With the continuous growth of digital marketing performance marketing is rising to the occasion and changing the game because of how it impacts the way businesses advertise and sell their products and services.
Identifying effective marketing strategies are essential to growing your business. They help you tap and connect with your target audience, build brand recognition, cement brand affinity, and influence consumer behavior. It’s like a roadmap that guides business owners to achieve their goals and grow their business.
As the current lead of the Performance Marketing Department in Four Media I’ll talk about what performance marketing entails – its breakdown, what it is, how it works, why it’s important, and the channels used for this strategy.
What is Performance Marketing?
As the name suggests, it’s marketing based on performance.
Performance marketing is a comprehensive term for online marketing and advertising programs where advertisers pay only when a specific action occurs. These actions can include a generated lead, a sale, a click, and more.
Performance marketing professionals—in agencies, with media companies, publishers, or otherwise—rely heavily on paid marketing channels including:
- Native advertising
- Sponsored advertising
- Affiliate marketing
- Social media advertising
- Search engine marketing
How Does Performance Marketing Work?
Four groups are involved in creation and execution of successful performance marketing campaigns, and they all work together to achieve the desired results.
Retailers or Merchants
Otherwise known as advertisers, these are the brands or companies that sell goods and services. They look to promote their offering to accomplish specific objectives, such as generating more sales or leads, with the help of affiliate partners or “publishers.” Companies in industries like fashion, food and beverage, health and beauty, and more have everything to benefit from performance marketing.
Publishers or Affiliates
This refers to the companies that own and operate media channels, like websites, blogs, or social media accounts, that promote digital ads. They are also called “marketing partners.” The publishers utilize different strategies (like display banners or search ads) to promote the brand and its products/services to accomplish their goals.
Networks and Platforms
Third-party platforms or affiliate networks connect brands and publishers and provide a one-stop destination for resources and tools, including banners, text links, campaign performance tracking, and payment management. They serve as a way to keep both the merchant and affiliate on one page when it comes to tracking leads, clicks, conversions, and other key performance indicators (KPIs).
Outsourced Program Managers (OPMs)
This pertains to the firms and agencies that offer full-time performance marketing services for companies that don’t have the workforce to do it in-house. OPMs help businesses devise a marketing strategy, manage publisher recruiting, take care of campaign design, and comply with regulations to ensure that each campaign runs smoothly.
These agencies can also optimize campaign performance for maximum results through other online marketing best practices, such as landing page optimization, search engine optimization (SEO), content marketing, and more.
Performance Marketing Strategy
If performance marketing is about paying for action, it pays to have a strong grasp on the various strategies most commonly used, and the actions most commonly measured.
Cost Per Impression (CPM): The amount an advertiser pays a publisher per one thousand times that their advertisement is shown
Cost Per Click (CPC): The amount an advertiser pays only when their advertisement is clicked on
Cost Per Sales (CPS): The amount an advertiser pays only when a sale is directly generated by an advertisement
Cost Per Leads (CPL): The amount an advertiser pays when they receive a sign-up from an interested consumer as a direct result of their advertisement
Cost Per Acquisition (CPA): The amount an advertiser pays when a specific action, such as a sale, a form completion, or a click, occurs
To evaluate your choices, and continue refining them, you’ll need to consider your campaign goals, choice of platforms, costs, and of course, results.
Top performance marketing channels
- Affiliate Marketing
The difference between Affiliate Marketing and Performance Marketing, Affiliate Marketing is more related to any type of marketing that’s affiliated with the advertiser and paid out after the desired action takes place.
This usually involves partnering with coupon, loyalty, review, and incentive sites.
Affiliate Marketing is the most traditional, and most commonly used term when referring to Performance marketing.
- Native Advertising
This is a form of paid media that, unlike display ads or banner ads, don’t truly look like ads.
These types of ads tend to follow the natural form and function of the site it is placed on such as news or social sites, and can often be fed dynamically based on each user reading or viewing the content.
The most common payment models for Native Advertising are CPM (Pay Per Impression) and CPC (Pay Per Click).
- Sponsored Content
Mostly used by influencers and content sites, this type of Performance Marketing involves a dedicated post or article promoting a brand and/or product in return for some form of compensation.
Sometimes the compensation will be in the form of free product or an experience, while other times it is a CPA, CPM or CPC based payout.
- Social Media Marketing
This type of Performance Marketing is the usage of social media platforms to gain traffic or brand awareness, such as content being showcased on Facebook, Pinterest or Instagram.
The metrics that are typically measured in social media based “performance marketing” are usually centered around engagement, likes, clicks, and sales.
- Search Engine Marketing
Broken down into two parts, Search Engine Marketing can be successful through paid and/or organic options.
Paid Search Marketing is simply when an advertiser pays for clicks to ads on search engines such as Google, Bing, and Yahoo while Organic Search is the opposite – using unpaid methods such as Search Engine Optimization (SEO) and relying on the search engine’s own algorithm to rank in the top.
Some companies measure their Search Engine Marketing results on a performance basis, while others partner and pay out commissions to SEM companies and campaigns based on results.
READ MORE: What is a Go-to-Market Strategy & How to Develop a Winning Plan for your brand
Performance Marketing In The Singapore Context
‘Digital marketing in Singapore has grown tremendously over the last five years. Businesses that were initially not of the idea of investing thousands of dollars this form of marketing have fully-fledged websites and e-commerce platforms.
The industry is expected to grow by 20% this year as more Singapore businesses become more aware of the potent power of digital marketing. There are different types of marketing and it is important to understand how each works to select one that suits your business.
One of the digital marketing strategies that have gained traction in Singapore over the last one year is performance marketing. Today, we will look at what this form of marketing entails and how you can apply it in Singapore.
What is Singapore Performance Marketing?
Simply put, performance marketing is a holistic term that is used to refer to online marketing activities as well as advertising programs which advertisers or merchants pay marketing companies in Singapore. The amount pay is calculated based on the specific action taken or completed such as click, sale, or lead. The desired action that you pay for is dependent on the nature of your business and the marketing campaign you are running.
What Makes Performance Marketing Special?
This is one of the most common questions that we get from Singapore business owners who want to try this form of marketing to grow their brands. One of the highlights of performance marketing is that it is a combination of innovation and advertising strategies that are designed to help affiliates and retailers to elevate their businesses to the next level in the dynamic Singapore digital marketing industry.’
Source: https://mediaonemarketing.com.sg/performance-marketing/
Takeaway
Performance marketing is a great strategy when you want to be able to measure results, and get them fast. It allows you to see exactly how each ad dollar is used to ensure it is working as hard as possible. That means more efficient campaigns, with less money wasted. To really hit your business goals, it’s important you build your campaigns strategically—choose the right platform, ad format, optimization goals, focus on the right audience and of course—create an ad that will resonate with your target audience.
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