• by John Nardone , Op-Ed Contributor, January 2, 2009

As I write this, no word better describes the 2009 economic outlook than grim. Retail season projections look very pessimistic, and consumer confidence has dipped lower than any point in recent memory. Some marketers have already slashed their 2009 budgets while worrying about how they will respond should things get even worse.

They'll need to ensure every dollar spent works hard, and maintain the flexibility to respond to changing conditions. Most will pour a significant percentage of those budgets into performance-based marketing programs. Traditionally, direct mail, DRTV and telemarketing would fall into this category. Recently, more and more "performance dollars" are being directed online, to search marketing and cost-per-action display ads. Regardless of the vehicles used or the media mix, in this economy, the mindset should be that all marketing is performance marketing.

Some brand marketers may resist this premise. They will argue that even in a tough economy, long-term brand building remains important, and that a singular focus on short-term sales will "mortgage the future." Yet a false premise buoys that argument: that long-term (future) sales are unrelated to short-term sales. In fact, most econometric research demonstrates that marketing that does not generate short-term sales will not generate sales in the long term. Thus, marketers who drive short-term sales also ensure long-term sales.

As consumers closely cradle their wallets, the best route to short-term sales for consideration-based categories lies online, beginning with search. Consumers have spent far less on impulse or desire purchases, and far more based on need. And when they have a need, they will search.

In fact, my former partner, Ed See, of Ed See Associates, proposes that the traditional funnel taught to every entry-level marketer (awareness, consideration, intent, purchase) is now wrong, and I agree. We instead propose a new funnel: need, then awareness based on search results, followed by investigation and purchase. This view puts the Internet at the center of the purchasing process.

Marketers following this new dynamic should focus on these keys to success:

Set up all parts of the marketing plan for continuous feedback. Ensure your success metrics relate to or tightly correlate with sales. Don't be afraid to use logical proxy measures for things you can't directly track. Also make sure metrics are not just measurable, but trackable and adjustable in near-real time.

Focus on getting the Web presence right before committing to supporting media. The strategy, structure and quality of a Web presence all matter. A small change in Web conversion or action rates can change program ROI by a large margin, so spend the time and money to test ways to improve site performance. The best approach is not always intuitive, so don't assume that a landing page is better than funneling clicks directly into the Web site, or vice versa. Don't bet on visitors being homogenous. Explore dynamic targeting to deliver the right content to the right person. And test, test, test.

Account for cross-channel synergy. Successful marketing plans create and take advantage of synergies across channels and across media. While not all parts of the marketing program will be equally measurable, the plan as a whole has to deliver the targeted ROI. Be sure to set the performance goals for the most measurable plan components so that the plan as a whole delivers.

Ensure the attribution approach is understood and has management buy-in. Will sales be credited to the campaign based only on click-through? Or will view-throughs count? Or a weighted combination? Over what time window will they be counted? One day? One week? One month? When using view-through, beware of incidental attribution. Some online ad networks rig attribution by flooding the market with cookies carried by instant messaging, increasing the odds that their cookie will have "last view" and thus get credited with the sale. Many of these sales were influenced by other media and would have happened anyway.

Following these principles, marketers can construct cost-effective marketing programs that deliver ROI in both the short and long term - and make management and finance champions of performance-marketing initiatives.