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A recent survey conducted by the Internet Advertising Bureau illuminated the current state of digital ad revenues. The study showed that 66% of are coming from performance-based campaigns, 32% are coming from CPM-based campaigns and 2% are coming from a hybrid model combining the two. With quarterly digital ad revenues exceeding $10 billion, marketers will be consumed with “performance” even more so than they are today.
So what can we expect? History shows us that as more people start to do something, the overall quality of that “thing” decreases. For instance, a few years ago there weren’t many marketing departments blogging, but now everyone seems to be doing it due to its social, organic and impact on your bottom line. This means we no longer have the majority blogging because they’re passionate about it but rather blogging because they have to do it; a huge difference and one that directly impacts quality.
How will this concept translate to “performance” marketing. Most performance marketing campaigns are focused on “customer acquisition,” whether it’s B2B or B2C. The thought process here is to think about how marketers can “acquire” customers that will engage with a brand at the best “cost.” Certain people even have job titles of “customer acquisition manager.”
As a marketer, I am terrified of thinking about customers and “acquiring” them. Our customers aren’t part of some M+A, or holding company, they’re our customers, and we shouldn’t be acquiring them but rather investing in them. Marketers shouldn’t focus on how much a customer “costs” to acquire but rather which customers are worth “investing” in that will be mutually profitable over time, just like investing in the stock market.
Do the most trusted investors typically put their money in penny stocks or do they focus on the long-term performance? The answer is long-term performance. It doesn’t matter what the cost is today if the future value will be greater, and that’s how marketers should address their target markets.
Marketers, don’t focus on CPA, CPL, single purchase behavior and don’t purchase your users. Instead, invest in the right customers, the ones that want to be associated with your brand over time and the ones that will pay off in the long run.