Is Performance Marketing The Next Big Step In Digital?

A company wants to grow, and they hire a marketing agency. The agency has the experts and creatives, and, in a flex of its muscles, tells senior company leadership that the agency has the power to make a real impact on the company’s business.

The company — now client — buys in. Spend a little, make a little more. That’s the goal.

But let’s think about that promised “impact.” Agencies traditionally focus on brand marketing — the type you don’t have to get out of bed to see. It’s the kind you read on your Twitter and Facebook feeds, hear on the radio driving to the beach and see on the television in your living room. It’s used primarily to grow brand recognition and increase visibility, and the result is the consumer’s awareness of the client’s product or service. That in no way ensures, however, the consumer will purchase the product or service.

Metrics associated with this type of marketing — likes, favorites, retweets and perceived equivalent media value — all have some sort of impact. But they’re not often discernible on a client’s bottom line. That means the client paid the agency a hefty fee for gained awareness, but nothing more. It’s here that “impact,” for an agency, is a terrifying term.

Yes, this is an oversimplification of the relationship between clients and agencies. But it goes a long way to illustrate why the work must have a business impact. Day-to-day client contacts may love seeing upticks in shares and retweets. Senior leadership, however, are often occupied with one important question: Is what we’re spending making us a return? If not, it becomes a problem.

Brand marketing has its benefits, but performance marketing may be the answer that clients and agencies seek — especially in the digital realm. Although less well-known than brand marketing (think Alec Baldwin versus his brothers Daniel, William and Stephen), it punches well above its weight. (Much like, arguably, those same three Baldwin brothers. If you’ve seen The Usual Suspects, you know Stephen steals his scenes.)