What about Pay for Performance marketing?

In an online world where just about everything can be tracked and measured, why do so many marketers have trouble putting ROI on any sort of online marketing, advertising or lead generation campaign?

There was a terrific post by Pat LaPointe on the measurement of Social Media where he adds his comments and insight to an interview with three experts from well-know companies who were asked about the best ways to measure the ROI of a social media campaign.

The bottom line ascertained by the interviews is that it’s difficult and nobody really has a grasp on it just yet. The real message that Pat points out is:

“we marketers don’t do ourselves any favors by trying to disconnect it [social media] from financial value just because it’s hard to make the links.”

And a follow up comment that absolutely nails it:

“ the people that are spinning the ‘lack of financial attachment ability’ are probably fully capable of doing so, if they took the time to think hard about how to do it. Rather, they are probably enjoying the uncertainty and newness of social media and taking advantage of this to avoid direct accountability. Why sign up for a commitment when they don’t need to?”

Who is the primary guilty party here? I say by and large, its the advertising agencies. So many of whom do very little to help advance this cause. Why isn’t a Pay for Performance model more commonly accepted in a world of digits, where everything is tracked and measured. Why won’t big agencies put their money where their mouth is and share the risk with their clients. Big agencies want their clients to pay high monthly retainers and embrace billable hours and flat rates. Why would any business who’s primary focus is the bottom line ever risk a revenue model that nearly assures strong revenue and profitability? They need to keep their bottom line safe too you know.

My conclusion: most big agencies are not doing their clients any favors with effectively advancing their online initiatives, much less helping advance the online marketing and advertising industry as a whole.

Ian M. Bardorf has over 15 years of sales and marketing experience in Internet technology, with a specific focus on Internet marketing and online advertising.