Any business is interested in the fact that advertising activities bring profit. Someone has just introduced a new product or service to the market and is gathering a customer base, and someone wants to tell customers about a new offer or discount. In any case, the results and timing of the advertising campaign are very important. Here comes the time of performance marketing.

In this article we will deal with this concept and find out what it is and why it is needed.

What is performance marketing?

Performance marketing is a marketing strategy focused on achieving specific measurable results and financial indicators.

The main task of such marketing is to determine the most profitable channels for attracting customers and to understand which tools are effective for business in real time.

At the same time, a proven mathematical approach is used: only clear goals, real numbers, comparisons and analytics. Therefore, the closest synonym of performance marketing is effective marketing. Business indicators (KPIs) should be measurable. For example, increasing the number of customers by 15% in 3 months.

Peculiarities of performance marketing

Measurability. The effectiveness of each channel is tied to specific business indicators. And they are always related to sales or the size of the check. For example, CTR – clickability, reach of subscribers, volume of organic traffic on the site, CPA – price per action (click, transition), CAC – customer acquisition cost, LTV – customer lifetime value.

Measurability of all indicators through real sales is a strong point of this type of marketing. You can easily determine how many paying customers a particular promotion channel has brought you. And in the future, use only those channels that will help you get the maximum profit.

Topicality. This means that any advertising campaign and strategy are adjusted situationally here and now. At the same time, they evaluate both the effectiveness of advertising and the events of a certain country, the economic situation, the behavior of competitors, etc.

Most often, the task of a marketer is reduced to continuous control of the return of advertising. If more money is spent on placement than it brings in, it is quickly curtailed or optimized and its effectiveness is increased by testing various hypotheses.

Clear goals. The goal is always measurable, achievable and time-bound. And it is from it that any advertising strategy begins. For example, increase the conversion rate of sales from Facebook by 10% in July 2022.

Technologies. In order to assess the extent to which online publications affect offline sales, most companies use modern end-to-end analytics systems. This helps to understand which promotion channels have worked.

For example, the user saw an advertisement for a smartphone on the Internet, read reviews, compared offers. And then he went and bought it in a store. End-to-end analytics systems take into account all these points of customer contact with the product and help understand what exactly influenced the purchase decision to a greater extent.

Pay per result. Performance marketing agencies that provide comprehensive services to clients usually set specific KPIs and charge for the achieved result.

Stages of performance marketing strategy development

Strategy development is based on the following plan:

  1. Deep analytics. At this stage, marketers analyze in detail the business, product features, and the effectiveness of current marketing tools. They study the competitive environment and evaluate external factors.
  2. Determination of goals and objectives. They are always tied to a specific business and current situation. The most common are increasing the number of leads, reducing their cost, and increasing the conversion to registration or purchase.
  3. Drawing up a media plan. Based on the goals and the analysis, a specific plan for launching advertising campaigns and implemented tools is drawn up. The document clearly states the budget and estimated KPIs.
  4. Launch and optimization. After launch, specialists evaluate the effectiveness of campaigns and the achievement of goals. Inefficient tools are excluded, their budget is redistributed in favor of successful channels. And this happens on a regular basis.

Promotion channels

Performance marketing uses the most common promotion channels. The only difference is that such campaigns are constantly adjusted and analyzed in terms of KPI.

  • Contextual advertising. Ads that are shown to the user based on his interests and requests. They most often lead to a landing page developed for the product – a one-page site that collects applications. The key tool is performance.
  • Targeted advertising in social networks. Quite a popular and common tool in performance campaigns. Advertising in social networks is launched on a potential target audience, the number of conversions and other targeted actions are tracked.
  • Native advertising. These are organic ads that fit into the site’s content. They are perceived as part of the site being viewed and do not cause rejection in the audience. The format of native banners and text-graphic blocks is very popular. The Phoenix Native platform is already helping many advertisers achieve top media metrics such as CTR and conversions. Experienced specialists contribute to the optimization and improvement of the results of the advertising campaign, thereby increasing the level of user loyalty to your product or service.
  • Email marketing. Sending emails to potential and current customers. It is used to promote online stores, stimulate purchases, and increase brand loyalty.
  • Viral advertising. Creation of content that arouses strong interest of the audience. Users share them in social networks, discuss, comment. Thus, they create hype around the product or company.

So, performance marketing helps to look at business as a source of profit: to evaluate the effectiveness of marketing in monetary terms and earn more. Its tools are suitable for any business segment. The most important thing is to correctly define the goals and objectives, to think over the campaign strategy, as well as the criteria for evaluating the result.