Performance Marketing

Discover What Performance Marketing Is!

September 2021

What Is Performance Marketing?

Performance marketing refers to marketing activities where advertisers only pay for the results they get.

 

Marketing departments within businesses are increasingly trusting in performance optimization agencies because they know that their investment will accomplish their goals, a factor which often remains up in the air in more traditional marketing agencies.

What Is Performance Marketing

These goals are usually related to getting an a response from the target audience. The responses can include, a subscription, a like, a share, a signup, or a sale, among other things.

 

Performance marketing means paying for results, not just for clicks or impressions. The factor that determines whether or not a campaign has succeeded is real data. This data is collected by a tracking system that saves subscriptions, sales, or conversions in real time. In order to track user actions, you can use cookies, universal pixels, or conversion pixels.

 

Performance marketing campaigns are launched digitally (increasingly more so on mobile platforms) in order to attain measurable results. However, these campaigns are different than branding or brand awareness campaigns. 

 

Some people confuse performance marketing with affiliate marketing. Though they share some similar concepts, the latter can actually be a technique within performance marketing.

 

Performance Marketing Definition

Performance marketing is defined as a digital marketing campaign where the advertiser only pays only if or when a specific result is achieved. This way, the advertiser knows that their money is being spent well.

 

Benefits of Performance Marketing

    • Ease of ROI measurement. The classic CPM and CPC models offer a price based on a result but this result's relation to sales is much more vague. In the case of CPM, you only know the number of times a given ad has been shown. The downside is that you can’t ensure that a real person saw it. In the case of CPC, you know who’s visited your site after a click but this KPI doesn’t tell you what happens next. Did the person leave the page without reading anything or did they continue to pass through the advertising funnel? By tracking these actions with cookies or pixels, you will know what each visitor actually does on your website or landing page.
    • Conversion-based goals. These goals can be anything from leads to sales and they allow you to know what benefits have come from the strategy as a whole. An example could be 1,000 sales conversions with an average value of $50, or 5,000 downloads from a form with a sales possibility of 20%. This allows you to honestly assess your ROI.
    • Greater optimization. Improving measurement helps you constantly optimize your campaigns. If you know certain actions are providing better results, you can give these actions a boost by adjusting your budget accordingly. At the same time, you can eliminate any actions that are not contributing to conversions. Since technology lets you measure results in real time, you can establish continuous controls that either improve and refine your campaigns or stop them. Improving results is an ongoing process in brand advertising.
    • Opportunity costs are eliminated. This means that advertisers no longer need to invest in campaigns without knowing what the results will be. With performance marketing, risk is minimal and you can estimate the costs for each campaign.  
    • Efficient management of your digital advertising budget.
  • A wide array of channels. Performance marketing strategies show their potential through a wide variety of online channels such as social ads, email marketing, content marketing and/or display marketing.

Reasons to Invest in Performance Marketing

Are you still unsure? If so, here are 5 reasons to invest in performance marketing right now. The following information comes from a study carried out by Cake Marketing.

  • Marketing and digital advertising are the fastest growing segments.
  • Every $1.00 invested yields $11.00 in return.  
  • It’s recommended that 93% of businesses either hire a performance marketing agency or implement performance optimization strategies intermittently within their own marketing departments.
  • When converting visitors to leads with pay per action (PPA), new income opportunities can be attained with mobile strategies.
  • Thanks to technological advances in artificial intelligence, performance marketing will likely see increased efficiency. AI will help us better understand how to both increase ROI and to optimize campaigns in real time.

Top Performance Marketing Tips

Recently, Captio carried out a study called The New Normal: Performance Advertising Drives Effectiveness with 152 marketers from the United States, the United Kingdom, Germany, and France. The top recommendations from the study are the following:

  • Implementing performance marketing strategies helps distinguish your brand from the competition. This is even more true in an era when this discipline is still emerging.
  • Advertising agencies are implementing performance marketing into their strategies because it offers a better ROI.
  • Performance marketing is no longer a fad; it’s a norm. 47% of respondents carry out retargeting actions (49% in ecommerce) and 54% focus on campaigns that deliver personalized ads to their consumers.
  • 46% of performance marketing cases are comprised of multi-device and multi-channel elements. This includes mobile web, in-app ads, email, and social media.

Cyberclick’s Take on Performance Marketing Agencies

We have experience in successfully implementing performance marketing strategies focused on traffic acquisition. By having a global vision of the digital environment, we are able to assess which strategy our clients should apply, regardless of the sector they are in or the product they make.  

 

We approach our work from a completely analytical standpoint. All suggestions we make are based on a client’s primary KPIs. The aim is for advertisers to reach their goals through the right channels. Moreover, we aim to do this at the lowest possible cost and with the best ROI.

 

Before and during the launch of an acquisition campaign, we carry out A/B testing in order to continually optimize messages, CTAs, segmentations, images, etc. until we find the best combinations that provide the desired results and achieve the previously set goals.