There is usually a goal associated with most advertising campaigns, such as increasing website traffic, getting more leads, or increasing conversions.
Optimizing campaigns for outcomes like these is easy with performance marketing. But, unfortunately, advertisers don’t pay for action that contributes to their goals, like traditional marketing.
In today’s digital world, it makes sense to include performance marketing in your overall advertising strategy. Let’s look at the five main reasons marketers should consider performance marketing and how they differ from traditional marketing.
Performance marketing vs. traditional advertising
Ad rates are often set regardless of results for many traditional advertising formats. A marketer, for instance, pays a bulk amount based on past readership when buying a print ad. Placement costs are determined by historical averages rather than by actual advertising results.
A performance marketing campaign, however, charges advertisers after placements show results. Generally, digital marketing campaigns that are easily measurable fall into this category. For example, a marketer advertising to increase web traffic might only pay advertising costs if they generate users for the website.
A cost-per-click campaign (CPC) or a cost-per-acquisition campaign (CPA) are types of digital marketing campaigns. Target action costs and goals for the campaign are set at the outset.
Why is performance marketing so valuable?
The performance tracking methods have evolved over the years along with advertising. Through digital channels such as display, email, and social media, marketers can track and optimize campaign results more quickly.
Performance-based marketing offers the following five advantages over traditional approaches:
Performance marketing campaigns can easily be budgeted because marketers must first decide their objectives and the ideal cost per action.
The proper campaign budget can be determined easily in this way. For example, if a marketer expects to spend $0.50 per click and wants to attract 10,000 website visitors, a $5,000 budget would be appropriate.
A further benefit of digital marketing is that goals are prioritized. Meaning every ad is tailored to fit the campaign’s objective, whether it is to increase viewable impressions, clicks, leads, or any other purpose.
Pay for results
Performance marketing is a great way to pay for results without incurring undefined costs—the importance of these increases for campaigns that drive conversions at the bottom of the funnel.
Setting a goal and sticking to it is an integral part of digital marketing. However, conversion-focused ads that switch to clicks after being optimized for conversions might underperform in both categories.
It’s important to note that some digital marketing channels might cost more than what marketers set as their target price. For example, the service will likely raise the costs if the user has a low conversion rate or a narrow audience and provides a $5 cost-per-conversion.
Performance marketing is predominantly digital, which offers marketers near-instant results and performance insights. The data includes the number of clicks, impressions, and conversions.
Marketers can use these metrics to determine their return on investment during campaigns. Campaigns that aren’t meeting expectations can be paused and budgets transferred to another drive.
Pivot in real-time
Particular advertisements are typically broken down on most platforms. As a result, marketers can improve their campaigns by responding directly to feedback from target audiences based on what each creative achieves.
Savvy marketers will use the headline in an ad with a high click-through rate to determine if they can further optimize the conversion rate. A campaign that responds to its performance over its lifetime can lead to better results within its budget.
Learn about the latest formats
Marketers can use a single channel like Twitter for advertising digital marketing, but they can also collaborate with performance marketing networks to expand their reach. Unique ad opportunities are available on these networks, providing new insights into placements based on audience data.
Marketing to audiences that are hard to reach, such as developers, is beneficial with performance marketing networks. They tend not to view display ads and may not be found on social media. One native performance campaign for Rollbar, for instance, resulted in two times as many clicks from developer audiences.
Performance marketing for your brand
It is no wonder product marketers are interested in performance marketing and all it has to offer. The advantages of performance marketing over traditional methods include being able to plan, only pay when results are achieved, track performance, respond to feedback, and discover new placement possibilities.
Performance marketing is no surprise given all of these perks.