Content
- What is performance marketing?
- Features of performance marketing
- Clear goals in performance marketing
- Technologies and analysis
- Pay for results
What is performance marketing?
Performance marketing is a marketing strategy aimed at achieving clearly defined and measurable results, as well as financial metrics. This concept allows businesses to view marketing activities as a source of profit, implying the ability to assess the effectiveness of advertising campaigns in monetary terms. The main focus is on identifying the most profitable channels for attracting customers and determining the tools that are most effective for the business in real time.
In this process, specialists use a strict mathematical approach: they formulate clear and measurable goals, analyze real data, and compare results. Therefore, the most appropriate synonym for performance marketing is results-oriented marketing, which emphasizes its focus on achieving tangible outcomes.
Features of performance marketing
Performance marketing has several key features that make it particularly effective:
- Measurability: Each promotion channel is evaluated according to specific business metrics. When metrics are linked to finances, such as sales or customer acquisition cost, they become part of the performance marketing approach.
- Relevance: Advertising campaigns and strategies in performance marketing can be adjusted in real time. This allows for consideration not only of advertising effectiveness but also external factors such as economic conditions or competitor actions.
- Clear goals: In performance marketing, goals must always be measurable, realistic, and time-bound. For example, increasing the conversion rate by 15% within a specific period or reducing customer acquisition cost by 10% over three months.
Technologies and analysis
To assess the impact of online advertising on offline sales, many companies use modern end-to-end analytics systems. These technologies help marketers understand which promotion channels had the greatest influence on a customer's purchasing decision. For example, if a user saw an advertisement for a smartphone online, compared offers, and then purchased it in-store, end-to-end analytics records all customer touchpoints with the product.
If 20 users visit a website but only 2 make a purchase, this may indicate issues with the payment form or deal conditions. In such cases, it's important to analyze the reasons for drop-offs and make necessary changes to improve conversion.
Pay for results
Agencies engaged in performance marketing often set specific measurable KPIs and charge based on achieved results. However, there are companies in the market that use the term "performance marketing" to inflate prices for their services. Understanding the true principles of performance marketing will help clients recognize such tactics and make informed choices when collaborating with marketing agencies.