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Online Marketing Risk Management

Written by Nico Black

Digital Strategist and early-stage investor, Nico is also an AdTech enthusiast. He has over a decade of digital marketing experience and has been investing in tech companies since 2006.

December 29, 2011

One of the most interesting delimitations of jobs in the modern day world is the concept of risk. Different jobs have different levels of risk:

  • Bankers – they handle other peoples money, no risk
  • Entrepreneurs – they take the risk and keep the money
  • Artists \ inventors – no risk, no revenue – but much gratification

All vocations can be broken down based on the concept of risk. Today I was reminded of that concept twice. First, when I read an interview with Nissim Taleb, the author of Black Swan. A book in which he explains the force of events and crisis that can upset large systems – mainly economic ones.  Basically going back to linking chaos theory with Marx’s critique of capitalism being prone to periodic crisis. The second instance was when I was watching The Dragons Layer – which is the Canadian format of an entrepreneur pitching some investors. It reminded me of an early and very sad episode of the American equivalent I saw many years back.

But with business being all about risk management (as entrepreneurs we take risk and work towards rewards), the questions is – what is too much risk? In the case of online marketing ,the answer is very clear. If you are working towards a single metric: profits, that is the end all be all of your efforts.

That is why performance-based online marketing, and in our case lead generation, make a lot of sense. You can set a budget to test, run a campaign and gauge the outputs very easily. Using such methods of performance-based marketing as part of the marketing mix is very helpful. It helps test the market early, cost-effectively and an affordable manner. This helps to avoid sinking too many resources into a bad product or campaign. Which is the (very unfortunate) case of the video shown above.

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