Introduction to Performance Marketing Strategy
In traditional marketing, media planners advise you to go place your advertisements in newspapers or magazines with the highest circulation or readership and it is your hope that the hard money you spent would bring results.
In websites, the banner ads in home pages and inside pages give opportunities for marketers to reach out to a large audience but visitors tend to skip them as they will be actively looking for some information or data. Moreover, display ads with more pixels and heavy animation may take time to load
and therefore not quite appealing for the marketer.
With recessionary trends, tough competition and the need to show results, marketers are now more focused on Performance Marketing Strategy where they have to pay only on the basis of a result obtained from the Ad and not for displaying it.
Performance Marketing Strategy refers to the form of interactive advertising in web where the marketer pays not a fixed price for displaying the banner ad or logo in the website or a text link, pays when the visitor takes action on it – either seeing the page, clicking on the ad, registering for a product or service or buying it. Or it could be based on lead generation.
Some of the popular channels for Performance Marketing Strategy include Google AdWords, websites, social media such as Facebook, Twitter. Since, Performance Marketing Strategy is the result –oriented that may the trend for the future when it comes to online marketing or digital marketing.
Adopted Performance Marketing Strategy
Here are some of the adopted Performance Marketing Strategy:
1. Cost per Acquisition
In this scenario, the marketer need not pay the website or portal any money if no conversion has taken place. For example, if it is an invite for an event, the user must sign up or register for the event by paying money upfront. Or it could be a signing up for an email newsletter, downloading a pdf file and so on. The marketer is interested in paying only if data of the consumer is captured and a definitive web action takes place. These campaigns ensure that more visitors come to the website, more potential customers are acquired and also enables geographical targeting for the company.
2. Social media likes and followers
With more people getting hooked to social media, small and medium businesses are increasingly using social media for business promotion. Facebook allows you to get more likes for your page, or boost a particular post or put banner ads that will be shown only to targeted audiences. It’s cost-effective and boost campaigns start from just about a $0.60 per day and guarantee about 700 to 1000 reach while page likes can be boosted by paying more. FB lists the number of people who like a particular post and enables the marketer to request them to like your page too. Increasing page likes are useful for branding and getting more engaged with customers. Likewise, you can increase the followers on Twitter with paid campaigns.
3. Cost per sale
In this strategy, payment happens only when there is an actual sale done through the advertisement link. This is ideal for small businesses who can’t devote huge budgets for market promotion or branding. Small online businesses, small and medium research houses wanting to sell a survey or research reports, books etc.
4. Cost per impression (CPM)
Sometimes the objective of advertising on the web could be to have a mix of branding and actual sales conversion. In the CPM strategy, the rate is quoted per thousand impressions. An impression is a unit defined by a user seeing a page on the desktop, laptop or mobile devices and is no assurance of having read it.
On the other hand, a small percentage of those who have browsed the page are likely to click on the banner or text link and directed to a landing page where they perform a call-to-action which could be registering for a service, accepting the invite for an event or placing an inquiry or about filling a survey form. The CPM rates for sites would be higher if their conversion rates are seen to be higher. CPM strategy is good for branding whereby a banner or logo becomes visible to all the visitors to a page.
It is possible for marketers to purchase so many impressions for a particular duration and as soon as that much impression is generated for your Ad, the campaign stops.
5. Cost- per- Click (CPC)
Imagine a situation where the advertising is near a hundred percent result oriented- that is CPC for you. The website or the search engine (Google Adwords program) charges only for the clicks that may lead to your website, a landing page or a call-to-action such as a buy, register. The advantage of such a strategy is that if the cost per click is 10 pence, the marketer needs to pay only $10 for generating 100 clicks. You can purchase the number of clicks for a particular duration as in CPM campaign and it would end as soon as the target clicks are achieved.
Both CPM and CPC are flexible strategies quite suitable for small businesses with moderate budgets for market promotion.
The advantage of Performance Marketing Strategy is that it performs and does not just claim or guesstimate the impact of the campaign for the marketer and charge for it. Sometimes, it may not be a sales conversion but a good lead that can be pursued by the marketer.
6. Affiliate marketing
Finance, banking, research houses, stock, futures trading houses usually adopt a variation of the CPM, CPC strategy called Affiliate Marketing which is also result oriented. Here the publisher website is paid a commission for each lead generated or sales done as per a mutually agreed formula worked out by the advertiser and the publisher.
A forex trader may have a widget in a website that leads the visitor to its own homepage or landing page to register for an account in currency futures or forex spot market. In this case, simply clicking on the banner or widget or text and may not bring the desired result as the customer has to complete the registration routines and become a subscriber of the service. This is also a hundred percent result-oriented marketing and suitable for a variety of small and medium businesses.
How to make Performance Marketing Careers a success?
Performance marketing strategy may be suitable for certain kinds of business over others. Analysts point out that it is most suitable for online businesses whose offline promotional budgets will be low and most of the action happens online anyway.
For some reasons, the Performance Marketing strategy may be more suitable for service industries than manufacturing industries who have dedicated e-commerce sites, online shopping platforms to sell their wares.
Performance Marketing Careers doesn’t come free although it is cost effective as payment is made only when they’re in action on the part of the customer. In CPM advertising, the payment is made according to the audience size but that is no guarantee that sales conversion would happen in large numbers. The CPC option is more result oriented and quite costly too.
1. Have a good landing page
The effectiveness of both CPC and CPM would depend on the quality of the landing page and how user-friendly and compelling it is for the consumer to register, know more about the company and its products and even find an email id or helpline to connect easily.
It goes without saying that both marketing and web development, programming team with keyword skills should be working as a team to strategize on performance marketing careers. Positioning and targeting of CPC ads are very important. Sometimes, the best place to place a CPC campaign may be a blog that is discussing an issue relevant to our product or service. In Google Adwords, we can specify a set of keywords and the ad would only appear when visitors search for that set of keywords. But search engines charge more for popular keywords which may be charged up to $10 per click. It is through a bidding process that the actual rate for Google Adwords is arrived at.
2. Have an online marketing manager
Online advertising dynamics are much different from offline strategies and it makes eminent sense to hire an online marketing manager who will strategize on the Performance Marketing campaigns for the year, allocate budgets for CPM, CPC, Affiliate marketing, Cost-per-Action campaigns. They should also handle bidding for keywords in popular search engines, do constant monitoring and research into changing online marketing landscape, coordinate web development and marketing teams to ensure quality, consistency. They need to have business acumen and creative foresight to work on the web medium.
Ideal candidates would be MBA’s in marketing with additional qualification or exposure to information technology, web technology – HTML pages, social media marketing, Java, Search Engine Optimisation and so on. They should also use available tools to monitor traffic on the websites they are campaigning on.
3. Web directories don’t guarantee results
There are many popular web directories catering to the different industry or even general directories that cater to almost all major consumer categories or niche industries. The listings are organized into various categories such as garments, jewelry, laundry services, dance, fitness, health, hospitals, toys, educational books and so on. Most of them have a free listing and also paid listing services. Paid listing entitles you to pay upfront for six months or one year for getting top listing in a particular category.
But that is no guarantee for lead generation or conversion to business. Hence they don’t strictly fall into Performance Advertising. However, presence in web directories would, in the long run, help your brand, product or website to start appearing on top in search engine rankings for certain keywords depending on how much users share such links or pages.
4. Is the website mobile-friendly
With the increasing use of mobile phones for browsing the net, the success of any Performance Marketing careers would also depend on the mobile-friendliness of the websites, they should be simple and plain, enable vertical scrolling and easier to navigate. The number of visitors, page rank, Alexa rankings may not itself guarantee a good result on web advertising. It would also depend on how relevant your ad is to that audience. For an equity market broker, banner ads in finance or banking portals may yield more results than in a news portal with much more traffic.
Hence, the marketer needs to have the good grounding in assessing the quality of traffic to the sites, keyword strength and density, bidding strategies and creative enough to capture audience attention in a short span of time on the web.
The advantage of Performance Marketing strategy is that it is highly track-able, measurable and flexible when compared to traditional marketing methods. Based on campaign results – the number of impressions clicks received from different age groups, geographical regions, gender, and interest, marketers can further fine-tune its online promotion strategies for future that could also enable budgetary savings.
It is an innovative, creative, and result oriented method to reach a wide audience especially for small and medium enterprises with lower marketing budgets. They can also be made highly targeted and enable further consumer engagement through a database created from the campaigns.
For large companies, offline branding campaigns and online performance marketing strategy can be integrated to achieve better results. With the bigger budgets required for advertising in electronic media and print media, the online marketing that is more result oriented now holds charm for marketers.
With the growing popularity of online marketing, several players have emerged who guarantee clients an assured top page ranking in Google and other search engines or the certain number of leads or inquiries for the business. However, with changing algorithms in social media and search engine such claims should be taken with a pinch of salt and they should be properly assessed before any budgetary commitment is made. As in offline promotion, each penny counts and therefore, it is better for the marketer to do some homework and use the funds wisely.
This has been a guide to Performance Marketing Strategy. Here we discuss the basic concept with some of the adopted Performance Marketing Strategy: You may also look at the following articles to learn more –