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:
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!