25 Years Ago on March 15th, 1985, the first ever .com was launched, Symbolics.com. But it wasn’t until roughly 10 years later, when Netscape launched the Netscape Navigator, the first widely adopted web browser, that the Internet and the World Wide Web took off. In 1995 VeriSign handled 18 billion website and email connections. Today VeriSign does the same amount of transactions in approximately eight hours. In 1995 there were 16 million Internet users. Today there are over 1.7 billion, amounting to 25% of the world’s population. In 2010 there will be more than 12 million .com addresses. The Web will help drive more than $1.5 trillion in global commerce. The explosive growth of the Internet and the World Wide Web came about when Netscape made it more usable, when their browser made it possible for the average Joe to easily get the content they wanted.
The power of the internet as a communication tool is unprecedented. Where else can a tech geek chair dance to an obscure Romanian pop song and become a global sensation? But the power of this medium is still under leveraged by the marketing community. In 2010 despite digital media accounting for more than 30% of individual media time, digital ad dollars will represent roughly 10% of total advertising spend. Given the increasingly complex online marketing landscape (think social media, ad exchanges, DSP’s, mobile integration, etc.) this gap is understandable. But, just like the tsunami of usage that followed Netscape helping people figure out how to get what they wanted from the Internet, a tsunami of ad dollars are on the way to the Internet as marketers figure out how to take full advantage of the target-ability, customizability and real interactivity that make digital media the best communication tool ever.
Kirshenbaum Bond has developed a novel way to put some skin in the game with their clients. They have developed a stock portfolio of their publicly traded clients and will link their financial rewards to the portfolio’s success. See the NY Times article:
Advertising: Agency Combines Clients’ Stocks for a Mini-Mutual Fund .
Having an agency link their financial reward to the client’s is a great thing. It aligns incentives and gets the agency focused on the returns the client’s marketing investments are generating. Not something typically seen from large brand oriented agencies, but clearly a winning formula. Hats off to Lori Senecal and the KBS&P team for aligning their rewards with their client’s financial results in this clever way.
But, “hello,” we in performance marketing have been doing just that for nearly a decade! MediaWhiz, and other performance marketing agencies, have been getting paid for results since 2001. We get paid to create the specific customer actions that our clients know, with statistical predictability, will generate profits. In most cases it is not our bonuses that are on the line but our entire fee. It’s not just some “skin in the game” but our financial lives on the line. We live or die by daily market results which determine whether our programs are providing a positive ROI.
As the competition for high quality customers becomes increasingly intense, every dollar a client invests in marketing needs to be productive. Great marketing programs will be continuously optimized to ensure they are creating the customer response that will lead to profits. Aligning the agency’s incentives with the client’s financial results is a strong step toward making this work. It’s great the KBS&P team will get a bonus if their client’s stock goes up. But if an advertiser wants more than a little skin in the game, if they want marketing partners fighting for their client’s profits as if their lives depended upon it, they should add more performance marketing to their overall marketing mix. As a performance marketing agency, we at MediaWhiz understand our financial life, just like our client’s, depends upon driving more profitable marketing. Now that’s alignment!