Vinny Lingham's Blog - Latest Comments in Special Report : Profit Sharing - The Performance Marketing Model of the Future

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Belly Button Rings — Wed, 08 Oct 2008 18:05:45 -0000

Thanks for post. It is an interesting thought that search marketing can only exist in a performance metric driven environment and that we see ourselves as an extension of the merchant themselves, as we invest in people, technology and infrastructure, and then leverage that investment across multiple clients on a pure risk basis.

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Rhianna — Fri, 13 Oct 2006 23:54:24 -0000

Vinny,

Your endorsement (i.e. you wrote: "I have been a huge advocate of ...") as "an extension of the merchant themselves ..." is in contrast to Carsten Cumbrowski's Affiliates are not an extended Sales Force
Both opinions are interesting and worthy of consideration.
I believe that Affiliates whether part of a larger, organized group, or whether independent thrive on an independent freedom that could not exist if the Affiliates were an extension of a merchant's sales force. Being an extension of a merchant's sales force also implies exclusivity but one Affiliate may promote and market a merchant and that merchant's competition. As an independent (small) marketer through the websites I create and maintain, I like to sell "gizmos" and as long as I sell a "gizmo" from one of my sites, it doesn't matter to me what merchant is selling the "gizmo" as long as I get the commission. There are times when I will put two links for a certain item or 2 links for separate but similar items on the same web page -- it doesn't really matter to me whether Merchant A makes the ultimate sale or Merchant B unless one of those merchants has a track record for paying me more (in that case, I usually focus my energy on the merchant who pays more).

In terms of Clicks2Customers search marketing, would your company really wish to be an "extension of the merchant themselves" to the extent that the merchant has control over your company? Do you see your company as a Franchise of the Merchant exisitng underneath a Merchant's umbrella? Probably not, but I wonder how eager Merchants will be to engage in a contract of profit sharing when they are used to paying a stated fee/commission?

I enjoyed reading all the comments & the links embedded in the comments!
Andreas Reiffen produced a fine study :-)

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Vinny Lingham — Thu, 12 Oct 2006 13:44:48 -0000

Don't get me wrong, managing a small keyword set for an average SME (10,000 keyword +-) is easily achieved by using the Google interface, and will most likely be about 80% efficient if there is at least 1 person dedicated to the campaign. The issue is managing hundreds of thousands of keywords. Also, if a merchant sells more than 1000 items, it no longer becomes feasible to have only 1 person in-house. We find that our best campaigns are ones where the merchants have either under-resourced their paid search team, or allocated to an agency that does not have enough people or their own technology to manage the load. That's where performance marketing becomes supplemental..

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Vinny Lingham — Thu, 12 Oct 2006 13:41:05 -0000

Sorry about that Carsten - my comment spam filter caught it - it's been released, above. Thanks.

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Jean-Marie Le Ray — Thu, 12 Oct 2006 09:01:22 -0000

Hi Vinny,

Really good thoughts indeed, but reading it my belief is that search marketing as you describe it is reserved only for big corporates with large budgets. So if you were asked to quantify the necessary investment budget for SMEs, what would be your estimatation about?

Jean-Marie

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

carsten cumbrowski — Thu, 12 Oct 2006 08:19:12 -0000

Hey Vinny. I guess my long comment to this post ended up in the trash bin. I have my comment saved on my computer in the case it got lost. :Let me know and I will repost it. Thanks.

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

Ralf Hein — Thu, 12 Oct 2006 08:02:00 -0000

Hi Vinny,

interesting thoughts, this is something i have been waiting to come up for some time already. However, i still miss that you credit more than one marketing partner (the one with the last click) with a profit share. Only this will ultimately show the tail's real weight. Andreas (and other german speakers) might want to read a discussion (in german) i tried to bring up about this issue some while ago:
https://www.openbc.com/cgi-bin/forum.fpl?op=sho...

Would bei interesting to know if somebody shares any of these ideas.

Cheers, Ralf

Re: Special Report : Profit Sharing - The Performance Marketing Model of the Future

carsten cumbrowski — Thu, 12 Oct 2006 02:21:10 -0000

Hi Vinny,

thanks for your comment at my blog at ReveNews. Very good post regarding the problem. I wrote actually a series of posts related to the issue.

I addressed several of the ulcers that grew in this industry creating problems for merchants and affiliates in the various marketing channels.that shouldn't be there.

I don't like the phrase Affiliate Marketing either. The meaning in the offline world is quite different than online . How did Beth Kirsch put it so nicely (repeated in my own words): A lot of smart people in the internet marketing industry are not getting it, what affiliate marketing is really about and how it works.

A lot of issues are caused by dangerous "half/incomplete" knowledge or complete misunderstanding of the matter altogether (without realizing or admitting it).

I agree that Performance Marketing is the better term. It is for years the "tag line" for Affiliate Marketing already so lets make the tag line to the headline ;)

Affiliate, excuse me, Performance Marketing works only well and long term, if a strong relationship between Advertiser and Publisher was established which gets continuously reinforced and strengthened.
A relationship that is profitable and beneficial for both parties alike and not just one-sided. Clear defined goals that are openly addressed and discussed between affiliate and advertiser is important and the establishment of trust is absolutely vital.

Everything else is predatorily business practice or competitive marketing, which brings two parties together that are actually enemies, only to fight a mutual (and bigger) enemy of both of them.

This does not make them friends. Both sides are secretly waiting and preparing for the day that the mutual enemy is defeated in the hope to be able to then turn around to the previous "partner" to slaughter him in cold blood, while he is the least expecting it.

Well, the one thing we can do about this issue is educating the one that want to be educated and to seek open dialog and discussion like done here via Blogging about it and not leaving things sitting and rotting in the back of the closet until it becomes a problem that is not solvable anymore.

Cheers,