11
Jul

2014

The Good and Bad of Pay Per Call Performance Marketing

Pay Per Call
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Performance marketing for most people is a somewhat confusing term. In terms of the advertising world, it is arguably the most misunderstood marketing concept that there is. Part of that may stem from the fact that it has only been in existence for a little over a decade and even the most senior executives don’t always have a completely accurate understanding of what exactly it is. It is primarily for this reason that performance marketing, and especially pay per call performance marketing, has not reached its full potential as an advertising medium. If the perception were to improve, or at least be clarified to some degree, it might get the respect it deserves.

An Easy Definition

Perhaps the easiest way to define performance marketing is to say that it is essentially paying outside representatives to advertise your business. For example, if Nike hires individuals who do not work directly for the company to advertise its products and draw customers to make a purchase, then Nike has just engaged in performance marketing. Likewise, pay per call performance marketing is a system in which a business pays an outsourced marketing company to generate calls by interested potential customers. While it this form of marketing is still an emerging advertising method, there are benefits and drawbacks to it that many have already defined. So what exactly are some of the things that people in the know consider advantageous about performance marketing? There are things about it that can have a tremendously positive impact on a company’s marketing ROI.

Huge Market with Big Upside

First of all, performance marketing is a $25 billion industry and is growing steadily every year – with pay per call growing rapidly as well. Almost 70 percent of ad-related transactions that take place on the internet are paid for on performance. Some of the most recognizable brands such as Walmart, Target, and H&R Block use performance marketing. One of the reasons companies are willing to pay the millions of dollars that they do to utilize performance marketers is because it is completely centered around ROI and the results are entirely measurable. There are multiple channels through which performance marketing can be tested such as search, email, social networks, and others which speaks to its versatility. And most performance marketers are able to start their businesses for an initial investment of $10,000 or less. Of course, for many sales organizations the most important thing is to have the phone ring with a qualified customer on the other end. There may be no better way to make this happen than outsourcing the job to a performance marketing firm.

The Downside

On the other hand, there is considerable downside to this medium as well. One of the most glaring objections that marketers have is the rampant fraud that is able to be perpetrated with both sales campaigns themselves as well as with lead generation. Since the bulk of performance marketing is done online, it is easy for fraudsters to commit their crimes and hide their tracks in doing so. Also, federal regulations in the United States as well as in other countries are implementing privacy laws that make it increasingly difficult for marketers to utilize some of the tactics necessary to market their wares. And possibly one of the worst drawbacks is that legitimate marketers can be held liable for the actions of fraudsters who commit internet crimes in their name.

Though these situations can be difficult on the side of the marketer and client, they also serve to weed out the good companies from the bad. Overall, reputable pay per call performance marketing firms are judged by the quality of the leads they deliver, making this performance marketing niche less prone to fraud and some of the other abuses seen in other performance marketing niches.

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