• by Norman Guadagno , Op-Ed Contributor, November 26, 2007

Marketing has always been about creating value. However, during the last decade, measuring this value has radically evolved. Today, marketers seek new ways to move beyond reactive and qualitative results in exchange for a more measured approach that incorporates actual outcomes and the ability to conduct real-time adjustments. Such results tie marketing decisions to business value, and transform marketing initiatives into ROI-driven activities. Marketing is no longer about activity--it is about performance.

Spending Online

As companies continue to spend millions to deliver customers the rich, interactive experiences they demand, the impetus for marketers to demonstrate proven value has increased, and thus the concept of performance marketing has emerged. Simply put, performance marketing seeks to maximize the ROI of all initiatives--both online and offline --over the long term. As a result, performance marketing often rejects creative branding projects that can win industry accolades but fail to drive business goals. Performance marketing also rejects shortsighted tactics such as page packing--which, while increasing click-through rates, harms the long-term reputation of a company's Web site and ultimately their brand. Performance marketing advocates for performance-driven design, a process that seeks to identify the ideal mix of creativity and data that drives long-term business benefits. And used effectively, performance marketing enables marketers to strengthen their hand at driving business value, transforming their role into an ROI-driven discipline.

Applying Web Analytics

The debate on the role of Web analytics stops here. Analytics isn't a design strategy--it's a part of performance marketing that seeks to measure ROI on Web promotions. Analytics should be used to create insights into your processes and then enable you to take action based on its findings. Using Web analytics in conjunction with Key Performance Indicators or KPIs, marketers can measure data and take action based on results. Actions can vary from canceling a campaign to redesigning an initiative in order to better understand the dynamics of customer behavior and ultimately model offerings that take advantage of that knowledge.

When Ugly Works

Sometimes, great design doesn't matter. For example, one of our clients, a credit union, outsourced their online operations. To us the experience was awful, with heavy blue buttons, dark backgrounds and blocky links. We were asked to resolve two questions: first, was the experience so unappealing that their users wouldn't be happy, thereby affecting overall brand perception and the bottom line? And second, was it possible to reach out with cross-selling or community opportunities? We applied Web analytics, tracking sign-ups and defection rates, working with the vendor to enhance branding and place promotions inside the experience, and in the end examined the performance of these initiatives.

We were surprised by the results. As it turned out, the experience--as unappealing as it might have seemed--had no visible effect on customer retention, satisfaction rates or brand perception. People were happy with the service and fine with the appearance. We also learned that users weren't interested in anything else when assessing their state of finances. In the end, the recommendation to keep the tool and not bother advertising on it saved them money, enabling them to put it where it would provide a greater return.

In this case, like most, when used properly, performance marketing doesn't serve as a threat to designers, usability experts, or anyone else in the organization. It provides the foundation of a holistic business strategy that leaves designers free to be creative, usability experts open to shape the experience and ultimately allows the company as a whole to monitor Web initiatives and make well-executed adjustments that benefit all parties. Performance marketing allows everyone to bring their "A game" to the table and clearly see the results of their efforts.

Guadagno is the CMO at ZAAZ (www.zaaz.com) where his responsibilities include corporate brand and communications, marketing strategy, strategic partnerships and high-level client engagements. During the past 10 years, he has brought dozens of software products to market, rebranded and repositioned companies and products, and helped drive thought leadership across multiple technology sectors.