Performance Marketing refers to a form of digital marketing in which brands pay marketing service providers only after achieving their business goals or when specific actions have been taken such as clicks, sales, or leads. In other words, it’s performance-based marketing.
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What is Performance Marketing?
Performance Marketing is a digital marketing strategy that focuses on measuring and optimizing the results of marketing efforts. In Performance Marketing, marketers will be paid when a specific action is performed, such as clicking a link, filling out a form, or making a purchase, etc.
The main goal of Performance Marketing is to increase advertising and marketing effectiveness by focusing on creating actions that are effective and contribute to business goals. In Performance Marketing, businesses often set specific goals, such as the number of website visitors, the number of mobile app downloads, the number of purchases, or the number of registrations. After that, all marketing campaigns are then designed to generate these actions and measured to determine effectiveness.
Performance Marketing is considered a branch of Digital Marketing. It is also often called performance-based marketing. Performance Marketing experts are often agencies, media companies, and publishers, and they depend largely on marketing channels.
How does Performance Marketing work?
Performance marketing has the participation of 4 target groups. Each group has its own essential role to play in leading to the final result.
Retailers and Merchants
In the field of Performance Marketing, retailers and e-commerce companies are often considered advertisers. Their goal is to reach and promote their products and services through cooperation with affiliate partners or publishers.
Retail and e-commerce businesses operating in many different fields such as fashion, apparel, food, beverage, health, beauty, and sports can achieve great success when applying Performance Marketing. Because in today’s world, consumers tend to trust recommendations from trusted sources such as influencers or publishers.
Affiliates and Publishers
Groups of Affiliates or Publishers in the field of Performance Marketing are considered “marketing partners”. Their function is to receive promotion of products and brands from businesses and receive commissions from success in introducing those products and brands.
There are many different forms of Affiliates and Publishers operating, including product review websites, blogs, online magazines, coupon websites,…
Influencers are also considered a form of Publisher, carrying out product promotion activities through their blogs, groups, and social networks. These people often provide followers with personal experiences, tutorials, and trustworthy reviews to recommend products/services. Their ads often include special offers and gifts for followers to create appeal and encourage followers to actively interact with the product.
Affiliate Network and Third-Party tracking platform
Affiliate networks and third-party tracking platforms act as an important “exchange”, connecting businesses with affiliate partners and performing tasks such as:
- Provide tools such as banners, text links,… to help promote your business’s products and brands.
- Track and manage information about potential customers, clicks, and conversion rates to measure the effectiveness of marketing activities.
- Acting as an intermediary in the process of paying commissions to affiliate partners, similar to a bank handling transactions related to paying commissions to partners.
- Resolve problems that may occur between the two parties, ensuring transparency and fairness in the working process.
Affiliate Managers and OPMs (Outsourced Program Management Companies)
There are a number of organizations and advertisers that specialize in providing support for affiliate-related issues. Their team of experts can suggest effective forms of product promotion, promotional tools, and keywords, and resolve technical issues.
In addition, companies can also hire agencies to manage the entire program or support the company’s team, thanks to their expertise and existing network of affiliated partners.
The role of Performance Marketing in the Digital era
Performance Marketing is a creative and effective way to diversify your audience and expand your business’s reach while gathering valuable data. Some of the main roles of Performance Marketing in today’s Digital era include:
Measure effectiveness
Performance Marketing allows for clear and accurate measurement of the effectiveness of marketing campaigns. Indicators such as conversion rate, cost per action (CPA), and profit per action (ROAS) help marketers evaluate effectiveness and adjust strategies promptly.
Maximize ROI
Performance Marketing helps businesses maximize the ROI of Marketing campaigns. By focusing on specific goals, businesses can measure the effectiveness of campaigns and adjust accordingly to achieve desired ROI goals.
Increase interactions and personalization with customers
With Performance Marketing, businesses focus on achieving specific goals, such as increasing sales, increasing website traffic, and increasing interactions on social networks. Thanks to measuring results, marketing activities can be adjusted and optimized to better meet customer needs, achieving greater efficiency.
By using precise targeting methods and controlling the results, businesses can increase customer engagement and improve their marketing performance. Performance Marketing has the ability to customize, focusing on specific potential customers. Marketing techniques like remarketing, custom creatives, and customer segmentation help increase engagement and create personalized customer experiences.
Cost optimization
Performance Marketing allows you to optimize Marketing costs by focusing on channels and campaigns that bring the highest efficiency. With the ability to effectively track and measure performance, marketers can adjust budgets and distribute marketing resources more effectively.
Popular indicators to measure the effectiveness of Performance Marketing
CPC – Cost Per Click
Cost Per Click is the price paid each time a viewer clicks on an ad. CPC is a better engagement metric than CPM because the viewer has already taken the action of clicking on the ad. A higher CPC usually means a higher conversion value. If your goal is to drive traffic to your website, you should consider using this form of advertising.
CPM – Cost Per Mile
CPM stands for Cost Per Mille, which means cost per thousand impressions. In other words, it’s the cost per 1000 times the ad is shown to viewers. CPM does not measure viewer actions; it only determines the price for displaying ads. Some performance marketers are focusing less on CPM and more on specific, action-based, meaningful metrics.
CPS – Cost Per Sales
CPS is an index used to measure the effectiveness of an advertising campaign, based on the amount the advertiser must pay for each successful order.
CPL – Cost Per Lead
CPL is the cost per potential customer. CPL is an important index in marketing, used to measure the effectiveness of online advertising campaigns. The lower the CPL, the higher the effectiveness of the marketing campaign. A reasonable CPL will depend on many factors such as industry, product, customer,…
CPA – Cost Per Acquisition
CPA is a metric that measures campaign performance in terms of a specific desired action a business wants its target audience to take, such as downloading an e-book, subscribing, purchasing an item, etc. In Performance Marketing, the actions of potential customers are considered the most important tangible and measurable results, so CPA is also one of the important and popular metrics.
To fully understand these Performance Marketing indicators, you can check out this post.
5 Steps to Build a Performance Marketing Campaign
Step 1: Determine campaign goals
The first step in the process of building a Performance Marketing campaign is determining the goal of the campaign. Businesses should adhere to SMART goal setting, which is specific, measurable, achievable, relevant, and time-bound. Some common Performance Marketing goals include:
- Increase website visits
- Increase conversions
- Increase revenue
- Increase brand recognition
- Enhance customer loyalty
Step 2: Choose the appropriate channel
Next, the team proceeds to select the appropriate deployment channel. At this step, don’t just choose a single channel, but diversify to expand visibility and reach the target audience. Accordingly, businesses need to:
- Analyze the target audience to determine suitable channels.
- Evaluate factors like budget, reach, and measurability to choose the most effective channel.
- Conduct tests to evaluate the effectiveness of different channels.
Step 3: Deploy the campaign
In this step, businesses need to identify the target audience and understand their difficulties and needs. Then proceed to create appropriate advertising and messages to address needs and attract interest.
- Set up campaign goals, budget, targeting, and tracking.
- Create content, ads, and other marketing materials that are relevant to your target audience.
- Run campaigns and track performance.
Step 4: Measure and optimize campaigns
Performance Marketing campaigns are launched and deployed right from the moment they are set up. From there, marketers can customize and optimize each campaign to achieve the best results on the advertising channels being used. Regularly analyzing and tracking metrics and statistical data, marketers can determine which traffic sources are delivering the best results and allocate advertising resources effectively.
Performance Marketing campaigns, in addition to helping increase sales, also help identify the most effective channels, audiences, and campaign goals, thereby maximizing returns on investments.
- Track important KPIs to evaluate campaign performance.
- Make necessary adjustments to improve performance.
- Set up reports to track campaign progress.
Step 5: Handle potential risks
Every Marketing campaign has potential risks, such as fraud, data breaches, and competition. The business’s Marketing team needs a plan to handle these risks.
Popular Forms of Performance Marketing
Affiliate Marketing
Affiliate Marketing is a form of performance-based marketing in which distributors (Publishers, KOLs, Content creators) will receive commissions from suppliers (Advertisers) when performing specific actions, such as:
- The customer clicks on the distributor’s link and visits the supplier’s website.
- Customers purchase products or register for supplier services through the distributor’s link.
- The customer completes other specific actions as determined by the provider.
Simply put, Affiliate Marketing is a form of making money online by promoting other people’s products and services. The distributor will act as a connection between the supplier and the customer.
Native Advertising
Native Advertising is a type of paid advertising designed to blend with the content of the website or app where it appears. Native ads are typically displayed as sponsored posts, in-stream posts, suggested ads, or other content formats that align with the user experience.
For example, when we are reading an article on a news website, we may see native ads appearing in the form of sponsored posts at the bottom of the page. This sponsored article will have a clear label indicating it is an advertisement, but it is also written in a similar style to other articles on the site, making it look like part of the site’s content.
Native advertising has several advantages over other types of traditional advertising, such as banner advertising. First, native ads are often less annoying to users because they are not as prominent as other types of ads. Second, native ads can be more effective because they are targeted to a more specific audience and they can be designed to match that audience’s interests.
Content Marketing
Content Marketing in Performance Marketing is the use of content to attract and convert potential customers into paying customers. It can be done in many different ways, such as:
- Create content that is valuable and relevant to your business’s target audience. Can include blogs, articles, videos, podcasts, ebooks, white papers, etc.
- Distribute content across channels used by your target audience. It could be a website, blog, social media, email marketing,..
- Use paid advertising to promote content to a broader audience. This can help businesses attract more visitors to the website and collect more leads.
Content marketing can be used to support all stages of the sales funnel in Performance Marketing, from attracting leads to converting them into paying customers.
Social media marketing
Social Media in Performance Marketing is using social networking platforms to reach a business’s potential audience and create effective advertising campaigns. This platform allows marketers to quickly interact with potential customers and customize ads to the right potential customers. This helps increase engagement, build brand awareness, and increase sales.
Search engine marketing (SEM)
SEM is a strategy to reach potential customers through online advertising on search engines such as Google, Bing, Yahoo,… It includes two methods: Paid advertising on search results (Search Advertising) and Display Advertising (Display Advertising). SEM plays an important role in Performance Marketing, helping to increase interaction and achieve higher sales.
Advantages and Disadvantages of Performance Marketing
Advantages
- Measure effectiveness clearly: Performance Marketing allows businesses to measure the effectiveness of marketing campaigns accurately and easily. Based on that, businesses can optimize Marketing spending and ensure investments are bringing profits.
- Low cost: Performance Marketing often has lower costs than traditional forms of marketing. Because businesses only pay for specific results, it is necessary to invest only in marketing channels and campaigns that are likely to bring profit.
- Highly targeted capabilities: Performance Marketing allows businesses to target marketing campaigns to specific target audiences. Helps businesses reach the right customers with the right message, thereby increasing the effectiveness of campaigns.
- High flexibility: Performance Marketing can be applied to many different types of businesses and marketing goals. Making it a flexible and effective Marketing solution for many businesses.
Disadvantages
- Depends on data: Performance Marketing requires continuous data analysis and monitoring to measure effectiveness. Without accurate data or not enough data, marketers may have difficulty evaluating and optimizing campaigns.
- Short-term action bias: Performance Marketing often focuses on driving short-term actions, such as purchases or service subscriptions. This can unintentionally undermine long-term strategic vision and build sustainable relationships with customers.
- Competition and rising costs: Because Performance Marketing depends on bidding and paying for advertising actions, competition can increase advertising costs. If an industry has many competing marketers, paying for action can become more expensive and difficult.
Ecomobi – the best Performance Marketing platform in Southeast Asia for KOLs
With more than 6 years of experience, Ecomobi is proud to be the leading celebrity sales platform in Southeast Asia, connecting more than 10,000 brands with more than 5,000 KOLs. We are looking for passionate individuals who want to become professional KOLs, creating value for the community and partners.
By joining Ecomobi, you will not only satisfy your passion but also have the opportunity to increase your stable income. If you have over 10,000 followers on Youtube, and Instagram or over 50,000 on TikTok, let Ecomobi help you become a professional KOL. We offer attractive passive income sources and opportunities to cooperate with many big brands.
Ecomobi always puts KOLs and Publishers as the focus, providing the best support policies and tools:
- Attractive commission: Up to 20%, the highest in the market.
- Referral bonus: Bonus for each successful KOL referral.
- Commissions per click: Increase diverse income.
- Supporting technology: AI Chatbot, personal landing page,… help increase the number of followers quickly.
- Dedicated 1:1 support to help KOL with all their problems
Thousands of other KOLs have had success with Ecomobi. How about you? Let Ecomobi help you boost your income today! Register now!
Contact us, Ecomobi:
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