Performance Marketing
What is Performance Marketing: How it works, types and benefits
As a marketer (or business), you want to engage your target audience and gain attention for your brand, service or product. You can do this by creating an ad that is displayed to users on social media or in Google search results when they search for specific products. You pay for performance marketing based on how well the campaign performs.
Examples of how you can be charged are pay-per-click advertising or advertising that leads to sales. Performance marketing essentially reverses the usual marketing concept. When print ads were more popular, you may have had to pay to get your ad printed in a magazine. Regardless of how well the ad performed, you would have already invested the money and the work. However, when using performance marketing, a fee is only charged if a specific action is taken after the ad is launched. It is purely performance-based, as the name usually implies.
What is performance marketing actually?
In performance marketing, brands only pay marketing service providers when their business goals are achieved or certain activities such as clicks, sales or leads are carried out. It is performance-based marketing, as the name suggests. So what makes performance marketing different? Because customers only pay when the desired result is achieved, it gives the marketer more control. They can be sure that only effective efforts are funded with their marketing budget. More importantly, because highly targeted campaigns all make data-based decisions and adjust their campaigns depending on the results, performance marketing campaigns tend to have a higher success rate. This benefits both companies and affiliates.
Types of performance marketing
Basically, there are four types of performance marketing supported by modern companies:
- Social media advertising The placement of ads on social media platforms such as Facebook, Instagram, Twitter, LinkedIn and others is referred to as social media advertising. These efforts are typically built using a funnel structure, with at least one campaign to reach new people (prospecting) and at least one to reach website visitors who have not converted (retargeting). Social media advertising can also be used for branding or market validation. However, if it is not used to increase conversions, it is not always performance marketing.
- Search Engine Marketing (SEM) Search engine marketing refers to the implementation of marketing measures to increase traffic from search engines such as Google or Bing. These campaigns are usually built based on the types of search queries they want to rank for. For example, a company might run campaigns for the types of products they sell, for competitor brands and for their own brand. This is almost always performance marketing. It is also very different from SEO.
- Influencer marketing Historically, influencer marketing has not always been considered "performance" marketing. However, this has changed recently. Influencers have become more business savvy, and the development of influencer partnership platforms and influencer management tools like Gatsby has enabled brands to track and improve their relationships with influencers in a truly performance-driven way.
- Native Advertising/Sponsored Content Similar to influencer marketing, however, here you pay a medium to write about your business instead of hiring an influencer to promote it. As a marketer, you have a lot of creative influence over what they post on your behalf. Although different publications may call it sponsored content or native advertising, the idea remains the same. Note, however, that most countries have laws that require publishers to disclose that their content is sponsored.
How to implement performance marketing
Performance marketing offers opportunities for advertisers and agencies and is a promising strategy. However, as with any other tool, you need to know how best to use it to market your brand to the market. Here are the following points to help you run the most effective campaign:
- Only work with professional people. Don't just look for the agency with the lowest prices, but also consider the company's industry standards, professionalism and reliability. The health of your brand is something you invest in.
- Make agreements that benefit both parties. In this type of marketing, it is in the client's interest to give generous incentives without sacrificing profits, as agencies work according to targets.
- Create SMART goals to increase your chances of success. Every excellent marketing goal should be SMARTT, which stands for specific, measurable, achievable, realistic and time-bound.
- Make sure that the client and the agency have the same goals so that they can work together effectively. To increase the likelihood of achieving the predefined goals, the channels of communication between the two parties should always be open.
- Use performance marketing only when it is necessary. Although it can be very useful, it cannot be used in all cases. It is better to use it for efforts that are directly related to user behaviour (such as subscriptions) than for campaigns that have more to do with branding and awareness.
- Improve the landing pages you use. Landing pages are essential to the success of any conversion-oriented campaign. Avoid generating flashy ads that direct users to unoptimised landing pages.
- Select the appropriate platforms and actions. Make the most of this type of marketing, as its adaptability is one of its main advantages. Before launching a campaign or reaching a target, always consider the best channels to use.
- The most important thing is tracking. Keep an eye on your progress in real time and don't hesitate to adjust your strategy as often as necessary. Your best ally in achieving your goals is measurement.
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