Should You Really Do Pay Per Performance Search Engine Marketing?

What Are The Pros and Cons of Pay For Performance Search Engine Marketing?

Rarely is something all good or all bad, and Pay for Performance Search Engine Marketing is no different. So do its advantages outweigh its disadvantages for your situation? What evaluation process can you go through to determine if it's right for you? And how can you accentuate the advantages, and minimize the disadvantages?

Typical Criticisms of Pay for Performance Search Engine Marketing
Both clients and SEO firms have tried Pay for Performance search engine marketing, and report having issues with implementing the process including:
  • Not being able to control all of the factors the need to succeed (the old problem of “responsibility without authority”
  • The time it takes to achieve results often exceeds the length of the “commission” (pay back) period
  • Given the need to produce results quickly, the agency is incented to take shortcuts, ones that could hurt the client such as black hat tactics (dubious linking) or just bad work (poor keyword targeting, poor on page optimization, duplicate content, etc.)
  • The time it takes to achieve results often exceeds the length of the “commission” (pay back) period
  • Given the need to produce results quickly, the agency is motivated to take shortcuts, ones that could hurt the client such as black hat tactics (dubious linking like link wheels or forum/review/social media spam) or just bad work (poor keyword targeting, poor on page optimization, thin/spun/ duplicate content, etc.)
  • The results can be short-lived (mainly if any of the shortcuts listed above are taken)
  • If not done correctly, performance-based search marketing/SEO can affect the entire site’s performance
  • If the performance-based agency is reimbursed for generating traffic, how do you know that it was because of their efforts rather than normal search flows
  • The quality of the traffic may not be converting into sales
  • No way to terminate the contract or agreement if things do not go as planned

Key Pay-for-Peformance SEO Questions

A photograph of sliced kiwifruit on a while plate

1. What's the Goal: Are you hoping to lower risk, increase performance or get a more motivated SEO supplier?

2. How quickly are you expecting results?

3. Even with an "escape clause," can you honor a long-term contract and relationship?

4. Can you provide the pay-for-performance SEO provider with enough access and information for them to be successful?

Reasons You Should Try Performance-Based Search Engine Marketing
And of course there are clear advantages of Pay for Performance Search Engine Marketing such as:
  • Fee-for-service search engine marketing is often difficult to measure, particularly in the short term as most SEO techniques can take months to manifest results; paying for performance eliminates this problem
  • Pay for performance can be faster, particularly if the firm/agency doing the work really believes it will pay off (and for that they should do a proper ROI analysis that both sides believe in)
  • If the agreement is structured correctly, performance-based search engine marketing eliminates the problem of not having the correct tools, authority level or freedom to perform, a common “excuse” of many SEO firms
  • If the compensation is focused on something very clear (like traffic increases) versus harder to measure factors such as sales attributed to a particular visitor behavior like landing on a page first before buying something (sounds straightforward, but what if they had been to the site before from a different computer, or if they had been a customer a year ago which is work to check)
  • The work done on the site can (and should be) segregated so that it can both be measured and the impact controlled if anything was done incorrectly (a simple way is to keep all added pages or structural additions to a page set in a separate directory or subdomain)
  • To ensure traffic is qualified, you can (and should) participate in a keyword study and approve the keywords to be targeted based on past conversion history; you can fairly accurately measure the impact of added traffic on conversions using “first touch” and “last touch” analysis (found in Google Analytics)
  • The technique above can also help solve the “attribution” problem where the agency is paid for results that would have happened anyway, for example, by paying only on traffic to landing pages added by the agency, it’s pretty indisputable where the traffic came from and why
  • If there is a reasonable way to terminate the contract such as a buy out or conversion to another type of payment such as a retainer under certain circumstances
  • You own the results long after the payment period has ended (you shouldn’t structure any agreement that has an infinite “commission” period, or else you might as well just pay for clicks directly from the search engines)
What About Pay For Performance Lead Generation?
We also provide a "pay-per-lead" approach for B2B companies that plan to close the sale in person, not on-line. The reason we offer this is that it uses the same upfront principles as focusing on increasing traffic flow to a website. However, because there are fewer variables, it makes more sense to essentially charge for each lead that is generated rather than on a traffic-based model. Since our offering typically includes creating some type of information (whitepaper, study, e-booklet, infographic, etc.) in exchange for contact information, here are the key issues:
  • The client pays only for a particular completed lead, based upon pre-determined contact information such as email, name, phone number, etc. rather than precursor activities like ranking or traffic to the site
  • As with any lead generation approach, lead quality will vary based on factors such as how well the traffic is targeted, how much contact information is asked for, the quality of what is being offered in exchange for the lead and the mediums used to promote the lead offer
  • All of the factors that go into the lead generating program should be analyzed based on past experience and also distilled into a workable, measurable program that can be constantly improved
  • While a lead is the key measurement, the program should also include interim measurements (as with search engine marketing) including bounce keyword analysis, offer testing, visitor behavior on site such as bounce rates and number of pages visited and of course landing page testing
  • Best practices should be to include the lead disposition in a suitable customer relationship management (CRM) package to judge lead quality by doing cross sales team analysis (i.e. if no team member closes, it's a lead quality issue, but if one team member closes the lead and another doesn't it's potentially a team member issue

The search engine marketing pay for performance approach strikes a balance between the natural advantages and disadvantages of performance-based search engine marketing. It analyzes the real potential so that each side is honest about the potential, and uses the best practices and approaches to ensure practical results. If this sounds interesting, we encourage you to take the next step and let us do a structured return on investment model to see if it may work for you.