We were in a meeting with a client yesterday to discuss a performance-based advertising campaign. As I was explaining the difference between performance-based tactics and traditional tactics, I found myself wondering, “shouldn’t all advertising be performance-based?”

With performance-based advertising, you only pay for measurable results. How many prospects called? Walked through your door? Sent you an email? With this data, you can reduce your campaign to a cost-per-contact figure. This makes it very easy to determine whether or not it’s worthwhile and working. Historically, pay-per-click advertising online has dominated this category, but it is rapidly expanding into other media as well. Mobile marketing, word-of-mouth, and direct marketing are some examples of categories beginning to toy with performance-based models.

On the other hand, with traditional advertising, you pay regardless of the results. You’re going to write a check for that TV spot or print ad whether you gain new prospects or not. Traditional media has typically covered this gaping hole in logic by labeling traditional advertising “awareness advertising.” What John-Doe small business owner knows how to measure awareness? Sure, on its face it makes sense - plaster billboards all over town, folks see it, and become aware. Sounds reasonable enough, in a very non-scientific sort of way. But what does the consumer do with that awareness? And, more important, how can you measure it and assign it a value so that you’ll know when you’re getting a good buy or getting ripped off?

Here’s the rub: why would you pay thousands of dollars per month for this nebulous idea of “awareness” when you can pay the same amount of money for actual, real-life customers who come to your place of business to buy stuff? Do you know what your cost-per-awareness is? Or, would you sleep better at night knowing your cost-per-customer? Hmm…

We’ve been so dumbed down that we expect very, very little from traditional advertising. Therefore, when we don’t achieve huge results, we aren’t surprised or disappointed. My print ad was seen by 150,000 people last month and I got 15 customers as a direct result? Fantastic!

Huh? Since when is a .01% conversion rate acceptable? Would you accept the same results from your sales team? What about from your favorite quarterback? (are you listening, Vince Young?)

Why, then, do we accept such poor results from our advertising?

In my opinion, the performance-based model is the way of the future. ALL advertising should be performance-based. If it doesn’t perform well, STOP DOING IT. Do something else instead.