The traditional agency model is broken. You don’t need me to to tell you that. Charging a fixed fee or a percentage of spend just doesn’t make sense, your incentives are not aligned with those of your agency.
Best case, an agency will woo you during the business development phase, just to pass off your business to entry level employees and ensure that they are doing just enough to keep you as a client—often this will involve making sure their reports and presentations present their results in the best light possible. Worst case, they are actively encouraging you to spend money on campaigns that aren’t working, just to up their fee while also willfully misleading you about how successful those campaigns are. I have seen both of these cases.
A true performance marketing agency does things differently and I strongly believe you should either look for a performance marketing agency or make sure that you put your agency through its paces to ensure they are living up to a few important ideals.
What are those?
They Focus on the Metrics that Matter for Your Business
Across the vast world of digital marketing, there are metrics that matter to your business and hit the bottom line, and there are those that don’t. Sure, it sounds great that three million people “saw” your ad or your video, but if that ad or video was stuffed at the bottom of a webpage among 6 others where no one actually saw or had meaningful interaction with it, it doesn’t really matter. But often, that can be counted as an impression and highlighted as success.
A performance marketing agency will make sure they set up and optimize their campaigns to deliver on metrics that truly matter.
Perhaps those are leads, better yet, those are qualified leads that fit right into the target profile of your best customers or perhaps those are sales, better yet those are high value sales from customers who will come back again and again. Perhaps you are focused on scale, acquiring as many new customers as possible with a particular or budget…or perhaps you are focused on maximizing your return on ad spend. Whatever the case, your agency should take the time to understand the goals of your campaign and design their efforts around those goals.
Frankly, that is not even the battle though.
The best performance marketing agencies won’t stop at just a well-thought out campaign (and the many pieces that go into that), they will maniacally look to analyze and optimize the campaign throughout its lifetime.
From changing messaging and creative, to testing new audiences, to suggesting you A/B test the color of your call to action button, they will NEVER stop trying to improve the results you are getting for your marketing budget. And they will tell you when to stop because something isn’t working and what you need to fix so that it does..
They Will Be Transparent with Performance
I am not going to tell you that attribution is not a thing. It absolutely is. All the time, people see ads, while reading the news online, driving their cars, scrolling through their news feeds, etc and are being influenced by them…without realizing it or, sometimes, actively thinking they are not being influenced by them. As an advertiser, I would think I am more aware of this than most (and thus perhaps somewhat more immune) yet I still notice this effect on me—the subtle accumulation of the combined effects of weeks of being bombarded with different ads on different mediums for the same product and finally giving in and making the purchase.
That said, attribution is WAY too often used as a crutch by agencies to prop up subpar performance. Sure, if I run a retargeting campaign on Facebook that shows everyone who has visited your site with ads, and then I include every view-through conversion as a sale driven by that campaign, its going to look like it performed extremely well (for a quick explanation on view-through vs click-through conversions, click here). However, the reality is that many of those sales would have happened regardless of whether that campaign was running or not, and depending on what other channels you are running, you could have multiple other campaigns claiming credit for the same sale. Ever wondered how you could add up the revenue “driven” by campaigns run by your different agencies and the total is way bigger than actual revenue coming in the door? This is how.
A performance marketing agency won’t try to obscure the numbers or make performance seem better than it is. They won’t try to use jargon and buzz words to avoid your valid questions or concerns. They will actively explain these concepts and the performance of their campaign because they aren’t incentivized to make it seem like campaigns are performing better than they actually are. Which brings me to my third principle.
They Will Put Their Money Where Their Mouth Is
If you have an agency that does the first two, you are already doing better than probably 80% of companies out there. However, a true performance marketing agency is willing to put their compensation on the line to achieve your goals. They will work with you to define what metrics matter and what goals are realistic based on all the complex factors of any given campaign (channel, audience, budget, industry, competition, etc.) Then, they will design a performance-based compensation plan that means they only truly win when you do, unlike the traditional agency model where clients are just that, a client and not a true partner.
This is not easy to do. It takes a lot of work to design a plan that makes sense for both sides and then adjust it when needed to account for changing circumstances. That is probably why a lot of agencies can’t or won’t do it, despite how logical it is. But the reality is when you get it right and you are working with the right agency, it is truly magical for both sides. There’s a reason why you pay sales people commissions, aligning incentives works, period.
At FENX Digital, we design all of our relationships as true partnerships. Many times, we have recommended that one of our partners stop a campaign, so our team can make sure we make the adjustments needed for that effort to be successful, when another agency may have simply spent the allotted budget and moved on.
We’ve often had the tough conversations with our partners where we have to explain why past performance may not have been exactly what they thought is.
We also create custom, performance-based deals that align our incentives with those of our partners.
We do these things because it creates long-lasting and mutually beneficial partnerships, where we can drive results that truly make a difference.
If you are looking to hire a performance marketing agency, reach out to us today at email@example.com.