Marketing has become more versatile and data-centric since the introduction of digital media. A 2018 report by Performance Marketing Association revealed that the industry was worth over $6 billion. The digital ad spend will likely exceed $600 billion by the end of 2022, and 1/3rd of that budget is dedicated to social media marketing. Hence, performance-based campaigns are incredibly popular right now.
Performance marketing is often used synonymously with digital marketing because the platforms for the latter provide measurement metrics for the former. However, not all digital marketing campaigns fulfill the criteria to qualify as performance-based campaigns.
This blog will briefly describe performance-based marketing and share the essentials of designing an effective campaign. Additionally, we explain why this method is beneficial.
What Is Performance-Based Marketing?
Performance-based marketing is goal-centric, where customers pay for outcomes rather than strategy. For example, if a client wants to increase customer visits to the website, they will pay for their actual clicks irrespective of the plan designed to achieve the result.
Hence, the objective achievement is critical for all performance-based strategies.
How to Create Performance-Based Campaigns?
Creating performance-based campaigns requires knowing about the digital advertising tools available for your usage. Additionally, you will need to incorporate specific details when structuring the strategy to increase your chances of success.
Following are the core steps you need to take:
1. Define Campaign Goal
Performance-based marketing focuses on specific business objectives. Adding a little of everything will make the campaign ineffective, and you’ll lose your money. Hence, you need to define a campaign goal or objective.
This goal will help your strategists find a direction for the campaign and content strategy. Following are some examples of objectives:
- Website Traffic
- Brand Awareness
- Lead Generation
- Customer Engagement
Each of the mentioned objectives has corresponding KPIs that will help you measure the results of the performance-based campaign. Sometimes, the purpose is self-evident. For example, a newly launched brand should ideally run awareness campaigns followed by website traffic and lead generation campaigns.
A brand struggling with revenue generation can offer discounts and run sales and lead generation campaigns. Focusing on improving customer relationships will result in customer engagement campaigns to increase consumer interaction with your brand.
2. Identify Performance Measurement Metrics
Defining performance metrics or KPIs is just as important as objectives because they help us measure a campaign’s success. Firstly, each of your goals has an associated KPI. Website traffic is measured with CPC, sales with CPA, awareness with reach, etc.
Hence, review the objectives and decide the relevant KPIs accordingly. Remember that achieving planned KPIs will require creating a sustainable strategy, related, relevant, and practical content, and more. So, you will need to adjust other factors for maximum productivity to make the strategy work.
3. Shortlist the Channels
Digital media has several channels for you to choose from, and you need to pick the most relevant ones for your brand. This knowledge will require an audience analysis to see where your customers are. YouTube, Facebook, Instagram, and TikTok are among the most popular social media applications.
However, you need to check which platforms your audience prefers the most and choose them for performance-based advertising. Search should always be a part of your strategy because it is always relevant and necessary.
4. Develop a Campaign Strategy
Once you have decided on the basics, you need to move on to designing the strategy. You can choose to distribute the campaign into phases or launch everything together. This step will also involve creating the content strategy for your campaign.
Remember that the platforms have unique user interfaces, native content dimensions, and formats. Hence, you will need to create a big idea that will act as the communication umbrella. Under this umbrella will be the marketing and content strategy for each platform.
Videos tend to have the highest engagement, but you can always review your insights and decide accordingly.
5. Create a Media Buying Strategy
Your digital media strategy has two aspects: the general marketing strategy and the media buying strategy. The media buying strategy determines the spending strategy on the search and social media ads to push the communication to the target audience.
The media buying strategy for performance-based campaigns includes the following factors:
- Ad frequency per viewer per day
- Ad space
- Channels for running the ads
- Time for the primary push of content
- Budget allocation for each channel
The more synchronized the media strategy is with the general marketing strategy, the better the results.
6. Actively Manage Your Social Media
Social media management is part of your performance-based campaigns and is critical to your campaign performance. Your social media management team will need to monitor each channel and observe the conversations happening.
They will need to use the brand’s voice to thank customers, interact with them, try resolving potential disputes, etc. This responsibility is especially relevant during campaign launches or focuses on engagement. Someone will always find an aspect to complain about, and your team will need to manage the negativity.
7. Track your KPIs
Lastly, tracking your KPIs allows you to have a clear picture of how your campaigns are performing and calculate your ROI. It doesn’t have to be done on complicated excel sheets. You can use a data analytics platform to help you automate your reporting and create dashboards for you or your customers.
Performance-Based Marketing Benefits
Performance-based marketing has risen in popularity because it delivers results. Following are some of the benefits that make this method a marketer favorite:
1. Objective Driven and Measurable
This marketing method follows specific objectives and targets measurable deliverables. Website visitors, conversions, reach, and engagement are all measurable values and make it easier to determine if the campaign was successful or not. These features also make it transparent, which is a bonus.
The general format of performance-based marketing makes it very ROI-centric. The data involvement means clients check how much value they gained per dollar spent.
Additionally, each platform mentions best practices, so one can usually tell why a particular ad could not meet its expected target. Hence, you’ll know what to correct.
3. Provides Valuable Marketing Insights
The best part about all data-centric marketing models is that they provide actionable insights. You’ll have exact data about consumer behavior against the money spent on ads, allowing you to get insights into ad performance.
These insights are precious. For example, they allow you to see how many viewers saw the complete video and how many dropped in the middle. Overall, these insights can provide more information about consumer preference, and you can use them to improve targeting next time.
4. Can Give Competitive Advantage
Lastly, performance-based marketing is a source of competitive advantage. Most paid ads help you outperform competitors, especially paid search ads. They will place your content on the first page, allowing viewers to see it before they check the remaining links.
Performance-based marketing is the ideal model for brands that want a more data-centric and objective-driven approach to marketing. Performance-based campaigns allow you to narrow down your communication to achieve a targeted goal and leverage paid ads to facilitate the strategy.
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