🤓 What’s Killing Your Campaign?

It’s tempting to think that all marketing agencies are the same and provide the same service, but this assumption is far from the truth.

Let’s talk about differing strategies and concerns regarding the prevalent Performance-Based Marketing (PBM) services offered by many agencies.

What’s Performance-Based Marketing?

Performance-Based Marketing (PBM) means commission-based sales.

In short, the marketing agency gets paid a portion of each pledge they can link to their ads. It’s commonly described as a “risk-free” approach to combining your interests with the marketing agency.

PBM agencies have the added benefit of fronting the advertising spend to run your ads, allowing publishers to pay after the campaign concludes and once all crowdfunding pledges are charged.

This sounds great right? So what’s the problem?

It’s two-fold:

1. Your goals might not align with the agency’s financial incentives
2. Accurate one-to-one tracking is impossible for crowdfunding

A Problem of Incentives

PBM agencies are driven to boost sales, regardless of whether the cost per acquisition is sustainable.

Because you’re covering the advertising costs, the PBM agency benefits the most in this arrangement.

If you acquire sales at an unaffordable cost, you stand to lose a lot.

This arrangement can make campaigns look impressive with larger numbers of backers, but are barely profitable (or not at all) due to poor ad-spend/ sales advertising ratios.

A marketing agency’s aim should be sustained business growth, not merely sales acquisition.

This might mean spending less to acquire sales later at a better cost.

Should your goal be to have a large campaign that generates buzz without being very profitable, then PBM arrangement might be the right fit.

If growing your customer base, finding international distributors, or increasing brand awareness is your aim, PBM may not be the best value.

A Problem of Accurate Sales Tracking

All advertising campaigns leverage simple math; you want your gross to be 3-5 times your ad-spend. Meaning every $1 you invest, you’re earning $3-$5.

The problem is determining the link between ad-spend and final gross.

Even Meta struggles to precisely connect ad expenditure to revenue when API integration and custom code are used on closed websites.

Meta leverages AI to model assumed results, which are always exaggerated.

This means the sales data in Meta Ad Manager is a calculated guess, not hard numbers.

This is the same for every sales analytics tool.

Too many factors, like device types, operating systems, fingerprint hiding, and ad blockers, make the data unclear.

The PBM agency will add an arbitrary amount to their recorded sales as the assumption is that the tracking is not 100% accurate and the true sales volume is higher.

Otherwise, they will glean data from Meta itself, which exaggerates results.

Either way, the costs for this PBM service are obfuscated, and your ad campaign profitability is even harder to determine.

A Different Approach

Be careful of agencies cherry-picking their wins.

It is very easy for any marketer to present their most successful projects while sidelining failures.

There are many Facebook groups and subreddits where you can ask for testimonials of various marketing agencies from publishers themselves.

There’s no magic formula for success.

A thriving crowdfunding campaign is the combination of a solid product, an outstanding offer, and strong effort.

That’s why we at Crowdfunding Nerds can’t and won’t promise certain results; what’s within our control is that we promise to work hard.

Everything that’s worth pursuing requires effort; we embrace this, and it’s our only quality assurance.