Performance marketing has completely changed the way companies advertise and sell products. It has also impacted the way we measure the success of marketing campaigns. In the past, attribution was nearly impossible.
Today, performance marketing campaigns give you the ability to measure everything from brand reach to conversion rate down to a single ad. This new age of data-driven marketing has given advertisers valuable insight into their performance, which has helped them optimize their campaigns according to the best cost per acquisition.
As advertising becomes more transparent, advertisers are looking beyond branding to build marketing strategies with proven ROI. Performance marketing was born from a need to decrease cost per acquisition and increase ROI. With performance marketing campaigns, advertisers pay when a specific action is completed, rather than for impressions or clicks.
What Is Performance Marketing?
While major corporations can spend millions of dollars on branding, most businesses need to focus on the bottom line to stay profitable. Performance marketing puts power back in the hands of the advertiser.
You determine the action, then pay when that action has been completed – whether it’s a sale, lead, or click.
Benefits of Performance Marketing
There are many benefits to running performance marketing campaigns, including:
- Easy-to-track performance
- Low risk
The main benefit to performance marketing is that it’s 100% measurable. Thanks to new technology and advanced ad platforms, all your campaign metrics are tracked and reported for your convenience.
In addition to better tracking, performance marketing is ROI-focused, which means less risk for the advertiser. With less risk, quicker launch times are possible. No more pushing for approvals.
What Makes It Unique?
In most traditional forms of advertising, the advertiser pays a fee up front for ad space independent of performance. That could mean hundreds to thousands of dollars spent without ever seeing a conversion.
With performance marketing, advertisers only pay for successful transactions.
Measurable ROI is key to successful digital marketing. There are several ways to track performance, including the use of marketing tools. It’s important to track ROI regularly, but give your campaigns time to gather data. It’s impossible to optimize any campaign without adequate data.
The Evolution of Performance Marketing
Performance marketing has evolved over time thanks to new technology and changing consumer behaviors. In today’s performance-driven world, digital marketing is all about “hitting the right people on the right device at the right time.” Desktop now falls by the wayside, as marketers and their clients look to reach people on mobile.
This new landscape is changing practices long favored by SEM and SEO professionals. Search engine optimization professionals who previously relied on keyword optimization and link building to improve website rankings now must look for ways to utilize unique and engaging content. Likewise, search engine marketers had to learn to navigate complex enhanced campaigns, how to optimize for mobile, and how to leverage PLAs.
Like with any marketing campaign, there are some potential challenges and pitfalls that can come with performance marketing campaigns. These may include compliance-related issues concerning regulatory rules, publisher fraud, and placement transparency. Fortunately, there are several tools, such as fraud detection, that advertisers can use to avoid these problems.
Before you can measure the success of any campaign, it’s important to establish your campaign goals. Whether it’s to generate brand awareness or sell products, it’s important to set goals prior to launch. Many ad platforms require you to establish goals before creating ads or setting up campaigns. Your campaign goals determine where your ads are shown, who they’re shown to and other factors vital to success.
The most popular digital marketing goals are:
- Website Traffic
- Repeat Visits
- Lead Generation
Once you have established your campaign goals, you can use ad platforms to create campaigns that target those specific goals.
Your strategy should be based on your business goals. For example, the strategy for a lead generation campaign is very different from one built to grow brand awareness. Once your campaign goals have been established, begin to research ad opportunities. Whether it’s through affiliate marketing, content marketing, or a social media platform, look for companies that specialize in your conversion type. Part of your overall strategy includes building a strong team. To build the ideal marketing team requires:
- Evaluating and improving existing teams
- Growing your team by filling in gaps
Measure the strengths and weaknesses of your employees and gauge their expertise. Rate your team before you begin, and work towards constant improvement. Document and set goals to ensure team growth.nm
With a strong team and a well-developed strategy, you’re ready to launch your performance marketing campaigns.
The real work kicks in post-launch. Campaigns begin to generate data the moment they launch. It’s up to the marketer to optimize individual campaigns for performance, but the advertiser must also optimize for top-performing ad sources. Keep track of analytics and metrics to determine which sources of traffic are performing best, then allocate ad funds accordingly. Use performance marketing campaigns to grow sales and increase your return on investment.