Does your agency manage risk?

Yesterday, we attended the Search Marketing Expo West event in Santa Clara, California. One of the topics that captured our interest was the Landing Page and Multivariate Testing session. The goal of landing page testing is to increase the number of visitors that become customers on a business’ website.

After listening to the panelists present case studies with results and innovations for testing, we asked the panel about risk management. Specifically, with client budgets on the line, what is the best approach to manage and limit risk from a testing regimen?

Surprisingly, the answer that the panelists unanimously agreed upon was, “It depends on how much the marketer is spending.”

To be fair, the panelists were there to promote the benefits of testing and thinking about the sample size needed to determine when a test has enough data to declare it the winner. However, the assumption that all tests are winners and that risk depends on how much the marketer is spending may not take into account the marketer’s best interests and business requirements.

A test by nature has unknown results and there is always an equal chance that the test will deliver very poor results. Risk management is not a subjective determination based on spend; it is an objective decision based on business requirements. Before setting up a testing regimen, it is critical that both marketer and agency have a discussion to determine and design what threshold of risk will be inherent in the test.

Simply put, before launching a test, always ask, “What is the downside?”

If you would like additional information on marketing tests and risk management, please contact a Thrivepoint Advisor.

© 2009. Thrivepoint LLC. All Rights Reserved.