What Are We Doing Here? The Importance of Setting Goals in Performance Marketing

Posted by Brad Beiter, Account Director

So you find yourself at a nice little Fortune 500 company.  You’re charged with managing the organization's performance marketing initiatives.  But this isn't 2002. We can't just turn on Google Adwords, stuff the site full of keywords, buy 100,000 inbound links for $19.95, and manage bids with an Excel Macro that your cousin's college roommate created.

This is the real deal.  Performance Marketing now has a seat at the big kids’ table. You need to show you’re not a cost-center, that you’re not stealing sales from other channels.  You need to show that you are acquiring new customers, clients, and clicks – in a profitable way.

Forget new economy.  Forget Web 2.0.  This is the New-New Economy Web 3.0.  Old fashioned concepts are once again in vogue.  Metrics like return on investment (ROI), return on ad spend (ROAS), conversion rate, average order size (AOS), application funding ratio and effective revenue share (ERS) are what every advertiser is talking about again.  Advertisers need to leverage these metrics to set a target and create a well-developed plan on how to get there.

Many seem reluctant to set goals.  However, if we don't set a target, there’s no way to know if we’re doing well or doing poorly.  Some will be happy with setting a goal of "growing" or "better than last year."  We tend to avoid these types of goals.  What if we don't grow fast enough?  What if last year we started with a smaller base, thus making year over year growth easy to produce?  What if there was a huge traffic driving event last year and there’s no way to reproduce it?  Productive goals need to be exact and informed.

A quick example might make this simple to understand:


Widget Wonderland Worldwide, Inc. saw paid search sales of $50,000,000 for 2008. If paid search is projected to grow at 5% for 2009 (according to eMarketer) then we should target sales growth of 5% too.  But wait; was 2008 a typical year for WWW, Inc.?  No.  Widget Wonderland launched its brand spanking new wPhone that everyone just had to have.  With no new product launches set for 2009, we may have to actually manage some negative growth when compared to 2008.

Metric-driven goals are an absolute necessity in online performance marketing.  The more your goal is rooted in realistic measures, the better off you’ll be.  Work with your Performics’ Client Services team to identify proper key performance indicators (KPIs) and develop a strategic plan to reach them.  Performics is dedicated to helping you achieve your goals and keeping your seat at the big kids’ table secure.

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