Performance marketing is a performance-based form of paid marketing and advertising where a business only pays once a desired action is achieved. These actions – agreed upon by the business (merchants) and the marketing partners (publishers) ahead of time – may be in various forms such as clicks, generation of leads, and most of the time, a sale. Marketers are able to measure their success in achieving said actions through performance marketing platforms or software.
Marketing performance can be executed in a number of ways. A company can create a marketing ad or branded content and partner with publishers (i.e., Facebook, Google, or more niche websites) who then display the company’s ad on their platform. With influencer marketing, the influencers are the publishers and they promote a company through their (the influencer’s) own content – vlogs, social media posts, etc. – and share it through their social media channels. Once a desired action is completed, the company then pays the publishers who ran the ad on their platform or promoted the company through their content.
Businesses who are considering performance marketing should be fully aware of the benefits that a campaign can have on their company. Here are the four biggest perks that performance marketing offers businesses:
Performance marketing is much more budget-friendly than traditional display advertising. Instead of paying a sum upfront regardless of the results, companies who employ performance marketing only have to pay when a specific action is achieved. Especially if you’re a small business operating on a limited budget, this is a much more cost-effective and results-driven strategy.
Performance marketing also allows for better planning as businesses are specifically identifying their goals and negotiating an ideal rate for each of the actions that are completed. If a company aims to reach 1,000 lead conversions and agrees upon a rate of $ 0.50 per conversion, that company can then prepare to spend $ 500 on that campaign.
2. Easy Performance tracking
With performance marketing, measuring the performance and effectiveness of your company’s marketing strategy becomes easier. Digital performance marketing tools like Affise or Anytrack exist for this very purpose. Business owners won’t have to make guesses or estimations about how many leads were converted from a given initiative. When the desired results of an initiative are achieved – whether it’s a potential customer signing up for the company’s marketing emails, or clicking on an ad – these results are automatically tracked via the company’s performance marketing tool.
Furthermore, these tools will take the raw data from marketing initiatives and interpret it to give the company an accurate look at its ROI. This empowers companies to better evaluate the success generated from smaller initiatives as well as larger campaigns as a whole.
Performance marketing allows business owners to determine the amount of value they’ll get out of their investment. Marketing software platforms provide real-time results and performance tracking so businesses can see what desired actions are being achieved as it’s happening. They also reveal which partners are doing best when it comes to clicks, subscribers, conversions, or other metrics, so businesses can use those insights to improve their campaigns and boost their company’s bottom line further.
There’s less risk with performance marketing than other types of marketing campaigns. First off, you’re only paying for desired actions once they’ve been achieved so you truly get what you pay for. These types of campaigns are also much more flexible. Business owners have the power to tweak their budget should their company incur any financial problems. They can also stop campaigns all together if desired result aren’t being met, or they are being met and the company has reached its max budget.
Getting Started on Performance Marketing
If you think your business is ready to make use of performance marketing to improve your bottom line, here are three steps you should take to get started:
1. Establish Your Goals
The first step to performance marketing is to identify what your company’s goals are. Do you need to drive more visitors to your website? Generate more leads? Or convert leads to paying customers? Identifying your goals will guide you in choosing what metrics you’ll use to measure how well those goals are being met. It will also determine what platform(s) you’ll use to execute your performance marketing campaign.
2. Determine the Format You Want to Advertise on and Look for Opportunities
After you’ve identified your goals, the next step is to determine how you want to advertise. Here are some options to consider:
- Influencer Marketing. This is often done by leveraging micro-influencers – individuals with anywhere from 2,000 to 50,000 social media followers who, in some cases, are experts in a specific industry or niche. Depending on your company’s budget, you can certainly look to partner with bigger-name influencers who have larger followings but this will be more expensive. Influencer marketing is more organic than tradition advertising because the influencers will promote your brand through their own original content, labeling it as an #ad, in exchange for an agreed upon fee.
- Affiliate Marketing. Affiliate marketers can be recruited to promote and sell your brand to others. You would then pay them a commission on every sale they make.
- Your company can create ads or branded content and partner with publishers like Facebook and Google to display it on their platforms. You’ll want to research and identify publishers that reach your target audience so this may include more niche websites and blogs as well.
- Social Media. Twitter, Instagram, LinkedIn, and other social media platforms are also great places to advertise your brand since it’s where the majority of the population spends most of their time online. Companies should have their own social media pages on each of these platforms where they can promote their own content, products, news, etc. on a consistent basis. The beauty here is that you know your audience of followers are interested in your brand, otherwise they wouldn’t follow you.
3. Don’t Forget to Track and Measure Your Success
Lastly, you won’t know whether your efforts have been successful or not if you don’t track or measure your performance. Make use of performance marketing software to get reports and analytics which will be vital to measuring your campaign’s performance. This will help you gauge success and evaluate the areas you’re doing well in so you can put more focus on those areas.
Final Thoughts on Performance Marketing for Small Businesses
There is still a lot a business owner and marketer can learn from performance marketing. Some of the points mentioned above are just the tip of the iceberg. Nevertheless, performance marketing, if done right, can be an invaluable tool for many small businesses. It’s cost-effective, and entrepreneurs can easily track the results through any performance marketing platform.