Lee Odden

Reader Poll: Getting Paid Based on Performance

About every 2 weeks we get calls from companies that feel their growth opportunities are so significant, outside marketing vendors are expected to be paid based only on performance. I know there are some search engine marketing consultants that take on pay for performance or marketing partnership deals, but very few agencies that do.

It’s one thing for a consultant with low or no overhead to be able to spend the time it takes to build momentum on such a project but another thing entirely for an agency with capital expenses, salaries, etc to pay while the PFP program gets off the ground. While those issues can be overcome as part of the cost of the venture or risk, not having full control over web site functionality and design, after the sale actions and content can be problematic.

reader poll

I am curious if readers of Online Marketing Blog have opinions and experiences with pay for performance projects specifically with SEO related projects?

Do you take on pay for performance SEO projects?

  • No (66%, 23 Votes)
  • Yes (17%, 6 Votes)
  • Partial - Explained in comments (17%, 6 Votes)

Total Voters: 35

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Lee Odden About Lee Odden

@LeeOdden is the CEO of TopRank Marketing and editor of Online Marketing Blog. Cited for his expertise by The Economist, Forbes and the Wall Street Journal, he's the author of the book Optimize and presents internationally on B2B marketing topics including content, search, social media and influencer marketing. When not at conferences, consulting, or working with his talented team, he's likely running, traveling or cooking up something new.


  1. Wow, this is the suckiest turnout yet for one of our Reader Polls. I guess I asked the wrong question!

    Thank you to those brave souls who did dare to click. 🙂

  2. We don’t but that doesn’t mean to say that we wouldn’t it depends on the client. To make this kind of concept work, you really need the client to want to make it work as well. all too often, despite all the education you try and provide, the client expects you to wave the magic SEO wand and get number 1 rankings for all their terms on just half a days work.
    Guess I’m a bit a bit testy today.

  3. Simon, you’re right on. Some companies do have unrealistic expectations or possibly have been able to get other companies to do work for free using revenue sharing as a carrot.

    I think PFP can work, just not as easily for an agency.

  4. I should have clicked “partial” instead of yes. I’ve had clients in the past like this, but things often went wrong and I grew to be wary of any pay-for-performance contracts. I do however, have two freelance clients I continue to happily work with on that model because we have a terrific relationship and great performance. If they weren’t a best-case scenario I wouldn’t do it and like you said, Lee, if anyone has low overhead, it’s like playing with fire.

  5. Partial.
    Because SEO is a difficult concept to evaluate/compare different offerings for many clients, we charge a rate which reflects the work we do and receive a bonus when we deliver at the top end of expectations.
    This method gives the client comfort and us an incentive – all good stuff.

  6. I think pay for performance and pay for service are essentially the same in the long run. The client will look at what it costs versus what they get and decide if the relationship makes sense.

    Pay for performance opens additional risks to the consultant because you have to find a way to keep score. That’s not always easy to do. Additionally, you have to worry about losing income if the client fails to follow through on recommendations.

    I prefer for clients to pay for services when rendered. That gives them an incentive to fulfill their responsibilities promptly. Because I don’t demand long term contracts, any client is free to walk if they don’t feel they are getting value for money. This arrangement seems to minimize risk for both sides.

  7. We used to do a lot of pay for performance work in our agency, but moved away from it. I think the biggest issue we saw was how dependent our payout was on the client’s abilty to execute. Ultimately, even the best inbound traffic requires a lot of heavy lifting on the client side to turn the clicks into outcomes.

  8. Partial
    I do some lead generation and have based much of it on a ‘pay for performance’ basis. Since there is low overhead (basically activating a telephone # on a page) I’ve been able to follow that model. There’s bigger payouts on leads vs. clicks and so far the model is working well and is manageable.

  9. You asked specifically about SEO but I’m going to throw in my two cents anyway. I believe that pay for performance will be the trend of the future when the ability to track results is more accurate (or we at least measure what percentage of results we’re actually measuring).

    I do not do SEO as I specialize in ppc and am moving more toward total Internet strategies. For PPC work I would actually prefer to be paid for performance. It lends itself more to that though as results can be obtained much faster.

  10. That’s a good point Rose. With PPC you do have more control and you do have the opportunity to see results more quickly, adjust and refine on the fly.

  11. If those calls are from IT product manufacturers with expensive gear, send them to EchoQuote. Although SEO is not our primary focus, our B2B Self-Service Pricing Tool grabs prospects like glue. Basic SEO is all they need. We operate on a pure pay for performance model (fixed price per quote) and are perfect for companies with good products but immature sales channels.

  12. Lee, Clix Marketing works exclusively on a pay-for-performance model. As previously pointed out in this thread, this is more straightforward for a PPC-only agency like ours. We’ve worked out the difficulties of tracking performance, and we have no trouble convincing clients to agree to a monthly minimum payment so that our costs are covered.

    Clients love pay-for-performance, especially the ones who pay us a percentage of PPC-produced profit – i.e., our fee is a percentage of PPC revenue minus PPC ad spend. So the client/agency team members are all focused on the same thing: continually increasing revenue while maintaining a low cost-per-sale.

    I’ll be happy to go into more detail with any blog readers.

  13. At our agency, we do PPC, SEO, WoM etc. On the SEO side, doing ROI-based SEO is difficult because we have limited control over the conversion process – every page is a potential landing page. With PPC, we can create custom landing pages, so we have far more control over the conversion process.

    That said, even with PPC, inventory availability, customer service, brand awareness, website technical issues and overall usability are all huge factors that we have little control over but effects our ability to the “pay per performance”.

    So, in shorts, I think it’s pretty difficult to truly do a “pay-per-performance”, unless we can examine (and even somewhat control) many aspects of the client’s business – from conversion process to sales/support.

  14. Daniel, I agree that factors beyond the PPC agency’s control can have big effects on performance.

    We’ve learned to assess these factors in the pre-sales discussions, and factor them in when we negotiate the pay-for-performance compensation formulas.