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Thursday, Jan. 29, 2009 at 9:32 pm

Let’s Get Rid of Performance Based Marketing, Huh?

By Jeff Sexton
January 29th, 2009

So apparently the Internet Advertising Bureau is dissatisfied with search-based Internet ads.  Seems they want to “overcome perceptions of ‘creative shabbiness’ in online media, and to help prevent the slide toward a ‘performance-based’ Internet advertising economy.”  Ouch.

While I can’t help but shake my head at the elevated nose and depressed intelligence of a dying attitude that associates “performance-based advertising” with creative shabbiness, that’s not what really bothered me about this piece.

What bothered me was two-fold:

1)    The Interactive Advertising Bureau’s confusion about the very medium it claims to represent.

2)   The implied motivation behind the IAB’s attempt to bring branding to the web.

Let’s deal with the first point and how it relates to branding via Internet Advertising.  Basically it boils down to this:

You can close your eyes but you can’t close your ears.

If I’m watching TV or listening to the radio and I’m interrupted by your ad, I can’t help but overhear your message, even if I look away and suddenly switch my attention to getting that last bit of salsa onto my Frito or avoiding the bumper of the car in front of me.

Since I’m at least half paying attention, great creative can cause me to redirect my attention back to your ad, thereby allowing the ad’s message to sink in.  Given enough repetition, the ad gets absorbed to the point where it can sway my decision when I’m actually in the market for the advertised product or service.

It’s a seemingly inefficient process that’s made shockingly effective through intelligent use of mass media.  The required repetition and non-targeted nature of your audience is more than overcome by the sheer number of people you reach and the amount of times you reach them.  As listeners and viewers convert over time, your mass media campaign can potentially create dramatically more traffic and sales on a per-dollar basis than targeted direct response methods.

So for intrusive or interruption-based media, great creative plus reach & frequency all go hand in hand for an effective ad campaign.  And I’ve said before that offline branding efforts can pair especially well with a solid online web presence.

So the takeaways are:

  1. Branding almost always requires repeat exposure – this is why frequency matters.
  2. Branding only becomes efficient when you can reach a lot of people cheaply – this is why reach matters.
  3. The end goal of branding is to implant enough good associations about your product/brand/offer in the mind of the prospect to get them to buy from you once. You get one shot because actual experience either reinforces or destroys branded associations after the first purchase.  Lot’s of recent brands have been built on extraordinary customer experience and very little to no advertising, but almost no brands have made it with mediocre experience and lots of branding campaigns.

Unfortunately, the Internet is NOT an intrusive or interruption-friendly media.  It’s an interactive or “engaged medium” precisely because you need audience permission and participation to make it work.  Attempts to shortcut the “permission and participation” part usually meet with dismal results: we’ve become extraordinarily good at concentrating on the active window while ignoring banner and right-hand column ads. That means great creative stands very little chance of grabbing attention from an Internet user’s task at hand.

Other than adolescent boys staring at Lamborghinis and viewers of the rarely successful viral video, people who aren’t in the market for what you are offering have no interest in voluntarily exposing themselves to your ads.  And, for a participatory medium like the internet, that leaves only people actively interested in your market/offer.  People who, I don’t know, might indicate that interest by, say, typing keywords into a search engine or something…

Nor is the Internet a medium where there’s usually any significant space or time between being engaged by an ad to buying the advertised product.  If I click on a search-generated ad, I’m pretty much already at some stage of the buying process.  You don’t have to repeat the ad to make it sink in or design the ad so that its message is memorable; you just have to make it salient to my task-at-hand and I’ll click.  This is why ad relevance or “scent” has generally displaced the importance of “great creative” for PPC ads.

Yes, it helps to make more concerted efforts at grabbing people earlier in the buying process, but they still have to BE in the buying process to begin with.

So despite his protest at the misapplication of reach and frequency models to Internet advertising, I suspect that IAB President Rothenberg wants to similarly misapply an interruption-based model of branding to a permission-and-participation-based medium.

Brand builders plan around reach and frequency because reach and frequency are intrinsic to the mechanics of branding. You might be able to do branding on the web through viral videos or other entertainment-based efforts, but you’ll still have to ensure you reach a large number of people with enough repetitions to make your message sink in.

Will a fully engaged audience require less repetition than a more passive one?  Sure, but less might mean 5-15 times vs. 156 or more repetitions.  Other than planes hitting the World Trade Center or your wife saying “I Do,” very few messages are burned into your memory the first time your experience them.  And I don’t care how “great” your creative is, your actual business message (vs. the novelty you wrap around it) will never reach that level of impact.  This is why viral campaigns work better than single videos.

And this brings me to my last point and what bothers me most about the IAB’s push for “great creative” over “performance based” advertising:

They never once said that performance based advertising wasn’t making the wisest and best use of their clients’ ad budgets. They never seemed to indicate that their clients would be selling more and gaining more market share if they were actively branding on the web.

What they said was: “it was time for online publishers to reclaim some of the premium advertising turf vs. general market media, especially network television.”  Followed up by a statement that the Internet’s emphasis on performance-based or direct response advertising, “does little to elevate the perception of online’s premium communications value.”

Hmmm.  Does this sound like Randal and the IAB are most concerned for what’s best for clients or in what’s best for Internet Advertising Agencies?

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Comments (29)

  1. im sorry but this sounds like a bunch of rambling on a friday night at the pub, lets go spend $4 million on a 30 second ad for superbowl so we can get a corporate box at the game… im sorry that profit margins are down in large agencies but anyone who is planning on surviving the next few tough years are moving their old media clients online at least a percentage of spend. when was the last time you picked up a newspaper head line and went to that store gave them the newspaper as proof that the was the sole reason you went there!

    web analytics allows you to track most of this and engagement marketing can also tell you how often your customer had to read the headline and how many so called unsuccessful viral videos they had to watch before their purchased something.

    Can your offline media measure time wasters vs high value sales, im sorry but no!

    Want a unsuccessful campaign look at blendtec and its “will it blend campaign” if thats not an example of succesful viral campaigns i will go out and sell newspapers on the street corner to help your old media clients get some exposure!

    Go on try it, google “will it blend” and see the close to 45 million pages google has dedicated to that term, its not a generic term so its purely original and purely marketing!

    the dotcom bust showed that companies who didnt work with performance based marketing lost their investors money and went broke!

    if im not measuring my clients campaigns in some way im not doing my job, performance based is the only way that you can ensure your agency is doing something!

  2. [...] Tags: futurenow, internet marketing, Web Analytics FutureNow released a new post related to the Internet Advertising Bureau, read the original and this is my response to [...]

  3. Great article Jeff. A little bit of rambling but the core message is spot on :-)

  4. LOL, Jeff you missed the point of your own headline – where is performance-based marketing in your article – it’s a ramble about branding.

    If you want to talk about online branding and value – talk to affiliates – they are the ones who carry the can for an aweful lot of companies. All too often I see branding banners offered on affiliate network sites by companies who think that having an (e.g) DELL logo is going to encourage a click-through. They expect publishers to plaster their banner on their sites, with the publisher hoping someone will click it and buy something.

    Instead marketing needs to be offer-based – something to entice a click – even harder in graphic stuff, which is why I am heavily into text content.

    But lets get to the crux of your headline – Performance Based. Is a click through a measure of performance? Partly. But again from an affiliate’s perspective it is much deeper than that – the click needs to be wrapped in, as you mention about search ads, a desire by the person to at least consider buying.

    My argument is that performance advertising is measured in *conversions* to sale, sign-up etc.

    That’s how I earn my money and that is the only performance that matters. The rest is agancy hyperbole and navel-gazing on the subject.

  5. Does that go for performance-based PR too? I was thinking of using Publicity Guaranteed for PR and they only charge based on articles placed. Seems to be a good model. I realize there are differences between digital marketing and PR, but I think there is something to be said for performance-based models in some fields.

  6. I think that performance-based advertising is taking a huge chunk out of the efforts of large advertising agencies with their branding approach.

    It’s only natural that the agencies are going to want to fight the upstart competitor. I find it comical, though, that they choose an argument of “They’re not as clever as we are” to combat a challenger who is kicking their Armani-clad rear ends.

    Performance-based marketing is making inroads because it works for advertisers. Does that mean that agencies should just fold up their tents and fade away? No. Just as radio created a new niche for itself when television came along, agencies will eventually find their niche (assuming that they’re as clever as the claim to be).

  7. Good post Jeff, I think the IAB is possibly saying what it believes its members want to hear…but then you already indicated that.

  8. [...] si creéis que he criticado demasiado a Randall, os invito a leer la rajada de Jeff Sexton en el blog de Future Now: una auténtica lección de publicidad on y off line) Trackback URL [...]

  9. [...] interested in some of the more conceptual aspects of advertising, I’d recommend reading Let’s Get Rid of Performance Based Marketing, Huh? on Future Now’s GrokDotCom/Marketing Optimization Blog. It will give you an insight into the [...]

  10. What’s most offensive is that traditional ad agencies are claiming that performance-based advertising is reducing the perception of online advertising as “premium.” In fact, this shift is simply revealing the FALSE PREMIUM that traditional advertising agencies and media outlets seek.

  11. The sad thing about it all is that companies that can actually afford to “Brand” their product the majority of the time, I haven’t seen an effective way to measure the results over any period of time. Let alone the life of their repetitive ad.

    The advertising team is given an allotted amount to spend on Television ads with no goal in mind, other than to reach millions. Although I do believe the trends are turning in favor of performance marketing, hence the frustration of IAB and the millions their going to lose!

  12. Hey now — Why can’t brand building and performance-based marketing co-exist peacefully in the same campaign. This debate sounds just like the old “Tastes Great / Less Filling” debate. It’s all beer folks. Develop some compelling, brand aligned creative, target audiences to develop relevancy, define the desired behaviors and a CPA model which measures and rewards those behaviors and then you have a real campaign. There’s no either/or here – just an opportunity to combine the best of both worlds. See how its done at HydraNetworks.com

  13. I have to say that we’ve been seeing that attitude from agencies for many years now. They were used to the way it was … have client spend huge sums; provide no real feedback of any substance as to how the ads were performing.

    I seem to recall a television monitoring agency that got upset because they were being asked to back up their claims.

    On the Web, whether or not you do intensive analytics, the possibility is always there, and easily enough built in.

    I’d have to say that it sounds like one of those times of change, when you have to change with the times. :)

  14. Creating brands worth evangelizing about is often misunderstood. The connection between the core values – the soul of the company and the soul of the customer – is why customers evangelize. They have found a temple of core value at which to worship. It’s mythic. It’s epic. The brand becomes icon because it connects to the subconscious yearnings of the customer, imprinting on the brain. The pictured emotional experience becomes a conduit through which the customer can again be touched by those core values.

    Those pictures and emotions then become language in the brain of the customer. And it’s the language of evangelism.

  15. brand4profit,

    I think you rather missed the point of the post. Granted, it’s something of a rant and contains a few points, but the biggest is that online media is, in general, unsuited to the kind of interruption marketing required for effective branding. NONE of that had anything to do with creating the brand – it was focused on methods of ADVERTISING the brand. Doesn’t quite matter how mythic or epic your brand, if no one knows about it, it’ll fail.

    And frankly, I’m having a hard time thinking of a mythic air conditioning brand that I’d give a crap about without actually being in the market for a new air conditioner. Which is really my point – branding often means influencing people who AREN’T currently in the market for your product, which means getting a message to people who aren’t really interested. Without intrusive mass media, that becomes a very expensive and difficult proposition, regardless of how “epic” your brand.

  16. [...] on performance – Jeff Sexton gives a great overview of performance-based marketing, why it matters and how you can make the most of [...]

  17. [...] The IAB came out with a strange position (Read it) and Jeff Sexton had bit of a harsh, yet realistic take on the IAB’s position (Read it) [...]

  18. [...] all you Internet Marketers yearning for a creative renaissance in online advertising, follow Apple’s lead and employ these techniques to their maximum.  Just try to remember [...]

  19. I’m going to have to agree with the 1st rambling comment. I lost interest due to the negativity here. Sorry. +(

  20. Property Management,

    Yup, it’s kind of a rant. There’s some decent stuff there all the same, but I can’t blame you for finding it loosely organized and negative. I’ll try to either stay off the soap box or to make more tightly focused rants in the future ;)

  21. It’s not often that you see a blogger get accused of rambling!

    I think there is room for both design and performance, for me it boils down to customer objectives.

    Thanks for the post.

  22. You can just dump performance based marketing, there are too many people out there that without performance based systems they can’t function. This is not everyone of course but there are those that if they are not forced by a set requirement of conditions they can’t function?
    Doug

  23. I’m also agreed with David, that Internet ads are still very effective and productive compared to thousand dollars spending on a 30-40 sec. TV ads. On the other hand, just noticed few days back, internet ad service agencies like Chitika now introduced a new concept of ads. Ads will be displayed only if your site visited through a search engine and on a certain keyword.

  24. Performance based marketing? I really afraid of that when it is online web marketing specially by SEO. I like to read your blog for marketing tips. Great resources here.

  25. This is great article. Being webmaster and internet marketer myself, I had tested many different advertising strategies and trying to find those, that work and make me profit. I think this is a problem for new affiliates or webmasters – they like to follow someone’s instructions and stick to them, but at the end find out it is not working for them. Learning different techniques and testing them until you find the one that is working for you, this is the most important in my opinion.

  26. I think that performance-based advertising is taking a huge chunk out of the efforts of large advertising agencies with their branding approach.

  27. Performance based marketing? I really afraid of that when it is online web marketing specially by SEO. I like to read your blog for marketing tips. Great resources here.

  28. Performance based advertising and branding are two completely different forms of advertising with two completely different goals. Branding falls under the creative umbrella. You are trying to create an idea in a consumers head. If your expectations with creative advertising is conversion, sales etc., you need to get out of the advertising business because you are simply a buffoon. Performance based advertising is a form of directional advertising. The “new Yellow Pages” if you will. You are targeting a consumer who has money in their pocket, the idea of spending it on a product has already been planted and they click to buy. One form NEVER can replace the other no matter how much performance based advertising “guru’s” want it to. If you think eveything will eventually go to performance based you are a fool. The media that garners the audience you want to get in front of doesn’t work for free. It is also not our job to make sure you have a product that the consumer wants to buy. It is also not our job to make sure you design an ad or a campaign that gets someone to click. Our job is to get you your target audience, grow that audience and retain that audience. Quit being lazy as business owners and take responsibility for promoting your own products. If you want in front of my audience you have to pay me to do that. I could care less about a percentage of clicks or sales, I’m not your sales rep. Your ad is. So if no one clicks on it or buys that’s your fault not mine.

  29. Now all commenter and readers, If you have decided to use banner ad marketing as part of your online advertising campaign, you ought to choose the banner ad that suits your objectives best. There are different types of banner ad campaigns. The types of banner ad campaigns are based on the size of the ads and the formats used. Where you can easily select your desired location and access.

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Jeff is a Persuasion Architect, Web copywriter, blogger, and instructor of FutureNow's Persuasive Online Copywriting workshop. Follow Jeff Sexton on twitter

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