strong feature of the marketing business in the past, because it was difficult to know who to trust. However, with performance marketing it is much easier for businesses to both trust and verify the record of those they work with.
It Still Encourages Creativity
Some worry that by focusing on measurable results, marketing firms will figure out what works and produce the same kinds of unoriginal ads forever.
But agencies like King Kong have not reached the position of Australia’s leading performance marketing firm by serving up the same campaigns for every client. Smart marketers know that what worked in the past may not work again, and that materials must align with their client’s brand. Restrictions like these force them to get creative.
Conclusion
Performance marketing is a modern approach to this important part of business. It makes a small, simple break with traditional marketing payment methods, and results in more scalability and less risk for businesses.
