Having to pay for ads when the measure for success like conversion, action, or transaction has been met sounds fun.
And that is what Performance Marketing for Growth is all about.
Sounds sketchy? It’s all legit.
What Is Performance Marketing?
In traditional advertising, you pay a fee upfront for ad space independent of performance, meaning hundreds and even thousands of funds spent without ever seeing a conversion (or performance). With performance marketing, you only pay when the metric for success (conversion, action, or transaction) has been met.
And by focusing on metrics like conversion rates, cost per acquisition (CPA), and return on ad spend (ROAS), performance marketing allows for precise tracking and optimization of campaigns.
The data-driven nature of performance marketing for growth enables advertisers to refine their strategies continually and in real-time, ensuring that they achieve the best possible results with their advertising spend.
Such a type of marketing promotes a business and can be mistaken for Brand Marketing, as both aim to promote a business and attract customers, but they are quite different in their approaches and goals.
How is growth from Brand Marketing different from Performance Marketing for growth?
Brand marketing and performance marketing cater to different objectives, each employing a distinct strategy. Brand marketing aims to create a long-term, emotional bond with consumers/customers.
This approach often showcases iconic elements such as a memorable logo like Nike’s Swoosh logo, a celebrity endorsement like Amitabh Bachchan’s Cadbury Dairy Milk chocolate ads, or an inspiring slogan like “Open Happiness” from Coca-Cola or “Because You’re Worth It” from L’Oréal.
Success in brand marketing is rooted by metrics such as the number of impressions or unique viewers, which aren’t directly linked to a specific return on investment.
Plus, the surety of tapping to target customers/consumers is low here as the fee payment advertisers make for the ad space is prepaid, independent of performance.
This could broadly mean thousands of dollars spent without ever seeing a conversion or lead generated.
On the contrary, performance marketing focuses on achieving immediate, measurable goals such as generating leads and driving sales. Advertisers only pay when the measure for success (conversion, action, or transaction) has been met, such as site visits, conversions, sign ups, and/or payment made.
For instance, consider a social media ad campaign by Nike, designed to transform your admiration for the brand into an actual purchase, like a new pair of running shoes.
Metric to Measure in Performance Marketing for Growth
If a campaign brings out the return on investment (ROI), it performs. Thus, the name, Performance Marketing.
It goes without saying that ROI is crucial for any business. Be it negative or positive ROI.
Negative too? Yes.
Positive ROI would help you strike a new path of work for the future operations and help you optimize the areas that got the success. Whereas, negative ROI helps you re-evaluate what worked and what did not, and plan ahead accordingly.
But how would you find out the said RETURN ON INVESTMENT?
There are numerous Key Performance Indicators or KPIs that judge how the marketing and its strategies are working, or if they are working.
1. CPC, Cost Per Click
Cost per click, also known as pay-per-click metric, works by paying the advertiser/marketer whenever the target audience clicks on the links presented by the advertiser/marketer via static ads or video ads leading them to a website or a landing page.
This metric lets you know when the ads are getting clicked, how many times or even where the ads were clicked.
2. CTR, Click-Through Rate
Click-Through Rate measures the amount of success ads have when the target audience sees your ad and subsequently clicks on it, making it a click-through the ad and landing on a website.
This helps to know if the specific ads are engaging enough or not for the target audience to click on them.
3. CPM, Cost Per Mille
Cost per Mille, or Cost per 1,000 views, is a metric that pays the advertiser for everytime the ad gets 1,000 impressions.
It is not concerned with the actions the audience might take after seeing the ads, it gives out the payment the second ads get thousand impressions on the ads.
4. CPV, Cost Per View
The payout is given for every view the ads get. There is a defined benchmark for the audience to view the ad for a specific length to get called a proper “view”.
5. CPL, Cost Per Lead
Here, the marketer pays for every lead generated, hence the name, Cost Per Lead. This hints on the journey of the lead from getting triggered from the ad to engaging with it and clicking on it.
This works best for the businesses that sell high value products or services.
6. CPA, Cost Per Acquisition
A payout is made every time a business prospect is acquired. Basically, whenever a business locks a client, they pay a specified amount of money.
This metric also helps in knowing how qualified leads you get judging the ads you run, and their performance.
Types of Performance Marketing
1. Content Marketing
Is a delivery type marketing where what you sell is judged.
Be it display ads or social media marketing, content marketing is the way you can create content that is valuable, relevant & clearly speaks to the business, aka B2B, or to the customers, aka B2C.
Content marketing consists of social media marketing, email, marketing, SEO, inbound marketing, PR, etc.
2. Affiliate Marketing
Is a revenue type marketing where you earn commissions for helping brands generate leads for them. Or for every purchase a customer makes of the product/services of the brand.
Various metrics are used to measure the success of this type of marketing, CPC is used to know the cost per click for the ad that is being run and/or CPM is used to evaluate the efficiency of the ads.
3. Native Advertising
Is a paid media where the ad you make and run binds and merges with the messaging, tonality and aesthetics of the platform it will be run on, seamlessly.
An example for this is when you run a static ad on Flipkart about mobile phones.
Process
You cannot go blindly making ads and running them without a plan, or structure of review for when the ad campaigns are over.
You need a process for the same. The following are the steps you should follow to outshine in performance marketing for growth.
1. Fixate on a campaign goal
What do you want your ads to spread out? Brand awareness, use benefits, PSA or increase sales?
Knowing what to sell becomes more important and relevant when you know what the goals of your ad campaigns are.
Having structured and SMART goals aligned with the proper CTAs to back them up creates a funnel for the target audience to take action for/on your ads.
2. Creation & positioning
Creating ads that speak to the triggered audience is the basis of running ad campaigns. If you create ads that speak to only the general audience and not your target audience, you are headed opposite to success.
That is where positioning comes in. Positioning means showing the ads you run to specific people through specific channels, be it SMM, SEM or even OTT channels.
It is vital to sit and decide the right messaging and the right channels to show that messaging as ads to your target audience or loss is inevitable.
3. Match the metrics
Proper and clear KPIs should be laid down to measure where you went wrong and where you got more than the desired results.
Metrics are basically the reality check for your ad campaign. And they act as historical data for your future campaigns.
Basically, we can’t stress enough for this point.
4. Opting the right channels
Do you believe in “less is more”? Well, that doesn’t go well for performance marketing.
Choosing various channels to float the ads you run helps you reach more members of your target audience. The right approach for the right audience to see your ad would be to use omnichannel marketing.
5. Launching the Ads
After you have covered the above mentioned points, be it statics, videos or even infographics, the ad campaign should cater to the points that hit your target audience, and should compel the audience to take action.
And once you have launched the campaign, the step to optimize the ads start.
6. Optimizing
After you have launched the campaign, optimizing it is done to keep making it breathe.
Place 2 versions of the same ad and test which version did the best. This is A/B testing. This would land you to a decision of going with the current target audience or shift it to a new one.
Optimizing also discloses if the target audience likes your ad or not, or would they take any action after seeing it or not. And this opens the door for evaluating plans for campaigns, ad sets, ad visuals, etc..
Final Thoughts
Performance Marketing for growth is a smart choice for businesses looking to make the most of their advertising budget.
Unlike traditional brand marketing, which focuses on building long-term recognition and emotional connections, performance marketing is all about getting immediate, measurable results like leads, sales, or website visits.
