Performance marketing and the use of data to convert more

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Performance marketing represents a significant change from traditional marketing methods. It focuses on achieving specific and measurable results, guided by clear and objective metrics.

In this article, we will explore the main features and benefits of performance marketing, as well as the strategies and tactics your company can adopt to be successful with this approach.

This will make it easier to leverage the effectiveness of your actions in the digital environment. Which will drive business growth, increase brand visibility, expand customer base and maximize return on marketing investment.

Or read on and prepare: you can achieve exceptional results in an increasingly competitive business environment.

After all, what is performance marketing?

Performance marketing is a type of digital marketing where budgeting and decision-making are primarily driven by the measurable results of a specific campaign.

So it relies on an active, iterative feedback loop: run campaigns, see what works, double down, repeat.

From a practical standpoint, the term refers almost entirely to paid marketing campaigns. Other types of digital marketing, like organic social media or SEO, can certainly boost sales.

However, feedback cycles on these channels are too slow to be considered true marketing campaigns.

Google and Meta (owner of Facebook and Instagram) are the two common platforms for running marketing campaigns online.

In fact, the term performance marketing was coined shortly after the advent of pay-per-click (PPC) advertising, starting with banner ads (display) and Google Search Ads.

But although the term is often associated with pay-for-results, the billing model does not determine whether something is marketing.

So campaign decisions need to be made based on measurable results. Then this can be considered performance marketing.

How is Performance Marketing different from other strategies?

In most traditional forms of advertising, the advertiser pays an upfront fee for advertising space – regardless of performance. So this could mean hundreds and even thousands of dollars spent without ever seeing a conversion.

But, in performance marketing, you only pay when your goal is met. Be it conversion, action or transaction. To make it clearer, we will address them individually below:

Performance marketing

In a market increasingly saturated with brands, standing out is a challenge. Therefore, brand recognition is essential. So there are many ways to increase brand awareness, such as:

• Social media campaigns
• Native Advertising
• Content marketing and more

Some of these can actually fall under the performance marketing umbrella because they are measurable and advertisers only pay for specific actions.

Performance Marketing X Affiliate Marketing

Affiliate marketing is a defined subset of performance marketing. Because it is entirely driven by metrics and goals.

Through affiliate marketing, you earn a commission by promoting another company’s product or service online.

Then the affiliate marketer advertises on the merchant’s behalf, with the goal of driving traffic, clicks, and sales to the merchant’s website.

Thus, the affiliate receives payment only for actions performed, such as clicks, conversions or leads.

Performance marketing vs. programmatic marketing

Programmatic marketing is an automated method of purchasing advertising space, targeting the most relevant audience at the best possible price.

Therefore, programming is becoming an essential ingredient of performance marketing, as it allows advertisers to buy better placements at scale and maximize their ROI.

What are the main types of performance marketing?

Currently, companies looking for more significant results invest in four main types of performance marketing:

Advertising on social media

This includes running ads on Facebook, Instagram, Twitter, LinkedIn and more.

These campaigns are typically built up using a funnel structure:

• Reach new people (prospecting call)
• Attract users who have visited your website but not yet converted (retargeting)

Not all social media advertising is performance marketing. So when it’s not used to drive conversions, it can also be used for brand marketing or market validation.

Search Engine Marketing (SEM)

Search engine marketing refers to running advertising campaigns to drive traffic from search engines such as Google or Bing.

This way, your digital marketing agency will structure campaigns based on the types of searches they target.

For example, a company may have campaigns for the type of product it sells, competing brands, and its own brand.

Influencer marketing

Influencer marketing hasn’t always been regarded as “performance” marketing historically. But in recent years, that has changed. Because influencers have become more business savvy.

Additionally, platforms like Instagram itself have allowed brands to properly track and iterate their influencer partnerships. As a result, they have become truly oriented.

Native Advertising/Sponsored Content

The methodology is similar to influencer marketing. But instead of paying an influencer to talk about your brand, you pay a publication to write about it.

So a positive aspect is that this grants them a high degree of creative control over what they publish for their brand.

Some publications call it native advertising, others call it sponsored content, but the strategy is the same.

In fact, it is worth remembering that, in general, publications have a regulatory requirement to disclose that the content is sponsored.

Benefits of Performance Marketing

Now that you know what this type of digital marketing is, you should also try to understand its benefits – such as:

Measurement

The main positive point of marketing is the possibility of tracking your progress and measuring it. It allows you to set a measurable goal and then measure the actual results of a campaign.

You can calculate metrics such as CPC, CPL, CPI, among others. In addition to being able to make the necessary corrections to the campaign if the numbers are different from your target.

Range

You may broaden the appeal of your company with performance marketing. Especially since the platforms allow you to target audiences and select geographic regions where you want your ads to appear.

Thus, your company can use different digital and collateral channels to increase the reach of the business.

Economy

Remuneration for a performance marketing campaign is based on results. Therefore, it offers a higher ROI and effective costs.

Thus, it becomes an affordable form of marketing. Especially compared to other traditional methods of promoting your products and reaching the public.

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