Performance Marketing: Benefits and Evolution

Performance marketing campaigns are gaining momentum changing the world of digital environment. Previously, the market worked according to the classical scheme. These were agencies specializing in individual instruments or their set, such as SEO, PPC, e-mail marketing, with blurred KPIs. Clients, not delving into processes and results, regularly paid for abstract indicators. With the advent of performance marketing, a transformation began in favor of measurable performance metrics.

What Is Performance Marketing

Performance marketing is a set of online strategies based on indicators that allow a company to promote a product or service and pay only when advertising encourages action. It can be a new application, a call from an interested buyer; contacts that are left on the subscription form; load lead magnet; payment for goods or services.

The main benefit to performance marketing is that it is effective due to work with measured values. For example, the cost of an ad depends on the frequency of its views on the page, the number of clicks, new leads, and sales. So to evaluate the effectiveness or performance of a marketing strategy, firms typically use an assessment of those indicators that can be measured and most importantly assessed in terms of cost-effectiveness. Due to this, the company directs all actions to achieve specific business indicators. However, this approach does not abandon the use of SEO, media advertising, email marketing, SMM and other online tools. But all of them cease to be used separately from each other, and they are synchronized to achieve the maximum result.

Performance marketing includes advertising campaigns that meet the following criteria:

  • The intention of the campaign is to force consumers to perform a targeted action, in contrast to raising awareness.
  • The causal relationship between advertising and the fulfillment of a targeted action by the consumer can be accurately measured.
  • The advertiser can optimize advertising based on measurement data (control of CPA through other indicators, for example, CPC).
  • The advertiser places advertising with payment for the targeted action (CPA, CPI, etc.), but this is not necessary if the previous three criteria are met.

Benefits of Performance Marketing

  • The ability to measure the effectiveness of each instrument. This approach allows the company to measure the effectiveness of advertising in practice, rather than on paper. A businessman sees the specific profit that one or another online channel brings to him.
  • The motivation of the customer to complete the purchase. Clicking on a banner is an abstract indicator. And the number of people who clicked on advertising and bought goods is already a reality. It is not enough to achieve brand recognition; business needs that consumers perform targeted actions - fill out applications, add products to the basket, etc.
  • Influence on the current situation. Performance-marketing allows the company to react quickly to the indicators of the advertising campaign, practically in real time.
  • Investing in the result. An important rule of using this type of marketing is to carefully predict the result, bypassing serious risks.

Performance-marketing has very important advantages for the business, such as simple monitoring of efficiency, low risk of unnecessary advertising costs and other ways of maintaining demand, and orientation to ROI. But in order for this approach to work, companies need fast and convenient platforms, as well as an effective strategy.

Definitions of Goals in Performance Marketing

Before starting any marketing campaign, it is necessary to set goals. It does not matter what the company wants to achieve: increase sales or improve brand awareness. Many platforms provide an opportunity to form goals before placing ads and setting up a campaign. Popular goals include:

  • Increase site traffic;
  • Attracting customers;
  • Lead generation:
  • Increase in sales.

Having determined the goals of advertising campaigns, it is possible to safely proceed to the selection of marketing platforms and tools that can help in achieving them.

The Evolution of Performance Marketing

The history of Performance Marketing begins in the late 90s when Search Engine Optimization and Search Engine Advertising appeared. To date, Performance has gone beyond the familiar understanding of these two areas and covers virtually all channels of the digital sphere. So, the main channels that can and should be used to implement a full-fledged Performance Strategy are SEM, Social Network (Paid Social / Social PPC), SEO, Mobile, Programmatic Buying, Video, Affiliate Marketing (CPA).

In recent years, the Performance Marketing market has grown not only in the distribution channels but also in the technological sense. New tools and opportunities for targeting, remarketing, behavioral targeting, data (starting from the interests of users, ending with data on places of stay, the amount of fiscal spending, profitability, and behavioral preferences) have appeared. But the main tool is still the analytics of the traffic received. Opportunities for analytics do not stand still and are not limited to functions of Google Analytics. Now the mechanisms of seamless integration with the CRM client, when the efficiency with any detail (keywords, targeting, auditor segments, etc.) on the instruments can be viewed in terms of real sales, deals or LTV are actively developing.

In the near future, it will no longer matter which channels, tools, technologies are used to purchase traffic. Real people with their individual needs, behavior, mood, interests become a priority. Performance Marketing will focus, first of all, on finding a specific target audience with the help of a set of all available tools and capabilities.