Performance marketing: does it really work?

Fierce competition, digitalization, online market saturation are the main reasons stimulating the emergence of new marketing instruments. Today, it is not enough to be better, faster, stronger than competitors. They should be outperformed according to quite measurable metrics, recouping every dollar invested. But here is no place for pretty promises from specialists who talk more than do. Clients do not need guarantees or wasted budgets, they need results. It is the reason why focusing on numbers, KPI, and other metrics strengthen and become more than a temporary trend in marketing — they help to achieve goals set and measure them using specific parameters. Thinking through moves ahead, calculating all games with the possibility to correct and get the desired result is the reality with performance marketing.

What is performance marketing?

Performance marketing is called to achieve specific and measurable business results. They can be absolutely different:

  • registration;
  • transition to the site;
  • product order and sale;
  • traffic boost;
  • call;
  • the decline in CPI (the price of one app installation);
  • improving ROI (investment return);
  • decrease in the cost per lead (CPL);
  • traffic boost in a specific region.

Advantages of performance marketing

Since it works not with abstract data, but with specific metrics, the results of all actions are measured, fixed, and compared. Thanks to a great number of services, this marketing instrument can be used by both major companies and small businesses. It is not the easiest however a great way to find more effective advertising models, uniting them into a single strategy. And no ad budget wasted.

Using specific metrics, you can monitor main KPIs to understand the effectiveness of channels.

If needed, you can correct or change the strategy to make the product promotion more efficient and increase sales. By analyzing ad campaigns in real-time (no joke), you can realize how to redistribute your budget or abandon inefficient channels.

What does a client get in addition to measurability, effectiveness, and actuality? He pays for the result obtained instead of paying for long speeches and the volume of work.

Performance marketing is focused on ad investment payback. Here comes the conclusion: it is impossible to calculate every cent spent to get a working outdoor advertising, but end-to-end analytics in performance marketing will help you get specific numbers for each area where tasks were set.

How does performance marketing work?

Begin with revealing strong and weak sides of a company. Since goals are the primary focus here, they should be set using the SMART method that enables the formulation of realistic and measurable tasks. Each letter in this word stands for a specific criterion:

  • Specific;
  • Measurable;
  • Achievable;
  • Relevant;
  • Time-bound.

For instance, increase sales on a website by 20% by November 30, 2022.

Goal setting is only the first stage. You should choose optimal sources of traffic for your business:

  • search;
  • direct;
  • social networks;
  • YouTube;
  • targeted, context, or display advertising;
  • emailing;
  • messengers.

These resources are suitable for the first touch with a client, “heating”, or sales. If you choose several channels for communication, distribute the budget, prepare a media plan, choose ad instruments, prepare content formats and visual materials, and set metrics you plan to monitor.

If you realize that a source is not effective enough, reject it. An ideal scenario is a synergy of various channels, a holistic funnel. Collect statistics and analyze results. End-to-end analytics helps to estimate the effectiveness of every channel and the campaign in general based on data that monitors the entire client path.

Performance marketing is not only an essential instrument but also a new milestone in marketing. Its influence will only strengthen, since the business world is fond of numbers, accuracy, and income. If you can control the payback of the money invested, regularly monitor key metrics, the marketing becomes more predictable, and CRO works more effective.

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