In this digital world, every business wants to be online and expand the opportunity to reach new customers and markets. Today, almost every company has a website, and those that don’t at least have a digital advertising plan or a social media presence.
Now the question arises: Does every digital marketing campaign get the results you want? Your business ads on digital channels can increase your market presence and get you favorable results, but sometimes you fail to achieve your goal and end up losing money on the campaign, just like Rickon Stark in Game of Thrones: present but useless. How about paying money only for successful campaigns? — Let’s give this authority to performance marketing.
What Is Performance Marketing?
While it seems like everyone has their own vague definition of what the term might mean, many get it confused with digital marketing or affiliate marketing. Luckily today, we’ve got the full explanation of what performance marketing actually is, how it works for businesses, and some useful tips for getting started.
Performance Marketing, or Performance-based Marketing, is a form of digital marketing strategy where advertisers pay the service provider (affiliates, marketing companies) only when their business objective is achieved, such as a click, share, sale, or lead generation. It measures the result of a campaign with data transparency, which enables marketers to optimize the campaign and perform better. It helps advertisers adjust their campaigns and track their return on investment (ROI).
In this article, we will take a deep dive into how performance marketing will help your business and why you need it for a win-win situation.
“As long as you are better than everyone else, we suppose it doesn’t matter how.” Jamie Lannister and I both feel the same.
Benefits of Performance Marketing:
- Measurable: Performance marketing is 100% measurable. With the help of various digital tools and data analytics software, the results-driven through performance marketing can be easily tracked. This allows businesses to see how their campaign is performing and then make adjustments to improve it and target different segments and demographics.
- Cost-efficient: Performance marketing uses a pay-per-performance business model in which the advertiser only gets paid when a certain action, such as a sale or lead, is completed. As a result, the advertiser may more effectively manage their advertising budget because they only pay for outcomes.
- Highly targeted: Due to the advertiser’s ability to select the precise actions they wish to pay for and target their ads to the audience most likely to take those actions, performance marketing enables highly targeted advertising. It is also used to retarget audiences who have already visited or are interested in your website but haven’t taken any action.
- Creates brand awareness: By targeting specific demographics and audiences, performance marketing helps businesses reach the audiences that are actively searching for the service or products they provide. Using relevant keywords and targeting a specific audience will increase the visibility and reach of your brand through various digital platforms.
- Optimization during the campaign: The best and most unique feature of performance marketing is that you can track performance in real-time i.e. while the campaign is in progress. You can see where advertisements perform well and put more emphasis on those platforms by placing advertisements across numerous channels. If you see one tagline that works better, you can adjust the others while the campaign is still running.
- Scalability: Performance marketing helps advertisers easily reach their target demographic and accomplish their goals since they can be quickly scaled up or down depending on how well they perform.
- Low risk: With performance marketing, businesses invest their money after the result is achieved and do not waste their money on campaigns that fail to drive results, such as traditional ads. You can also test and optimize the campaigns before scaling them, which can also reduce the risk of loss.
Now here comes a big question: How to measure Performance Marketing?
To help you better understand performance marketing pricing, we’ve selected some of the most popular metrics and KPIs. It helps in measuring the performance of your ad campaign as per your objective. Whether your objective is to increase brand presence and generate more leads or subscriptions, these few acronyms will make measuring the campaign very easy and transparent.
- CPM– Cost per impression or thousand impressions is another name for CPM, which stands for cost per mile. Here a predefined amount is paid by the advertisers for every 1000 impressions on their ad.
- CPC– The amount that an advertiser pays for each click on your ad is known as the cost-per-click (CPC). Depending on the level of competition for the target market and keywords, the relevancy and quality of the ad, and other factors, the actual CPC for a particular ad might vary significantly.
- CPL– Cost per lead is used by advertisers, where they pay only after acquiring a new lead or potential customer. It is an excellent indicator of what is performing and what is not, assisting you in choosing where to concentrate your future efforts.
- CPS– It is a cost metric that describes the total cost related to the number of sales of a product or service. Businesses should regularly assess their cost per sale to find new ways to cut expenses while enhancing performance and boosting revenue.
- CPA– CPA is an abbreviation for “cost per acquisition” or “cost per action,” where advertisers pay a predefined amount for each desired action that leads to conversion, such as sales, click, download or sign-up.
- LTV– LTV in digital marketing stands for lifetime value, which estimates the total amount of money a customer will generate over the course of their lifetime. LTV assists in determining marketing budgets and guarantees that businesses target the most productive customers.
How to get Performance Marketing started for your business?
Undoubtedly, organic ranking is excellent, but getting on the first page of SERPs can often take months or even years.
If you are running a startup or small business, you probably do not have the time to wait for the effects of organic, social, or direct traffic to materialize. You know how important it is to have a high rank in the SERPs for your business. But afraid that you might end up wasting your money on ads that don’t help you achieve your business objective. Worry no more!
How to start? It’s easy. Establish a precise marketing objective, choose your target market, and start your campaign. Always keep an eye on your data, test new ad features frequently, and be aware of potential problems like click fraud.
Below, we have mentioned some of the tried and tested strategies developed by our experts that can help boost your presence on digital platforms. Utilize this approach as a roadmap to help your performance campaign succeed.
- Establish campaign goals: Establish clear goals before you begin tracking any metrics. Establish a timeframe, make a plan, and be aware of your aim. Otherwise, you run the danger of paying for outcomes that don’t genuinely meet your goals. Depending on the situation, different campaigns may have different goals, such as raising awareness, increasing sales, or gaining more clicks.
- Select a digital channel and a campaign type: You must know where and how you want to advertise. Make sure to diversify the channel rather than sticking to one platform. The type of paid advertising campaign you choose depends on who is your targeted audience and what is your target demographic.
- Choose high-ranking keywords: Keywords are used in performance marketing to target particular audiences and optimize campaigns for better outcomes. Businesses may improve the likelihood by incorporating pertinent keywords into the ad copy, landing pages, and other marketing materials. By carefully selecting relevant and high-ranking keywords, and continuously monitoring the performance of these keywords, you can improve the effectiveness of your business campaigns and drive better results.
- Create and launch the campaign: The effort that goes into performance marketing campaigns mostly consists of defining the target market, identifying the audience, ascertaining their wants and desires, and developing ads and messages that will appeal to them. The technical elements of the campaigns, such as permitted picture sizes, copy character restrictions, and ad sizes, are influenced by the employed platform or channel.
- Measure and optimize the campaign: The real work of performance marketing kicks in once the ad is launched and running. Monitor your metrics consistently to identify your campaign’s strengths and weaknesses. Track the result using various google analytic tools which help you optimize and improve the campaign to drive growth.
- Beware of ad fraud: The term “ad fraud” in performance marketing refers to dishonest practices intended to falsely inflate marketing campaign performance metrics, including clicks, impressions, and conversions. This can be accomplished through a variety of techniques such as bots, click farms, and bogus websites. Ad fraud has negative effects on the brand’s reputation and results in lost advertising dollars and a decreased ROI. Use solid tracking and measuring tools, keep an eye out for red flags of fraud, and collaborate with reputable and trusted marketing networks to reduce ad fraud.
Best Performance Marketing Channels:
There is no one-size-fits-all channel for performance marketing; every business is different, as are its needs and objectives. As a result, selecting the channel that will assist in achieving the goal without incurring any losses can be difficult. Below, we have mentioned some common but most effective channels to start your performance marketing campaign:
- Search Engine: They are also known as Pay-per-click (PPC) ads. When a user types any keyword on search engines such as Google or Bing, some sponsored ad content are displayed at the top or bottom of the SERPs. Many performance marketers also use SEO-optimized content marketing for organic SEM.
Social Media: Social media platforms are the best channel to create brand awareness, drive website traffic or promote products. Users can also naturally share sponsored content with their networks, thus expanding the reach of the post itself. The most used and effective channel for performance marketers is Facebook, but other websites like LinkedIn, Instagram, and Twitter also provide lots of chances to expand your clientele.
Display ads: You can post advertisements (often image-based) on other websites, including social media sites, using display ads. They are basically sold on a cost-per-impression or cost-per-click basis.
Native ads: Native advertising uses a website’s or page’s organic design to highlight sponsored content without disrupting the user’s browsing experience. Native ads are hard to differentiate from other ads on the display screen, which enables you to market your business in a way that seems natural. They can appear in various formats such as sponsored content, in feeds, on mobile apps or on other platforms.
Affiliate/ partner marketing: It is one of the most cost-effective channels to boost engagement and your return on investment (ROI), as here you are not paying for views or clicks but for tangible results such as app downloads, sales, etc. These partner programs typically have a strong online presence across a number of performance marketing channels. They have targeted and engaged audiences known for similar established brands.
Whether your business is new to the market or has been around for decades, you can grow your advertising efforts to match your company’s needs without going bankrupt by employing performance marketing channels.
Performance marketing is an innovative and efficient approach to broadening your audience and your reach while also gathering essential data. However, performance marketing is all about launching the campaign and optimizing it for the better. Every account is individual and will respond to various features and techniques in a unique way. So make sure to test multiple strategies and embrace your performance marketing to get a high return on investment (ROI).
Have you tried performance marketing yet? If not, then give it a shot, and if yes, then try it again to get a better result than the previous one. Remember what Lord Baelish said in season 3, episode 5: “It doesn’t matter what we want. Once we get it, then we want something else.”
Apto Digital is one of the leading digital marketing agencies in Bangalore, India. With the best-skilled digital marketing experts, we bestow an incredible lifestyle of working for our clients by aligning their revolutionary ideas and helping them successfully achieve their objectives.
Our Experts have over 5 years of experience in digital marketing services. We at Apto have meta expertise in Search Engine Marketing, Search Engine Optimization, UI UX Design, Social Media Marketing, Pay Per Click Services, Email Marketing Services, Website Design and Website Development. With our fortune of expertise and digital lifestyle, we provide very cost-friendly digital marketing solutions with higher ROI for enterprises, SMEs, and startup’s.