< Blogs

Performance Marketing in 2022

What is Performance Marketing?

Performance marketing allows advertisers to achieve ROI-driven goals like driving sales or clicks.

One key factor that highlights performance marketing from other marketing types is that you pay only for the desired specific result: such as a transaction, lead or click.

So you only pay for what you get. It brings us to one common question among businesses.

Performance Marketing in 2022

The answer lies in the end result of your marketing campaign.

Although performance marketing and digital marketing channels overlap each other, their ad campaign goals often differ.

Digital marketing usually strives to increase metrics like reach, likes, followers. These metrics are good to build brand awareness but may not drive an actual sale. On the other hand, performance marketing focuses on driving revenue and generating high-intent leads.

That is the fundamental difference between digital marketing and performance marketing.

Performance marketing focuses more on the way you pay and get results for your campaign. So it works accordingly.

You can choose a payment model based on your marketing needs.

Here are the most common performance marketing payment models:

  • Pay per conversion/acquisition: Pay only for the conversion/sale generated by your ad campaign
  • Pay per leads: Pay on the leads, inquiries you receive from your ad
  • Pay per installs: Pay on the app installs that happened directly due to your ad
  • Pay per click: Pay on the clicks on your ad that lead the audience to your landing page

Based on the payment model, you can run ad campaigns on various performance marketing channels. Let us delve into that.

Types of Performance Marketing

1. Affiliate Performance Marketing

Affiliate marketing is one of the oldest forms of performance marketing where the affiliate earns by promoting brand products and services. Usually, the affiliate offers the brand a space in their web page, or social posts to drive traffic to the brand’s website.

The affiliate marketing performance and payout depend on conversion, clicks and leads. Major e-commerce players like Flipkart, Amazon, eBay run Affiliate programs.

Affiliate Performance Marketing
SEM Performance Marketing

2. Search engine marketing (SEM)
Performance Marketing

SEM lets your business appear on top of the search results. It is a part of your pull marketing strategy where people search about your products and services. These search keywords trigger your brand's sponsored listing in the search results. Search ads work great for products with a short sales cycle. Search engine marketing includes search ads, mobile marketing, search retargeting and site remarketing. You can choose a payment model of PPC (pay-per-click), CPC (cost-per-click), CPM (cost-per-thousand impressions).

The most popular platforms to do search engine marketing are Google Ad Words and Bing Ads.

3. Native Performance Advertising

Native advertising lets you create and place ads on web pages such that the ads look like an extension of the web page content. As a result, native ads almost do not look like ads.

They appear as sponsored posts native to the web page. They are a great way to target your audience in a contextual and unobstructed way. Key metrics that native ads support in doing performance marketing include CPA (cost-per-acquisition), CPC (cost-per-click), CPM (cost-per-thousand impressions).

The most popular platforms to do native advertising include Outbrain, Taboola, TripleLift

Native Performance Advertising

A native ad in the tech section of a news site

Display Ads Performance Marketing

Display ad banners on a news website

4. Display Ads Performance Marketing

Display ads are a subset of your SEM efforts. You can place banner ads on partner sites of your publisher. For instance, through Google Display Network, your ads can reach 2 million websites.

Display ads follow a push marketing strategy. For instance, you can push a shoe brand ad in an article about shoes. Thus you can reach people who are already interested in your products and display your products before they even start searching for what you offer. Display ads work great for remarketing to your website visitors and for increasing brand awareness.

Display ads support a variety of content formats, such as text, banner, image, rich media, interactive and video ads. Similar to search ads, for display too, you can choose a payment model of PPC (pay-per-click), CPC (cost-per-click), CPM (cost-per-thousand impressions).

The most popular platforms to do display ads are Google Ad Words and Bing Ads.

Learn more about display advertising here.

5. Social Media Performance Advertising

This entails advertising on major social media platforms like Facebook, Instagram, LinkedIn, Twitter and more. You can increase your ROAS by building relationships with potential customers across your marketing funnel.

Every social media channel comes with a unique offering. Align your business goal with those offerings. A successful social media marketing campaign will take into account a comprehensive cross-channel social media strategy.

Important measurable metrics in social media marketing include unique reach, clicks, engagement, likes and conversions.

Social Media Performance Advertising

A Facebook ad

The principal benefit is that you pay only for what you get. Other key benefits that come with doing performance marketing from an automated marketing platform include:

  • Track and measure campaign results from across channels
  • Automate audience targeting to reach high intent buyers
  • Optimize campaigns automatically to increase conversions
  • Reduce wasted ad spend and run cost-effective campaigns
  • Optimize bidding and targeting
  • Set budget based on pre-estimated results
  • Run full-funnel ads across channels from one place

As you see, all the benefits focus on bringing you business from ads.

Alright, so far, we have learned what performance marketing is, why we should do it, and the channels through which we can do it.

Now let us learn about how to do performance marketing in a smarter way.

Add value to your performance marketing experience.

1. Use data from one channel to other

Apply learnings from a campaign on one channel to a campaign on a different channel. For example, the Search report in AdWords can help you determine what people are searching for on Google Search. You can use the performing keywords while building campaigns on other platforms. Thus you apply one channel’s findings to another.

2. Do not classify channels by the funnel stage

Generally, e-commerce sites like Flipkart are called low funnel stage channels - where the customer is more likely to buy a product than learn about the product. On the other hand, a brand’s website is considered a relatively higher funnel channel where people first get acquainted with your product.

However, there have been times when people first discover a product through adverts on sites like Flipkart. They later search for those same products on Google by ‘product name + Flipkart’. Eventually, they end up landing on the product’s official website to make a purchase.
As we see, Flipkart worked more like a top of funnel channel by helping the customer discover the product.
It shows us that we cannot categorize channels by a funnel stage. It also points out that we can build a full-funnel strategy within a single channel itself.

3. Create short-term and long-term goals

If you do not target people who can be new to your marketing funnel, you will run out of people searching for your product. So as part of your long-term strategy, you need to keep on building your marketing funnel as you focus on your short-term business goals.

An example is of people who know you, search for your brand term. However, you have to capitalize on the non-branded search terms to find new prospects who will enter your funnel.

4. Ensure goals add business value

Performance marketing is all about adding value. Rather than focusing on vanity metrics that most digital marketing strategies focus on, you have to determine what metrics add value to your business. It is not necessarily just about sales. It can also be about building brand awareness which will in the long term contribute to your sale.

5. Understand channel synergies

You need to adopt a sort of an independent system to track and measure results from your campaigns. It is because different channels have their own measuring systems. While collating data across channels, one often misses out on critical insights. It is where an independent, unified view system can help. Such systems can adopt algorithm attribution to give you cross-channel insights.

6. Experimentation

Businesses need to take a data-driven approach. Brands make a common mistake of thinking they know about their customers. In reality, customers behave much differently. Shoppers do not often even realize why they make the choices they make...

While running an experiment like the A/B test, you might find out otherwise how customers behave so differently. It is best to conduct A/B tests rather than relying on intuition. For example, let us say you might want to compare two Facebook ad campaigns with each other.

So you first decide upon your campaign goal - such as increasing conversion rate or downloads. Then for A/B testing, you need to limit your test variables. So you might run two ads under one ad set directed to your best audience. You can select two different images or call-to-actions or maybe use two captions for each of the campaigns. Once the campaign gathers pace, you can determine what is working and what is not. You then optimize your campaigns further by using the variables that are working.

7. Align your marketing goals with your marketing budget

Media planners often get paid more than their flat rates only to publish the ad campaign. In return, they deliver the vanity metrics that we talked about earlier that do not help the business much. So it is critical to align your campaign goals with your marketing budget.

Now, programmatic advertising powers performance marketing. Automated bidding strategies and keyword optimization are available for channels like Google Display and Search ads. These reduce your cost per acquisition or cost per lead, improving ROAS for Google ads.

With Mediaqart, you can take a data-driven approach to run performance marketing digital ads.

  • You get to select highly targeted ready campaigns audiences for your product or service. They can be the ones who are more likely to respond to your ad.
  • You get to know the kind of results your campaign can fetch even before you start one. It helps you make informed decisions about your budgeting and defining marketing goals.
  • Get a unified view of campaign performance reports from across channels in real-time.
  • Optimize campaigns automatically across channels.

While performance-based advertising is one of the most effective promotion techniques, pair it with other forms of marketing to achieve maximum results. Combining paid advertising with organic efforts is a good marketing strategy.

What are your views on performance marketing in 2022? Let us know in the comments.