Performance marketing is good because it allows you to operate only with specific data, real numbers and objective statistics.
When did the performance approach emerge?
What is performance marketing? The concept appeared about 10 years ago and originally meant the model of payment for the services of agency promotion, which received a profit for each client, brought to the business of the advertiser, or a percentage of sales. To attract leads, the agency used virtually the entire available range of promotional tools.
With time the concept began to be blurred, and specialists who positioned themselves as masters of performance, but worked with a particular channel – for example, with social networks.
Today, performance marketing is more of a promotion strategy that allows you to get measurable financial results in the shortest possible period of time.
It uses only the means to get real results and useful data, without abstractions. The approach is primarily focused on increasing sales and optimizing the cost of the client engaged. An experienced performance marketer must ensure that the client gets the most out of the advertising campaigns.
Differences from digital marketing
Today digital-marketing is called all possible means of promotion which use digital ways of information distribution. It’s not just Internet channels, but also telemarketing, SMS-mailing and much more.
If we narrow down the tools used in marketing to online only, we get internet marketing. Performance marketing involves the use of even more limited tools, aimed at obtaining measurable results of the actions of specialists. It makes it possible to calculate in figures how effective the promotional channels used are, and also to form a conclusion about the justifiability of investments in advertising.
To put it simply, performance marketing is not only promoting with the help of available channels but also providing a customer with comprehensive data on the advertising efficiency which can be used as a basis for decision making on strategy corrections. This allows for a more effective promotion in particular and business development in general in the future.
Tasks and indicators of performance marketing
In order to effectively spend money on advertising, you need to consider all the main components of modern performance marketing.
Setting goals
The first stage of marketers’ work, in which experts define objectives for the business and choose KPIs. In most cases, the main goal of such promotion is to increase the number of clients/orders from the advertiser. Therefore, it is important for specialists to choose the most accurate indicators for the business.
Analytics
After setting objectives, specialists analyze their client’s business and its target audience. To do this, they need comprehensive data on the real state of affairs in the company, as well as access to online resources with all the means of analytics.
Strategy development
Next, experts determine the entire list of promotional tools that will help to get a quality result: priority traffic channels, types of RC, timing, etc.
The strategy is developed on the basis of the conclusions drawn as a result of analytics.
Development of media plan
The next step is to create a detailed plan of promotion using the selected tools. For each channel, the optimal scenario of use is determined. Marketers form a list of tasks and draw up TOR for designers, copywriters, programmers and other specialists who are invited to work on the project.
Effectiveness assessment and strategy optimization
On the basis of the work done, advertising campaigns and other work designed to provide the client with an increase in the number of orders are launched. After that specialists assess the effectiveness of the work performed and, if necessary, make adjustments to the strategy.
Advantages and disadvantages
The main advantage of performance marketing is that the business owner is not just paying for some advertising, which may bring profit. Here the payment is for the result – the company receives information on the real value of each client attracted and the effectiveness of the performance marketing instruments involved, and therefore can optimize performance.
The disadvantages of performance marketing are the high cost of such work and the long implementation time. It is not possible to get results in a couple of weeks.
Performance marketing metrics
Performance marketing performance is measured using real metrics. The most popular are:
- The number of new visitors to online resources;
- conversion rate;
- bounce rate;
- cost per click or action;
- The cost of a lead and a completed order;
- average check value;
- customer lifetime value;
- Return on investment in advertising.