If you’ve ever heard of performance marketing, you may be wondering what exactly this strategy is all about. How to effectively implement it in your company? What to pay special attention to? Read our article and find out what is performance marketing and how to implement it in your company.
Performance marketing – what is it?
Performance marketing is a term that refers to an internet marketing strategy, the aim of which is to achieve high effectiveness of the actions taken. By acting in accordance with the performance marketing strategy, you pay for the achievement of specific results, not for the work done. Performance can be measured in any way, as your goal you can specify product sales, link clicks, e-book download, post likes, lead completion, etc. Performance marketing is a great solution because it guarantees that all the money invested in the advertisement will bring a real effect . In the case of performance marketing, you pay only after you achieve specific effects, but already during the marketing campaign, your website is exposed to a larger number of recipients.
The main methods of implementing performance marketing include, for example:
– Paid advertising in social media,
– Ads on the search network,
– Automated display advertising,
– Affiliate Marketing.
Who should decide on performance marketing?
You already know what performance marketing is, but you may still wonder if it is the optimal solution for you and your company. Performance marketing is a good idea for any company that wants to achieve clearly defined results. However, people who have a smaller budget and need to be very careful about the profitability of their marketing activities should pay attention to this strategy. Larger companies can spend large amounts of money on branding campaigns that will greatly increase brand awareness among people. However, most companies have to take the ROI indicator on the wallpaper, and in this case, performance marketing comes in handy.
How to measure the effectiveness of a performance campaign? Key indicators
The most important element of performance marketing is the return on investment (ROI), which is why each of the actions taken is carefully measured and analyzed in terms of KPIs. Thanks to this, the campaign can be even more effective. Of course, the choice of indicators to analyze the effects depends on what you have defined as your business goal. We will discuss the most popular indicators in performance marketing.
CPM in performance marketing
CPM is short for Cost Per Mille, which means the cost that a trader has to pay in return for a thousand views of a given ad to users. Remember that in this case, the goal is to display itself, not to take a specific action by the recipient.
CPC in performance marketing
CPC stands for Cost Per Click, which can be translated as Cost Per Click. It is a more reliable and effective indicator for a performance marketing strategy, as it informs about the user’s taking a specific action. The higher the CPC cost, the greater the likelihood that clicking on the link will result in conversion by the recipient. Therefore, even if the cost of a click is higher, the potential return on investment is also higher.
CPA in performance marketing
CPA is an acronym for Cost Per Action, thanks to which you pay for the implementation of a specific action taken by your target group. As the desired action, you can define clicking on a link, downloading an e-book, subscription, purchasing a product, etc. In performance marketing it is one of the most important indicators, because it gives the best chance of achieving the assumed goal and measuring the company’s results in detail.
LTV in performance marketing
LTV stands for Loan to Value and determines the expected value of the customer in relation to his relationship with the brand or company. Based on this indicator, the company can estimate the expected revenues from the assumed target group. This way, marketers can plan their strategy more effectively to maximize ROI.
How to create a performance marketing campaign? Step by step
A performance campaign can take various forms depending on the goals set. Nevertheless, you can define the main steps that will allow you to build an effective strategy based on any target group and set goal.
Step 1. Set a goal for your marketing campaign
Before you implement a performance campaign into your business strategy, think about what is most important for the development of your company. Is it more important to increase brand awareness, increase sales results, or maybe increase traffic on social media? When setting goals, it is worth brainstorming your team, discussing different perspectives and relying primarily on specific data from the company’s current results.
The most popular goals of a performance campaign include:
– Increasing website traffic,
– Remarketing or Retargeting,
– Increasing user involvement,
– Increasing the number of leads generated,
– Increasing the level of sales.
Step 2. Select the channels you want to operate on
In performance marketing, it is important not only to properly select the channels in which you will operate, but also to diversify them. Therefore, when deciding where in the network you want to operate, do not focus on one channel – it will help in expanding your reach, increasing brand exposure, and thus increasing the chance of success. When choosing channels in performance marketing, look for those that will support your type of conversion and will be in line with your target group, you should not prioritize what channels are currently the most popular.
Step 3. Create and run a performance campaign
Creating a campaign is a process that requires high accuracy. It’s not about mechanically launching a campaign, but basing it on the detailed identification of the target group’s needs and understanding its problems, and then adjusting your ad to the results obtained. The better you define how and who you want to reach, the more effective the project will be. In this step, you also need to take care of the technical aspect of your advertisement, for example, the required dimensions of graphics, acceptable images, the limit of characters used in the text, etc.
Step 4. Measure and optimize your results
Remember that launching a performance campaign does not mean the end of your work. Now you need to look even more carefully at your ad and your results. The performance campaign will generate data right after its launch, and your task is to interpret it properly and draw conclusions. Consider which of the selected channels are the most effective? Are the results of your activities satisfactory? Where could the problem lie and what can you change? Did you allocate funds for advertising effectively? When analyzing the results, also remember that performance marketing can help you not only in increasing your sales, but also in identifying the best channels, audiences and campaign goals.
How to conduct performance marketing to be successful?
Performance marketing is a great way to increase the efficiency of promotional activities in your company, but just opting for such a campaign is not a guarantee of success. How to implement online performance marketing to bring the desired effect? Keep in mind the following four aspects.
Focus on a compelling landing page and offer. Even a very large investment in an efficiency campaign will not guarantee your success if you do not have an attractive offer prepared for your clients. Let’s assume that you prepare an ad perfectly tailored to your target group and the recipients will be happy to click on the link. What they encounter after clicking on your ad has a huge impact on your conversion rate. Make sure that your website is designed in accordance with UX and optimized for SEO, and that your offer is attractive compared to the competition.
Conduct A / B tests for revenue-generating KPIs.
Introducing changes in the strategy of your actions should not be based on guesswork, but on detailed analyzes. For example, A / B tests can help you with this, thanks to which you will verify what better appeals to your audience and your campaign will be more effective. Remember that when performing A / B tests, you should only examine one variable to be able to effectively determine what influenced the increase or decrease in customer interest.
Take care of reliable sources of traffic.
How can I get my audience to trust your website? Make sure it is talked about. Try to obtain external links from well-known, respected websites and portals, thanks to which you will increase the level of credibility of your brand. A high level of trust in the company translates directly into a higher level of effectiveness of the performance campaign. Monitor on an ongoing basis where links to your website come from and try to influence it to be mentioned on reliable websites.
Focus on monitoring and analyzing the results.
Track and analyze your results as often as possible – all the data can help you understand your audience and run a performance campaign more effectively. You will know what type of advertising to focus on, what content to prepare to be effective. Without analyzing your actions, you cannot expect your results to increase.
Why is it worth investing in performance marketing?
You already know what performance marketing is, but you are still not convinced if it is a solution for you? Performance marketing has many strengths and you should definitely consider implementing it into your marketing strategy. Let’s take a look at the most frequently mentioned advantages of this solution.
Optimizing KPIs through performance marketing
The Conversion Rate, also known as KPI, is a very important metric in the company’s growth process. Performance marketing focuses on it, so that your company can achieve your sales goals faster and more effectively. If your marketing activities are focused on financial optimization (sales, maintenance, increasing revenues) and not on image activities, performance marketing will be an ideal solution.
Performance marketing is focused on performance
Better and better results in the actions taken online are always pleasing to the eye, but sometimes the increase in indicators does not have a real impact on the company’s development. It is necessary to focus on the most efficient indicators. For example, when your clicks and impressions become more expensive, you may want to focus on generating high-quality traffic to your page. Online performance marketing allows you to focus on the results that will really push your business forward.
Marketing performance is a flexible strategy
The undisputed advantage of performance marketing is that it can be freely adapted to your own brand. You choose the method of operation here individually to the assumed business goals, as well as to a specific group of recipients. Thanks to the fact that you do not have a pre-imposed operating framework, you can freely maneuver the campaign and decide for yourself, after appropriate analysis, which solutions are the most beneficial for your company.
Everything you need to know about performance marketing. Summary
Performance marketing is an effective way to quickly achieve the results you want. You can freely adapt the campaign to your needs and business goals, which makes this form of marketing so attractive. However, remember that performance marketing, just like any other marketing strategy, requires regular research, analysis and optimization.