Not changing the business model…

Based on the latest blog entry, one of my business contacts was apt to ask whether or not I was changing our business model. At this point, we’re not changing the business model. The blog entry was more me trying to shed some light on the topic of pay-for-performance marketing to show that it’s far from cut and dry. I think that performance-based marketing really only works in certain media channels. It really depends on the advertising medium. For more direct marketing and direct response, pay-for-performance makes a lot of sense. For others, where it’s more mass marketing in a newspaper or magazine or TV, performance-based pricing may not be as relevant simply because those media vehicles aren’t geared towards generating a response but might be geared more towards generating brand awareness. So the dilemma is that some advertising simply isn’t meant to drive sales and hence is not properly geared towards pay-for-performance marketing. This is clearly a problem for marketers who get compensated based on sales. My point is that it is important for marketers to be accountable for some definable metric, whether it be sales or brand awareness and that compensation should rest predominantly on what an advertiser can quantify, not on things they can not.

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