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Importance of Performance Marketing

October 14, 2019

To be on the cutting edge of marketing innovation, you need to invest in performance marketing. It allows for real-time ROI measurement and pushes marketing companies to constantly innovate and grow with their partnered organizations.

Successful performance marketing will create loyal companies, grow your business, and provide you with the best possible tools to achieve your goal.

How Performance Marketing Revolutionizes Advertising

Performance marketing campaigns revolutionize the relationship between clients and their hired performance marketers. It allows you to only pay when a specific action is completed or the goal is reached in your performance marketing. Social media allows these meetings to be held online, streamlining the entire process.

The Process of Effective Marketing

The first step of the performance marketing process is to hire an online marketing manager. A good manager will outline well-structured content before diving deeper into the desired audience. They will also use excellent performance marketing tools in the process of sending out your content to social media. These tools include market research surveys and focus groups. Once the marketing strategy has been researched, planned, and implemented, it is critical to return to the content and optimize it.

Making the Most of Your Marketing Strategy

Optimization of your marketing strategy can only occur after the data surrounding it is measured. Measure the digital marketing strategy using social media and website analytics, along with other data, to determine the overall ROI. Then, optimize that strategy. There are four major ways to determine the optimization of a marketing strategy.

Cost Per Order (CPO)

There are four major ways to determine the optimization of a marketing strategy. The first is the cost per order (CPO) performance marketing. This is the cost of a marketing strategy divided by the number of orders received for it. It allows the company to determine how much money was spent to gain one customer.

Cost Per Mille (CPM)

The next method is the cost per mile (CPM) performance marketing. CPM is also known as cost per thousand. It specifically measures 1,000 marketing campaigns on websites. For example, if a website charges IDR 30,000 CPM, that means it must pay IDR 30,000 for every 1,000 views of its advertisement.

Cost Per Lead (CPL)

The third method is the cost per lead (CPL) performance marketing. CPL is one type of performance marketing pricing model. It creates a balance of responsibility between the advertiser and the publisher. In CPL, the advertiser only pays when a consumer directly signs up for their advertised product.

Cost Per Action (CPA)

The final method of performance marketing optimization is the cost per action (CPA) performance marketing. In this strategy, an advertiser only pays when a potential customer performs a certain action. This means this strategy is low-risk for the advertiser.

Measuring the market performance of a digital strategy is key. Without it, companies will not know how effective their marketing strategy was, or how to improve it for future campaigns. The first step of any marketing strategy is to set clear goals. Without a defined framework in mind, your company will never be able to accurately measure the successes and failures of your marketing strategy, and the individual campaigns you use to achieve your end goal.

Another method of measurement is a digital marketing report. A well-written report can be used to prove, with the right data, that your marketing strategy has grown your targeted business outcome–such as an increase of sales for a certain product or an improved rate of returning customers. Be sure to answer these four critical questions when writing a digital marketing report: how much money are you spending, how many people are you reaching, how effective is your marketing, and how much money are you making back from the marketing expenses. Regular reporting will help keep your marketing goals on track.

Once you have the framework, you need to use a performance marketing funnel. This funnel will take your marketing strategies and grow them. Initially, when the funnel is at its widest, you will simply want to make customers aware of you. Then, you will work to make them first-time customers, then recurring customers, and finally loyal patrons who will vouch for your company. Once you reach the tip of the funnel, you will have connected with your customers and hold a personal relationship with them. A good way to remember how the marketing funnel works is with the acronym AIDA: Awareness, Interest, Desire, Action, and Advocacy.

Regardless of which optimization method you choose, it is crucial to reflect on your content and learn how to make it better!