• http://vantagemedia.com/ JasonAnderson

    Nice Article Adam.

    Speaking as a Search Marketer working for a firm that charges exclusively on a performance basis, your comments and suggestions are spot on.

    A couple more hints for advertisers out there considering a switch to a performance Search partner: First, it really pays to understand your objectives and opportunities in search. At Vantage, most of our clients work with us on either a cost-per-sales-lead or cost-per-transaction/sale basis. A few larger clients have awareness objectives that we’ll typically help out with, but we’ve found that the greatest opportunity in search is the chance to “harvest” interest that already exists, especially in the area of branded keyword markets.

    If awareness is a goal, it’s important to isolate measurable actions that you have good historical data around. This allows you to set up baselines that reflect opportunity fluctuations attributable to seasonality and offline advertising cycles (if applicable). It can get kind of technical, but having a deep understanding of all your data is required to create the right objectives. Us performance marketers love our action targets and work hard to reach them.

    In addition to Search KPI baselines and expected RPA on a transaction basis, it’s also very helpful to understand customer lifetime value and acquisition costs from all channels. Armed with this information, a good performance search marketer can set up a program that perfectly aligns all parties interests. This alignment promotes efficiency and is the premise of every performance search business model.

    I encourage all advertisers to consider performance very seriously. If the data share up front is accurate, and the goals aggressive but reasonable, you can and SHOULD expect significant incremental gains at stabilized or reduced costs per action.