In the world of digital marketing, buzzwords seem to be a dime a dozen. Terms like “growth hacking,” “storyscaping,” and “geofencing,” sound very interesting, but does your marketing strategy really need them? When it comes to marketing success, there’s really only one buzzword you need to understand, and that’s performance marketing.
Now you may already think you know what performance marketing is: you run marketing and advertising campaigns and they get results. Performance marketing, right? Well, that’s not the whole picture, and the great thing about performance marketing campaigns and performance marketing agencies is that you, the business, are in the driver’s seat.
We know your business has KPIs laid out for your marketing strategy. Instead of running an ad campaign and hoping to achieve these results, performance marketing strategies let you set the goal and adjust your advertising budget to accommodate these goals. Let’s dig into what the performance marketing concept is and how it can work for your business.
What Is Performance Marketing Exactly?
We’re glad you asked. Performance marketing is a catch-all term that incorporates many different digital marketing and advertising channels towards one goal. It’s the “performance” part that makes all the difference, though. In performance marketing campaigns, you only pay when an action is taken from an ad.
For example, you can choose to pay per leads generated, clicks to a landing page, a sale through your eCommerce store, or any other action you’ve designated for the ad. Performance marketing campaigns depend on paid marketing channels such as:
- Social Media Advertising
- Search Engine Marketing (SEM)
- Affiliate Marketing
- Sponsored Advertising
- Native Advertising
How Do Performance Marketing Platforms Work?
The various performance marketing platforms available to media buyers have specific audiences and tools to target them. On Facebook, for example, there are a variety of ways to get your ads in front of the audience you choose. While Google Ads allow media buyers to bid on that appear above the organic search listings.
Not all of the performance marketing channels will display your ads or content to their audience base. Here are a few factors that come into play when displaying your ads:
- Quality: If your ad does not appeal to the audience it is targeting, it will receive a low-quality score. Trust in advertising is a hot-button issue that platforms like Google and Facebook are working towards rectifying. If the ad does not meet a platform’s quality standards, it will reduce the exposure.
- Bidding Price: Some audiences and keywords have higher competition than others. Platforms like Google Ads and Bing Ads allow media buyers to bid on certain keywords.
- Target Audiences: Depending on the platform, the more granular you can target based on audience demographics, location, interests, and more. Facebook, LinkedIn, and other social media platforms offer lots of valuable user data for advertisers to really hone in on the audiences they want to reach and those they don’t want to waste cost on targeting.
- Conversions: This is the bread and butter of performance marketing. A conversion is whatever action you want your audience to take. That can be link clicks, lead form fills, page likes, eCommerce purchases, impressions, or more.
Defining Your Performance Marketing Strategy
Based on your performance marketing goals, your strategy can take a few different forms. Here are some of the most common performance marketing strategies available:
- Cost Per Leads (CPL): This is the amount an advertiser spends when a user completes a lead form or submits part of their contact information including name, email address, or phone number for a sales followup.
- Cost Per Sales (CPS): This is the amount that is paid when a user makes a direct purchase from an ad.
- Cost Per Click (CPC): This the cost incurred when a user clicks on an ad or a link in an ad.
- Cost Per Impression (CPM): The advertiser pays when an advertisement is viewed a thousand times (hence the Roman numeral M in the abbreviation).
Benefits of Choosing the Right Performance Marketing Channel
Each performance marketing platform has its pros and its cons when it comes to your advertising and marketing objectives. Let’s breakdown each one and get the skinny.
- Native advertising: These platforms are specific to the publishers that own them. Some websites, magazines, and blogs operate on media networks that allow advertisers to create campaigns based on audience interests and demographics. With native advertising, you pay to place ads within the website or content schedule and direct traffic to your website or landing pages. These types of ads usually rely on content marketing strategies and appear more organic than ads on other platforms.
- Affiliate marketing: This allows you to tap into your industry’s thought-leaders and influencers. You pay your affiliate when users use their specialized link to your website or enter their code during checkout. Affiliate audiences are usually highly engaged and this channel usually yields a high ROI.
- Search engine marketing (SEM): This channel can help amplify your ad exposure by displaying them on the search engine results pages (SERPs) above the organic results. So, if you are targeting certain SEO keywords, you can simply bid on them through the search engine advertising platform to capitalize on highly competitive keywords.
- Social media advertising: The demographic targeting of social media advertising is second to none. Social media users usually have to verify their accounts with personal information such as age, location, career field, and more. Certain platforms like Facebook and Instagram allow advertisers to install pixels and tags on your website to retarget users even when they are away from the platforms. Although these performance marketing campaigns tend to yield decent results, the cost of running ads may be a barrier to entry for some campaigns.
- Sponsored content: This is another form of native advertising. Advertisers can use the publisher’s website and content for ad placement, but often the ads will be denoted as sponsored placements.
Getting the Results That You Paid For
At Cape & Bay, we are experts at all things performance marketing and advertising. Our crack team of ad-op specialists and SEM experts are well-versed in getting the results your business needs from your advertising campaigns. Collaborate with us and let & take the wheel.