Performance Marketing

Discover what Performance Marketing is!

What is Performance Marketing?

Performance marketing is a discipline in which an advertiser only pays for the results he or she attains.

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

Performance Marketing

These goals are usually related to getting an a response to something on the audience’s part. These responses include, among other things, a subscription, a like, a share, a signup, or a sale.

Performance marketing means paying for results; (not for clicks/impressions). The factor which determines whether or not a campaign has gone well is the real data. This data is collected by a tracking system that saves clicks, subscriptions, sales or conversions in real time.

Characteristics of Performance Marketing

Many advertisers still have doubts regarding what performance marketing actually is. More than likely, this is due to the fact that it’s a relatively new term that encompasses all marketing methodologies.

Some people confuse performance marketing with affiliate marketing. Though they share some similar concepts, the latter is actually a tool and a technique available to marketers so that they can develop their work in performance marketing.

These campaigns are launched in a digital environment (increasingly more so on mobile platforms as well) in order to attain measurable results. These campaigns, however, are different than branding or brand awareness campaigns. In order to track user actions, one can use cookies, universal pixels or conversion pixels. 

Advantages of Performance Marketing

    • Ease of ROI measurement. The classic CPM and CPC models offer a cost linked to results; however, their actual relation to sales is much more vague. In the case of CPM, we can only know the number of times a given ad has been shown. The downside, however, is that we can’t ensure that a real person saw it. In the case of CPC, we can know who’s been on our site after a click, but, this KPI doesn’t tell us what happens next: did the person leave the page without reading or did they continue to pass through the advertising funnel? Nevertheless, by tracking these actions with cookies or pixels, you can know what each user actually does on your website or landing page.
    • Conversion-based goals. These goals can be anything from leads to sales and allow us to know what benefits have come from the strategy as a whole. A couple of examples are: 1,000 sales conversions with an average value of $50, or 5,000 downloads from a form with a sales possibility of 20%. In this way we will be able to honestly assess our ROI.
    • Greater optimization. Improving measurement helps us to be able to constantly optimize campaigns. If we know certain actions are providing better results, we can give these actions a boost by adjusting the budget accordingly. At the same time, we can cast aside any actions which are not contributing to making conversions. Additionally, since technology allows us to measure results in real time, we can establish continuous controls that either refine campaigns or stops them. In regards to brand advertising, results are an ongoing improvement process.
    • Opportunity costs are eliminated. This means that advertisers should no longer invest in campaigns without knowing what the results will be. With performance marketing, risk is minimal and allows you to estimate how much a campaign will cost for each campaign.  
    • Efficient management of the digital advertising budget.
  • Wide array of channels. Performance marketing strategies show their potential through a wide variety of online channels: Social Ads, email marketing, content marketing and/or display marketing.

Reasons for investing 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 advertisement segments 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.
  • In the conversion of leads from visits and with pay per action (PPA), new income opportunities are attained with mobile strategies, 
  • Thanks to technological advances in artificial intelligence, performance marketing will likely see a hike in efficiency. AI will also help us to better understand how to both increase ROI and to optimize campaigns in real time.

Top Performance Marketing Recommendations

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:

  • Implementing performance marketing strategies helps to distinguish yourself from the competition. This is even more true in an era in which this discipline is still emerging and still in the process of dispersion throughout Spain.
  • Advertising agencies are implementing performance marketing into their strategies because they offer a better ROI.
  • No longer is performance marketing just 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. Included in these elements are the mobile web, in-app ads, email and social media.

Cyberclick’s take on Performance Marketing

We have experience and various success stories where we have implemented performance marketing strategies focused on traffic acquisition. In having a global vision of the digital environment, we are able to assess which strategy our clients should develop regardless of the sector or the product.  

We approach our work from a completely analytic standpoint. Therefore, all suggestions we have are based on a client’s primary KPIs. The aim is for advertisers to reach their goals through the right channels and through the maturity of the product or service. 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. up until we find the best combinations that provide the desired results for the goals previously set.