It is funny that marketers had to join the word performance with marketing. Like if marketing by definition was not about results.

Instead of blindly spend all your money on TV commercials, in performance marketing you pay for results (impressions, clicks, leads, and even sales.)

This is possible because technology allows us to measure every single user action, from every single device, in every single corner in the world.

Some agencies are taking this further, by assuming all the risk. That is, you pay only when you get a sale. It is a win-win model because it is in the agency’s best interest to generate sales for you, otherwise, they won’t be getting back the money the spent on ads.

This digital utopia has two main threats. First, users privacy. Companies are tracking all your online actions, and this poses a risk on your privacy.

The second one is ad fraud. An easy way to explain it is: bad bots on the Internet are impersonating humans and clicking on ads, spending your campaign’s budget. There is no silver bullet here, but we are moving really fast thanks to technology.

Performance-based agencies, affiliate marketing programs, they are not engines that you can plug in your company and increase revenue. They require fine-tuning for your specific company needs, which translates to extra costs.

This will get better over time, thanks to big data and A.I./machine learning. Marketers and engineers will build performances engines, and who knows, we might be seeing a performance marketing engines, custom-built for your type of company, for your specific industry.

leocelis

Hi! My name is Leo Celis. I’m an entrepreneur and Python developer specialized in Ad Tech and MarTech.

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