Nearly a hundred years ago, merchant and marketing pioneer John Wanamaker gained fame for saying “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Wanamaker expressed well the frustration and challenge at the time of measuring cause and effect for marketing programs.
In recent decades, marketing efforts have often been separated into brand (or awareness) marketing vs. performance-based marketing.
Marketing is treated as an expense with budgets set quarterly. When budgets are reached, marketing programs stop. Sound familiar?
Redefining performance-based marketing
In recent years, the pace of innovation in marketing technology has been staggering, and the growth of online marketing and e-commerce, including the emerging social and mobile marketing channels, has created amazing new opportunities.
Marketing channels, strategies, and metrics have evolved to the point that virtually all marketing can be considered performance-based.
Effective working media dollars are revenue-generating and literally pay for themselves.
Here at Wize Commerce, our shopping network sites like Nextag do not have marketing budget caps: our investment decisions are performance-based, and as long as we are hitting our strategic targets, we continue investing.
We dynamically track, test, and adjust. Since performance-based marketing is bringing in profitable incremental revenue, we don’t focus on the expense, we focus on the cost of sale. (more…)