Performance Marketing: Understand The Concept

Investing in advertising and producing good campaigns are important attitudes for the success of a business. But do you know how to optimize these resources and ensure more accurate actions? Performance marketing is the way!

This digital marketing strategy is focused on results. After all, you pay according to the performance of each advertisement and also get valuable data on the behavior of potential customers.

Do you want to understand the concept of performance marketing better and learn how to put the strategy into practice? Continue reading and learn everything about it.

Understand What Performance Marketing Is

Performance marketing is digital advertising, where you pay according to the ad’s performance. This is a strategy that must be included in good campaign management.

To make a comparison, imagine a campaign shown on TV. Broadcasters have an audience estimate for each airtime, and whoever buys the space pays for all those viewers.

But in practice, ensuring your target audience watched the ad is hard. This is because the television audience is measured by sampling, and only 0.008% of households are monitored.

Furthermore, it is impossible to know how often the same customer saw the advertisement or if he made a purchase because of the TV advertisement.

See The Benefits Of Performance Marketing

The biggest advantage of performance marketing is that you can do more with less. That’s simple! After all, you pay for the result. For example, if the campaign’s objective is to generate website traffic, you will only pay if users perform the proposed action.

In other words, the investment is made based on the actual performance of the campaigns and not on estimates of the audience reached, as with billboards, magazines, radio stations, etc. All actions are designed so that the budget is used best.

See the main advantages of investing in this type of campaign.

Measurable Result

Returning to the TV example, you understood that measuring the efficiency of actions is difficult through this channel. The same rule applies to advertising on radio, newspapers, magazines, and other offline media.

In digital marketing, obtaining exact numbers and tracking the path the customer takes before and after interacting with an ad is possible. For example, it is possible to know if a specific consumer clicked on the advertisement, entered the site, placed an item in the cart, but later abandoned it, among other actions.

Understanding Of Customer Behavior

With the digitization of the customer journey, it is possible to obtain valuable data on interests, habits, and behavior. With this information in hand, creating content for your audience is easier to improve the customer experience. Thus, the sensation conveyed is that that product or service was made to measure. That’s what converts are.

Real-time Performance Tracking

Monitoring a campaign’s performance in real-time and interrupting it whenever you want is also a significant advantage.

This is because if performance is unsatisfactory, you can pause and make adjustments to adapt the ad to the business objective. This possibility ensures more efficient campaigns and better use of marketing resources.

Low Risk

You don’t have to make a huge investment right away. Taking smaller actions and scaling the budget according to the results obtained is possible. Thus, your company does not risk wasting money on strategies that will not work.

More Accurate Campaigns

Performance-focused campaigns incorporate data-driven marketing tactics, where data drive all decisions. Analyzing all information about the client and the market generates inputs to optimize campaigns and serve each user in a personalized way.

Reach New Audiences

Creating highly targeted campaigns is an indisputable benefit. With this strategy, you can use different filters to test new audiences, align segmentation with the brand’s objectives and increase the reach of your actions.

Also Read: Marketing Ops: What Is It, And What Are The Benefits For Your Business?

Know The Types Of Performance Media

Performance media are paid advertising channels that consume the budget based on user actions. Discover the tools most used in this strategy.

Google Ads

This is Google’s ad platform and the most used tool in performance marketing. This is because it allows the creation of highly targeted campaigns in different formats, which will be displayed in search results, Google Shopping, display networks, apps, and YouTube.

You are the one who configures how the budget will be consumed. Depending on the campaign, you can choose between:

  • CPM (cost per thousand impressions): the pricing is according to the number of times the ad was seen;
  • CPC (cost per click): Payment is based on the number of users who clicked on the ad;
  • CPA (Cost Per Acquisition): You only pay if the campaign reaches its ultimate goal. It could be converting a sale, filling out a form on a Landing Page, downloading an app, etc.

Demand Side Platform (DSP)

DSPs are programmatic media tools that automate the purchase of advertising space on the web. Through specific software, it is possible to connect those who want to buy media — or inventories — with publishers, that is, those with these spaces to sell.

Inventory value is determined from an auction. The advertiser that bids the highest for a given medium wins and starts running the ad in the space. All of this is done automatically and in real time. The platform also has a very precise segmentation.

Facebook Ads

This is Facebook’s paid ad system. Through the platform, you can also create and manage extremely targeted campaigns.

This is because the social network uses user profile data, interests, and behavior to show the right content to the right people.

If you only want to target men aged between 50 and 60, who are widowed and who have recently traveled abroad, for example, it is possible.

When configuring the campaign, you choose between the objectives:

  • Brand recognition;
  • Range;
  • Traffic;
  • Involvement;
  • Application installation;
  • Video previews;
  • Generation of registers;
  • Messages;
  • Conversions;
  • Catalog sales;
  • Traffic on the property.

Billing works similarly to Google Adwords: impressions or link clicks. In the case of video ads, there is also the cost per Thru Play, which represents the number of times users played the media for at least 15 seconds.

Instagram For Business

This is the business-oriented version of the application, which allows you to track specific metrics from the social network, such as the amount of content saved, profile visits, followers, etc.

Although having a company account on Instagram to run ads there in the business alternative is optional, maintaining a corporate profile is interesting. To set up a campaign on the social image network, the tool used is the same as on Facebook: the Ads Manager.

Then, you can use the targeting filters and choose from the formats and locations where your ad will appear. Payment is also made according to views or conversions.

Also Read: How To Improve Your Agency Marketing With Data-Driven

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