Performance marketing is a dynamic approach to online marketing in which advertisers pay only when specific actions are completed, such as a sale, a lead or a click. This approach provides a transparent and risk-free method for businesses to achieve their marketing goals, as costs are directly tied to measurable results.
In short, with performance marketing, you only pay for results, not impressions.
Performance marketing is essential for any business focused on profitability. In today's business environment, having visibility into the direct results of your marketing spend is crucial. Performance marketing provides that clarity. With a strategically designed performance marketing campaign, you can accurately calculate what each dollar invested will get you. This makes it an indispensable strategy for companies looking to effectively manage and optimize their bottom line. Turn to performance marketing and see the concrete impact of every marketing dollar on your bottom line.
In performance marketing, you as the advertiser get the power back in your hands. You determine the action and pay only when the action is completed, whether that's a lead, sale or subscription.
The biggest advantage of performance marketing is that it is 100 percent measurable. Thanks to the latest technologies and advanced ad platforms, all your campaign data is tracked.
In addition to better tracking of your results, performance marketing is also focused on return on investment (ROI), which implies less risk.
The classic CPM and CPC (Cost Per Mille & Cost Per Click) models have an unclear relationship with sales figures. They give you a price per display or per click, but you never know exactly how many people bought your product or service.
Measuring your performance marketing campaigns allows you to continually optimize your efforts. If you know that certain actions deliver better results, you boost those actions by increasing the budget. At the same time, you allocate a lower budget to less converting campaigns, pause them, or turn them off completely.
The technology allows you to measure your results in real time and continuously monitor, refine or stop your campaigns.
Because you know exactly how much your campaign cost and how much you're getting out of it, you can spend your ad budget much more efficiently and targeted.
Performance marketing goals can vary, from generating leads to making sales. Some examples are: selling 1,000 products with an average value of €50, or achieving 5,000 downloads of a form where 20% of the downloads lead to a sale. In this way, you can assess the return on investment (ROI) in a fair and targeted way.
Performance marketing strategies show their enormous potential because of the variety of online channels you can use for this purpose: social media ads, Google Ads, email marketing, content marketing and/or Display Ads...
You no longer have to invest in campaigns without knowing the results. With performance marketing, the risk is minimal and you can estimate how much a campaign will cost you.
Measuring your ROI is key to a successful performance marketing approach. There are several ways to track the performance of your campaigns, both paid and free marketing tools.
Don't make decisions too quickly based on the ROI of your campaign. Give your campaigns enough time to collect data. It is impossible to optimize a campaign based on insufficient data.
| Metric | Stands for | Meaning |
|---|---|---|
|
CPL |
Cost Per Lead
|
Cost to generate a lead. A lead is a person who has shown interest in your product or service by achieving a predetermined goal.
|
|
CPA |
Cost per Acquisition
|
Total cost to acquire one paying customer at the campaign or channel level. |
|
LCR |
Lead Conversion Rate |
The percentage of leads that converted to sales.
|
|
ROAS |
Return On Ad Spend |
The return on an investment in advertising.
|
|
ROI |
Return on Investment
|
The ratio of revenues to costs. ROI is expressed as a percentage and measures financial value added relative to costs.
|
To begin optimizing your marketing efforts and maximizing your results, we suggest the following recommendations.
Define your goals
Whether generating leads or selling products, it is hugely important to set goals before launching a campaign.
Not only from an analytical standpoint, but also for the advertising platforms, it is important and necessary to define your goals in advance.
Test all options
Before making any decisions, it's best to carefully measure each of your channels and identify the highest conversion rate to allocate your budget precisely.
Analyze your customer journey
Do most people come to your site through a Facebook post, an Instagram story, a Google Ad, or anything else? How did they get to your website?
When you know exactly which channel attracts the most sales, you can optimize it to improve your results.
Examine all contact moments
We research the market, the competition and the trends, and discover the best strategy to approach your ideal client. We find out where and when to do it best, and what assets you need to score.
Go omnichannel
To know what is happening with your brand, you are required to integrate all channels. For example, receiving a nice email may trigger a user to post it on social media. That, in turn, can influence others about your brand. Also, don't forget how often people switch between smartphone, laptop and tablet these days.
Retargeting
Retargeting is one of the key elements for optimizing your performance marketing. Customized banners and personalized email campaigns can greatly help you maximize impact and measure results down to the smallest detail, so make the most of it.
Successful performance marketers know what to focus on and where to invest time and resources.
From declining Facebook reach, to increasing costs of Google ads, and declining organic reach on Instagram, one thing is certain in the ever-changing online marketing landscape: algorithms will never stay the same. Therefore, it is very risky for your business to rely heavily on sales through a single platform that you do not own (e.g., Instagram). By putting too many eggs in one basket, you become vulnerable to arbitrary changes by advertising platforms.
With all the new, innovative platforms available today, it's easy to get distracted and lose sight of your marketing goals. Just because these platforms are new and exciting doesn't mean we should keep using them without seeing results. While it is wise to continuously experiment with the latest and greatest features to stay ahead of the competition, overdoing it can lead to diminishing returns.
Instead, it's best to set aside a respectable portion of your budget for new opportunities, while still investing a larger amount in proven platforms, tactics and techniques. It's true that content is king, but only if it can be measured and used to generate results, either short-term or long-term.
The success of your performance marketing efforts is closely tied to your ability to apply that data to predictions for future advertising campaigns. Right now, performance marketers have vast amounts of data at their disposal, but we see that not everyone knows how to make the most of it. Data is crucial for marketers because it has enormous potential to use previously untapped insights for business development.
Thanks to dashboards, performance marketers have a clear view of what is happening in campaigns and can quickly see what optimizations are best implemented.
