The manner in which performance marketing channels are being used to drive client acquisition strategies is changing rapidly; especially now that it's becoming very important for clients to measure the exact return each channel brings to their business.
For example in the insurance space, the insurer's marketing teams need to link marketing spend back to the value of their insurance book (ie: when a sale is made, or even more accurately, when someone continues to pay their premiums on a monthly basis.) In the banking space, their marketing teams are required to measure against consumers paying back their monthly loan repayments.
Many of the performance marketing channels like paid search, SEO, email, SMS, social, content and database marketing are traditionally outsourced to agencies (or marketing partners) versus being done internally. In many cases these agency partners are still charging a percentage of spend, or a very large retainer and unfortunately these same agencies are very reluctant to move onto a performance marketing model aligned with the business metrics of their client. There are many reasons for this, including a lack of internal skills and an understanding of how to execute and measure (with the client’s marketing team) among others.
As a result, the manner in which these marketing partners work with their clients is changing, and changing fast. Moving forward, it is critical that clients work with their marketing partners to take more control of their performance marketing spend. This can be done by helping the business to link all metrics across the value chain and by building internal capabilities to plan, execute and measure all performance marketing themselves. If marketing teams can show a profit in their activities, the overall business will naturally be very open to rapidly increasing budgets as they want more clients.
The performance marketing partner still has a very key role to play by providing high level strategic guidance, ongoing sharing of unique IP, marketing automation technology roll out and support, skills development as well as filling the skills gap while internal teams are being built.
Most important though, is that the overall remuneration model over time should be linked with the client’s key business metrics and this way everyone gets paid when new clients are acquired. Over time, not only will the partnership be stronger and more sustainable but more budget will be opened up to build on the strategy.