Post by sumiseo558899 on Nov 7, 2024 0:55:40 GMT -5
Performance marketing is often perceived as a magic pill for business. It works for sales and generates leads - everything is clear and to the point, every ruble pays off. But what is behind this, how to build a truly effective performance strategy and how many resources are needed for this - not everyone understands.
In this article, we will break it down: what content writing service
is performance marketing, in what channels and how it works, how much and what kind of effort is needed to set it up correctly. We will tell you about the pros and cons of the tool, and share examples.
Introduction to Performance Marketing
Performance marketing is a direction of digital marketing, an approach based on measurable results. In traditional TV advertising, digital banner advertising or image special projects, marketers often evaluate success in high-level metrics: growth of brand awareness or change in perception of brand attributes. Performance marketing focuses on specific user actions and their impact on business indicators.
Differences from regular advertising:
Pay for results, not impressions. Instead of paying for banner or video impressions (CPM), performance marketing pays for specific actions: clicks (CPC), leads (CPL), sales (CPS), or any other target actions (CPA).
Measurability and analytics: Marketers track and analyze the steps in the sales funnel. This means that the effectiveness of each channel, ad, and even keyword in context can be accurately measured.
Close connection with business indicators. Campaigns are built taking into account specific business goals: increasing sales, Lifetime Value, Return on Investment, etc.
Flexibility and optimization in real time. You can quickly make adjustments to campaigns: change rates, targeting settings, creatives. This way, marketers optimize costs faster and improve results.
At the same time, performance marketing works in conjunction with other digital marketing blocks: SEO, SMM, CRM, content marketing. For example, good SEO optimization of a website increases the click-through rate (CTR) of contextual advertising. And large-scale investments in contextual advertising increase brand awareness and work in conjunction with reach banner campaigns.
Ultimately, performance marketing is a comprehensive, data-driven approach that attracts clients who bring real profit to the business.
The mechanism of performance marketing
Let's look at the algorithm of work in performance marketing. Successful campaigns in performance are built in simple stages:
Step 1. Category Analytics
Study the market in your niche and individual competitors. Identify benchmarks and find best practices worth trying. It is important to analyze the target audience: its profile, interests, and problems. Compare this data with your offer: what are its advantages compared to competitors, what should be highlighted or adjusted.
Example. Having analyzed the audience of mortgage borrowers, the bank identified 3 different segments: families with children, investors, young people who move to large cities. Semantics were collected for all segments and three different campaigns with unique creatives and landing pages were set up.
Step 2. Setting goals and objectives
Define your business goals. What do you want to achieve with performance marketing? Increase sales, reduce the cost of acquiring new customers, grow your customer base? Goals should be specific, measurable, achievable, and time-bound.
Focus on performance marketing metrics:
CPA (Cost Per Action) — cost of a target action (application, purchase, registration, subscription).
CPL (Cost Per Lead) — the cost of attracting a lead (contact information of a potential client).
CPC (Cost Per Click) is the cost of a click on an advertisement.
CR (Conversion Rate) — conversion rate (the ratio of the number of target actions to the total number of site visitors).
ROAS (Return on Ad Spend) is the income generated by a performance campaign or a separate channel.
Example. A new district sushi delivery service needs to fulfill a sales plan and build a customer base. This means that the campaign's KPI will be CPA — completed orders. An educational platform sells a psychology course and "warms up" users in several stages: context, consultations and webinars, personal sales. Here, it will be important to collect leads from the context — applications for consultations or registrations for a webinar.
Step 3. Defining performance marketing channels and budget planning
Choice of channels: contextual advertising, targeted advertising in social networks, CPA, etc.
Budget distribution. Based on the analysis of the capacity and cost of acquisition in the channels, distribute the budget between them.
A/B testing. Experiment and compare the effectiveness of different versions of ads, landing pages, creatives. Look for new ways and formats of advertising placement.
Example: A youth clothing brand would be better suited to social networks and influence marketing, while a tractor plant would be better suited to a traditional context.
Step 4. Launch and optimization
Create advertising campaigns. Make ads with a simple call to action, create landing pages optimized for keywords, improve the UX of pages.
Monitoring and data analysis. Track key metrics in real time, identify growth points.
Campaign optimization. Make adjustments to campaign settings, creatives, ad texts based on the data received to improve efficiency and achieve your goals.
Example: An online shoe store notices that ads with photos of products on models receive more clicks than ads with simple photos of products on a white background. The store changes the creatives and increases the campaign's CTR.
Step 5. Analysis of results
Assess the campaign results according to the set KPIs, draw conclusions: what mistakes were made and what decisions were successful. Based on this, adjust the performance strategy.
Example. At the end of the quarter, an online store marketer analyzes the results of advertising campaigns and discovers that the CTR of contextual ads has dropped by 20%. The ads contain outdated information, and competitors are actively promoting promotional offers. This means that it is necessary to launch promotions and adjust ads to increase the CTR.
We have already written in more detail about KPI metrics in another article: we analyzed the types and goals of advertising, how metrics differ from KPIs and what types there are, and also shared tips on increasing the effectiveness of advertising.
Read the article
Advantages and limitations of performance marketing
The main advantage of performance marketing is the measurability of results and direct connection with business indicators. Unlike other digital marketing channels, where it is difficult to evaluate the effectiveness of each ruble invested, in performance you pay for a specific user action.
Businessmen often come up with a simple solution: why not spend the entire marketing budget on performance? Performance marketing is not a “silver bullet”. Firstly, it works in conjunction with other tools. Secondly, it has limitations:
High competition and cost per lead. In some niches, the cost of attracting a client can be very high, which makes performance marketing unprofitable. This is especially true for small businesses operating in highly competitive categories or products with a low average check.
The need for constant optimization. Setting up and optimizing campaigns is an ongoing process that requires testing, data analysis, and strategy adjustments. This means you need a resource: full-time marketers or an agency that will do this.
Limited offline interaction. For complex products that require personal sales, performance marketing is only an auxiliary tool.
Effective channels in performance marketing
Let's list the channels in which the performance works:
Contextual advertising. Shown to users in search engines based on their queries. You can also use advertising in networks - the audience shows one or another interest when visiting sites. Based on this data, advertising will be shown to them. In Russia, placement in Yandex is now available.
SMM (targeted advertising). Advertising in social networks that is targeted to a specific audience based on demographic data, interests, behavior, which can be set in the advertising account of the platform.
Marketplaces. E-commerce platforms where sellers can place their goods and services: Wildberries, Ozon, Yandex.Market, etc. These platforms have their own paid advertising capabilities.
Mobile-marketing. Mobile applications have already become an independent advertising channel. They can be used for banners, full-screen ads or push notifications.
Remarketing. Showing ads to users who have already interacted with your brand: visited the site or added products to the basket. This is the “catch-up” stage of contextual or outreach image campaigns.
Affiliate channels. Cooperation with other companies or individuals who promote your products or services for a fee. For example, CPA networks: the partner receives a reward for each attracted client.
Are you advertising in Yandex Direct? Use our checklist to independently check the settings of the advertising account: campaigns, strategies, ad quality, targeting.
Download checklist
The Role of Analytics in Performance Marketing
Analytics is the foundation of performance marketing. It allows you to make decisions based on data, not guesswork. What you need to analyze:
1. Market and competitive environment
Study the demand for your product or service, market capacity and trends. Look at competitors, their pricing, promotion and positioning strategies. Identify competitors' strengths and weaknesses, traffic acquisition channels and performance marketing tools.
In this article, we will break it down: what content writing service
is performance marketing, in what channels and how it works, how much and what kind of effort is needed to set it up correctly. We will tell you about the pros and cons of the tool, and share examples.
Introduction to Performance Marketing
Performance marketing is a direction of digital marketing, an approach based on measurable results. In traditional TV advertising, digital banner advertising or image special projects, marketers often evaluate success in high-level metrics: growth of brand awareness or change in perception of brand attributes. Performance marketing focuses on specific user actions and their impact on business indicators.
Differences from regular advertising:
Pay for results, not impressions. Instead of paying for banner or video impressions (CPM), performance marketing pays for specific actions: clicks (CPC), leads (CPL), sales (CPS), or any other target actions (CPA).
Measurability and analytics: Marketers track and analyze the steps in the sales funnel. This means that the effectiveness of each channel, ad, and even keyword in context can be accurately measured.
Close connection with business indicators. Campaigns are built taking into account specific business goals: increasing sales, Lifetime Value, Return on Investment, etc.
Flexibility and optimization in real time. You can quickly make adjustments to campaigns: change rates, targeting settings, creatives. This way, marketers optimize costs faster and improve results.
At the same time, performance marketing works in conjunction with other digital marketing blocks: SEO, SMM, CRM, content marketing. For example, good SEO optimization of a website increases the click-through rate (CTR) of contextual advertising. And large-scale investments in contextual advertising increase brand awareness and work in conjunction with reach banner campaigns.
Ultimately, performance marketing is a comprehensive, data-driven approach that attracts clients who bring real profit to the business.
The mechanism of performance marketing
Let's look at the algorithm of work in performance marketing. Successful campaigns in performance are built in simple stages:
Step 1. Category Analytics
Study the market in your niche and individual competitors. Identify benchmarks and find best practices worth trying. It is important to analyze the target audience: its profile, interests, and problems. Compare this data with your offer: what are its advantages compared to competitors, what should be highlighted or adjusted.
Example. Having analyzed the audience of mortgage borrowers, the bank identified 3 different segments: families with children, investors, young people who move to large cities. Semantics were collected for all segments and three different campaigns with unique creatives and landing pages were set up.
Step 2. Setting goals and objectives
Define your business goals. What do you want to achieve with performance marketing? Increase sales, reduce the cost of acquiring new customers, grow your customer base? Goals should be specific, measurable, achievable, and time-bound.
Focus on performance marketing metrics:
CPA (Cost Per Action) — cost of a target action (application, purchase, registration, subscription).
CPL (Cost Per Lead) — the cost of attracting a lead (contact information of a potential client).
CPC (Cost Per Click) is the cost of a click on an advertisement.
CR (Conversion Rate) — conversion rate (the ratio of the number of target actions to the total number of site visitors).
ROAS (Return on Ad Spend) is the income generated by a performance campaign or a separate channel.
Example. A new district sushi delivery service needs to fulfill a sales plan and build a customer base. This means that the campaign's KPI will be CPA — completed orders. An educational platform sells a psychology course and "warms up" users in several stages: context, consultations and webinars, personal sales. Here, it will be important to collect leads from the context — applications for consultations or registrations for a webinar.
Step 3. Defining performance marketing channels and budget planning
Choice of channels: contextual advertising, targeted advertising in social networks, CPA, etc.
Budget distribution. Based on the analysis of the capacity and cost of acquisition in the channels, distribute the budget between them.
A/B testing. Experiment and compare the effectiveness of different versions of ads, landing pages, creatives. Look for new ways and formats of advertising placement.
Example: A youth clothing brand would be better suited to social networks and influence marketing, while a tractor plant would be better suited to a traditional context.
Step 4. Launch and optimization
Create advertising campaigns. Make ads with a simple call to action, create landing pages optimized for keywords, improve the UX of pages.
Monitoring and data analysis. Track key metrics in real time, identify growth points.
Campaign optimization. Make adjustments to campaign settings, creatives, ad texts based on the data received to improve efficiency and achieve your goals.
Example: An online shoe store notices that ads with photos of products on models receive more clicks than ads with simple photos of products on a white background. The store changes the creatives and increases the campaign's CTR.
Step 5. Analysis of results
Assess the campaign results according to the set KPIs, draw conclusions: what mistakes were made and what decisions were successful. Based on this, adjust the performance strategy.
Example. At the end of the quarter, an online store marketer analyzes the results of advertising campaigns and discovers that the CTR of contextual ads has dropped by 20%. The ads contain outdated information, and competitors are actively promoting promotional offers. This means that it is necessary to launch promotions and adjust ads to increase the CTR.
We have already written in more detail about KPI metrics in another article: we analyzed the types and goals of advertising, how metrics differ from KPIs and what types there are, and also shared tips on increasing the effectiveness of advertising.
Read the article
Advantages and limitations of performance marketing
The main advantage of performance marketing is the measurability of results and direct connection with business indicators. Unlike other digital marketing channels, where it is difficult to evaluate the effectiveness of each ruble invested, in performance you pay for a specific user action.
Businessmen often come up with a simple solution: why not spend the entire marketing budget on performance? Performance marketing is not a “silver bullet”. Firstly, it works in conjunction with other tools. Secondly, it has limitations:
High competition and cost per lead. In some niches, the cost of attracting a client can be very high, which makes performance marketing unprofitable. This is especially true for small businesses operating in highly competitive categories or products with a low average check.
The need for constant optimization. Setting up and optimizing campaigns is an ongoing process that requires testing, data analysis, and strategy adjustments. This means you need a resource: full-time marketers or an agency that will do this.
Limited offline interaction. For complex products that require personal sales, performance marketing is only an auxiliary tool.
Effective channels in performance marketing
Let's list the channels in which the performance works:
Contextual advertising. Shown to users in search engines based on their queries. You can also use advertising in networks - the audience shows one or another interest when visiting sites. Based on this data, advertising will be shown to them. In Russia, placement in Yandex is now available.
SMM (targeted advertising). Advertising in social networks that is targeted to a specific audience based on demographic data, interests, behavior, which can be set in the advertising account of the platform.
Marketplaces. E-commerce platforms where sellers can place their goods and services: Wildberries, Ozon, Yandex.Market, etc. These platforms have their own paid advertising capabilities.
Mobile-marketing. Mobile applications have already become an independent advertising channel. They can be used for banners, full-screen ads or push notifications.
Remarketing. Showing ads to users who have already interacted with your brand: visited the site or added products to the basket. This is the “catch-up” stage of contextual or outreach image campaigns.
Affiliate channels. Cooperation with other companies or individuals who promote your products or services for a fee. For example, CPA networks: the partner receives a reward for each attracted client.
Are you advertising in Yandex Direct? Use our checklist to independently check the settings of the advertising account: campaigns, strategies, ad quality, targeting.
Download checklist
The Role of Analytics in Performance Marketing
Analytics is the foundation of performance marketing. It allows you to make decisions based on data, not guesswork. What you need to analyze:
1. Market and competitive environment
Study the demand for your product or service, market capacity and trends. Look at competitors, their pricing, promotion and positioning strategies. Identify competitors' strengths and weaknesses, traffic acquisition channels and performance marketing tools.