So, what exactly is performance marketing? Performance marketing is a subset or part of what you’re working toward with your overall digital marketing strategies and campaigns. In performance marketing, various online advertising third parties are paid when an action is taken, for example, downloading an ebook.
While this type of marketing is often associated with pay-per-click, PPC does not encompass the full scope of performance marketing. The goal of this type of digital marketing approach is to drive qualified prospects to your product or service. That’s why you hone your campaigns to ensure that you reach your target demographics and geographical areas.
Why performance marketing matters
Performance marketing matters a great deal to businesses because you should be guaranteed a return on investment based on your budget. Of course, you’ll make the most of your performance marketing efforts as you track your metrics, determine your current results, and continue to optimize your campaigns to better reach your ideal audience.
While performance marketing can be a very useful strategy for some brands and businesses, marketers must do their due diligence and monitor advertising spend to ensure it is used on real people. Much of performance marketing remains vulnerable to bad actors including bots.
Benefits of Performance Marketing in B2B
You can track and optimize the performance of your campaigns, which means you can quickly gauge the success or failure of your campaigns across display ads, email, and social media. Here are five benefits of performance marketing:
Payments for Results
You’re paying for results, so that’s the most obvious benefit of performance marketing. So, conversion metrics are especially important for your campaigns. As you set your targets and work to meet those targets with your performance marketing, you’ll get the most out of your campaigns.
Faster Gauge of Success
As you deploy performance marketing strategies and campaigns, one of the benefits is that you’ll get faster results and insights. Since you’re paying for performance, you can quickly gauge the response by the number of conversions, clicks, or impressions. So, you can reallocate your budget if certain areas of your campaign do not meet your expectations.
Lots of Options for Platforms and Formats
Your audience may naturally gravitate toward specific promotional formats and platforms. So, one of the benefits of performance marketing is that you can easily target the distribution networks or platforms that will best reach your customers.
How Does Performance Marketing Work?
In essence, performance marketing is a straightforward concept. In paid advertising, an advertiser only pays when an action is taken as a result, based on a click, impression, or conversion. Of course, performance marketing also encompasses a range of more organic and placement-oriented distribution models. Still, the consistent goal is to determine ways to measure the number of leads and conversions you achieve across your distribution channels and campaigns.
Examples of Performance Marketing
Here are the four basic types of performance marketing, with examples of what each one will do for your B2B business.
- Affiliate Marketing: You’ll see influencers, bloggers, and other online personalities as examples of affiliate marketing.
- Display Ads: Examples of display ads could take on a variety of formats on websites, via mobile devices, or even on social media channels.
- Native Advertising: You’ll see examples of native advertising integrated into the various platforms. It could be a Spotify playlist, sponsored hashtags on Twitter, or in-feed ads on your Instagram.
- Paid Search Marketing: You might think of Google Ads as the first example, but the paid search could also appear on Yahoo or Bing.
- Sponsored Content: Examples of sponsored content could be videos, articles, or other branded media designed to drive an action or conversion.
Measuring Performance Marketing
With performance marketing, you can measure your results. Understanding your marketing analytics can help to optimize your campaigns with those insights and ensure you reach your target goals. The first step is determining how to measure your performance marketing efforts.
- You track your return on investment (ROI) to determine whether your campaign has succeeded.
- You’ll also calculate the cost per lead by taking your budget spend and dividing it by your number of leads to determine if the cost was low.
- You track your conversion rate to see how many of your leads take action to make a purchase or interact with your online presence.
- You determine the customer’s lifetime value (CLV) by looking at how many purchases they’ve made over the years they’ve been customers.
Your tracking methods will depend on the format and platform or network you’re using for your campaign. Based on your determination of the success of your performance marketing campaign, you’ll make adjustments to target your audience better and achieve better results.
Frequently Asked Questions About Performance Marketing
Here are frequently asked questions about performance marketing.
What is the role of performance marketing?
Performance marketing allows you to reach your prospects and customers with targeted messaging across online platforms. As you measure your results, you’re better able to optimize your campaigns and messaging.
What is the difference between performance marketing and digital marketing?
Performance marketing is just a small part of what you should plan out as part of your digital marketing strategies and campaigns. Performance marketing is often considered a short-term strategy, while digital marketing incorporates various online activities.
Is SEO part of performance marketing?
Search engine optimization, or SEO, is not typically considered part of performance marketing because you don’t pay for your results. Including SEO as part of your digital marketing strategies is still important.
Is performance marketing the same as affiliate marketing?
Affiliate marketing is just one way you can implement your performance marketing strategies.
What are the common types of performance marketing?
The most common types of performance marketing include affiliate marketing, native advertising, sponsored content, social media marketing, and paid search marketing.
How Performance Marketing is Changing the B2B Landscape
You need to provide solutions that address your customers’ needs. Performance marketing allows you to target your audience across platforms better. As you optimize your campaigns and strategies, you can connect and engage with your audience. So, you can continue delivering what they need as the B2B landscape evolves and changes.
Learn More About Performance Marketing
Performance marketing is a great way to increase the reach of your brand. With its trackable performance, you can work toward achieving the results you need for your business. You can quickly gauge your performance and optimize your campaigns to reach your target audience better. Find out more about how you can succeed with your performance marketing campaigns.
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