Performance marketing – what is it and when to use it?

If, in addition to this, you implement analytical tools on your site, you get additional capabilities. For example, you can check the average time a user spends on the site, their purchase path, the sub-pages they visited, the form field they filled out, etc. If you haven’t implemented analytics tools on your site so far, be sure to do so! From our article, you will learn more about the most popular tool, which is Google Analytics 4

What are the purposes of performance marketing?

The goals that performance marketing campaigns achieve are called KPIs (Key Performance Indicators). With them, you can measure how well you achieve your goals before launching your campaign. KPIs Denote key performance indicators. They allow you to measure your progress in achieving the goals you are aiming for. We can clearly assess the campaign’s effectiveness and its individual elements with KPIs.

KPIs can be divided into several groups:

• strategic: these are key performance indicators that monitor an organization’s goals. We usually look at one or two strategic KPIs to get an idea of how the organization is doing at any given time. These could be, for example, return on investment, revenue or market share. In performance marketing, these would be, for example, leads acquired, ROI or ROAS.
• operational: these KPIs typically measure performance over a shorter period of time and focus on organizational processes and efficiency. Some examples include sales by region, average monthly transportation costs and cost per acquisition (CPA). In performance marketing, these would include CTR, CPC or ad impressions.

From our article, you will learn what KPIs are and how to set them

What are the channels in performance marketing?

Performance marketing allows you to reach your audience through various channels. Here are the main channels we can use to promote our company: 

• Native advertising – is advertising that matches the content on the website. Its main advantage is that it does not look like an advertisement. This promotional message looks natural; however, there is no call to action. Marketers use native ads with different content formats. The main thing is that the advertising message perfectly matches the content. By choosing this type of advertising, you can pay for clicks or displays.
• SEM (search engine marketing) – is the totality of promotional activities on the Internet, which are aimed at obtaining the best possible positions of the site in search results for selected words / key phrases typed by users in a search engine query.
• Social media marketing – Facebook, Instagram, TikTik, Twitter, and LinkedIn are the most widely used social channels among people of all ages. These social networks allow brands to connect with their audiences, increase traffic and awareness, boost sales, etc. You can choose from different pricing methods: cost per click, cost per view, cost per display, cost per acquisition, etc.
• Affiliate marketing – includes affiliate marketing and influencers. Advertisers usually pay for sales, acquired leads, downloads, app installations, etc. Providing a special link to an affiliate allows advertisers to identify the source of ROI and thus determine the most profitable strategies.

Performance marketing – what it is and when to use it

Performance marketing is such a versatile way of reaching users that I recommend using this form of promotion in virtually any condition, regardless of your advertising budget. This is due to the various forms of promotion you can use with it. Depending on your company’s needs and challenges, you can bet on a specific solution.

If you want to increase your online visibility, it’s best to bet on reach or image campaigns. For example, with a YouTube video, you can show potential viewers a new product that has just appeared in your store. If you want to make it easier for recipients to find your company, you should take care of search engine advertising. It will make your site appear at the top of the search results, thus shortening your customers’ buying journey. The targeting possibilities are so advanced that you will determine with high precision who your ad should reach and how.

Performance marketing will work great for seasonal promotions. With Google Ads or Facebook Ads, you can reach potential audiences with your advertising messages the moment the campaign is activated. Unlike other types of promotions, you don’t have to wait long for an effect, as the ads will start displaying instantly. Ads are perfect for occasions such as Christmas, Black Friday or Women’s Day. You can run ad campaigns focused on specific, limited-time offers and track their results. When a particular promotion ends, you disable the campaign with a single click, so you won’t risk losing your budget.

Performance marketing vs. mobile advertising

This type of marketing is also a good way to reach mobile users. Currently, already approx. 90% of web traffic is via mobile devices. Due to their growing popularity, mobile advertising is the foundation of digital marketing. Analytical tools allow us to track the results of ads on mobile devices and additional aspects, such as the number of app installs or conversions in the mobile app.

This type of marketing will also work great when you want to remind customers who have already interacted with your ad or visited your website about your products or services. You can also display user-specific products that they have viewed on your site. This type of remarketing is called dynamic remarketing.

This may all seem complicated. Therefore, if you want to run performance marketing campaigns independently, read the article on How to learn performance marketing. Alternatively, you can use the support of performance marketing agencies

Billing-models-of-performance-marketing-campaigns

You can bill performance marketing campaigns using several basic models. They determine how you pay the contractor for the implementation of the campaign.

CPC (Cost per Click) – you pay for each click on an ad. The model considers only those clicks that actually occurred, regardless of the number of conversions.

CPM (Cost per Mille) – you pay for the number of times an ad is displayed, usually there are 1,000 impressions.

CPL (Cost per Lead) – you pay for your acquired leads. These can be, for example, forms submitted or contact information left on the site.

CPA (Cost per Acquisition/ CPA Cost per Action) – payment for completed conversions. The advertiser pays the contractor only for completed actions, such as making a purchase, registering or downloading an application.

Tools-essential-to-run-performance-campaigns, such as GDN or Performance MAX

The most popular tools you can use to run performance campaigns are:

Google Analytics 4 – a tool for collecting and analyzing data from various websites and mobile apps in one panel.

Google Ads Editor – Google Ads Editor is an application for managing Google Ads campaigns, available for free download. Using it is simple: you download at least one account, edit offline campaigns and upload changes to Google Ads. This will save you time and make it easier to make changes collectively.

Google Looker Studio – Looker Studio, formerly Google Data Studio, is an online tool for converting data into customizable news reports and dashboards. It allows you to create reports and quickly analyze data.

SemRush is a tool for researching keyword and online ranking data, including metrics such as the number of searches or cost per click.

When running performance marketing campaigns, measuring their effectiveness is a fundamental activity. Read more about how to measure the effectiveness of your campaigns

Performance analysis in performance marketing

Whether you’re running operations yourself or using the services of a digital agency, it’s a good idea to analyze how well campaigns are performing. Not everything can be seen at first glance, but the data is not hidden. You just need to know what to pay attention to.

Analyzing the data and implementing improvements will put your campaigns through what is known as an optimization process. The process consists of analyzing data, conducting tests and experiments, personalization, targeting, improving landing pages, and analyzing results.

The process consists of analyzing data, conducting tests and experiments, personalization, targeting, improving landing pages, and analyzing results.

Analyzing the data obtained while running campaigns and then taking optimization measures will help you achieve better results and maximize ROI or return on investment. Remember that campaign optimization is an ongoing process that seeks to improve and maximise ads’ effectiveness continuously. One-time optimization activities will help improve campaign performance, but only regular optimization will enable you to obtain satisfactory results efficiently.

From our article, you will learn when to conduct the first performance analysis