4 reasons to prioritise performance marketing
There are several good reasons to choose performance marketing. Here are four of them.
Performance marketing is a result-based and measurable marketing. Other forms of marketing have also been measured for some time, but the impact of these methods hasn’t always been clear. Performance marketing puts result in the driver’s seat. So, what exactly makes it so effective?
1. The results are measurable
Performance marketing wouldn’t be possible without digital tools. These makes it easy to measure results from a campaign. There are several ways of analyzing your results, and what you measure depends on the goal of your campaign.
Do you want your brand, website, or advertisement to be seen by more people? Then you need to count the number of impressions. The quantity of clicks isn’t recorded here, but reaching a larger audience increases the likelihood of people exploring your website.
Admittedly, impressions don’t tell us how many people have clicked on your ad. Do you want more visits to your website? Then it’s the number of clicks you need to measure.
Even more precise measurements are possible. The goal determines how precise you should be. A website visit doesn’t necessarily end in a purchase. If that’s your main goal, you need to count how many people click on an item, click “buy,” fill out a contact form, or actually complete a purchase.
2. You can adjust the campaigns along the way
Performance marketing has a significant focus on results. But it’s just as important to adapt to the results. Throughout the process, adjustments may be necessary in terms of messaging, approach, channels, objectives, or target audience. It’s important to be flexible.
You can discover elements that should be adjusted through the analysis. As mentioned, a visit doesn’t always lead to a sale. Maybe a customer clicks on your link or ad, but ends up on a landing page that doesn’t explain well enough what the product is about? Or a landing page that doesn’t make it clear how you can buy the product?
Then it’s important to adjust the ads along the way. This way, the campaign becomes more effective and targeted, and you can achieve your goals more easily. What’s more, you don’t waste time and money on something that doesn’t work.
3. It’s cost-effective
Performance marketing costs less than a traditional marketing campaign. There are several reasons for this. One reason is that everything is cheaper online – this also applies to marketing.
Even more important is that you have better control over where your money goes. Performance marketing campaigns have clear objectives linked to costs and budgets. You can decide how much you are willing to pay for a click.
Read more about different goals below:
CPC (cost per click)
CPC stands for “cost per click”. With CPC, you pay every time someone clicks on your ad. The price per click depends on the competition for that search term. This is decided through a bidding round.
This model is cost-effective because you only pay per impression from someone who is likely to be interested. A click indicates interest. At the same time, you get “free” visibility with the purchase. For example, search campaigns through Google Ads are CPC-based. Image ads on websites, on the other hand, are CPM-based.
CPM (cost per mille)
CPM stands for “cost per mille”, or cost per thousand. This is the price per thousand impressions. You state how much you are willing to pay for a thousand views. You then pay each time the ad is visible.
What does “visibility” mean? Google defines this as at least 50 % of the ad being visible for at least one second, or a video ad playing continuously for two seconds. In other words, you don’t have to pay if someone quickly scrolls past your ad.
CPA (cost per acquisition)
The aim of both CPM and CPC is to get as low a CPA, or “cost per acquisition”, as possible. CPA measures all kinds of conversions — purchases, contact forms, and registrations. CPA goes by several names, which confusingly use many of the same abbreviations. CPA can also be called CPL (“cost per lead”), CPC/CPCon (“cost per conversion”), or CPA (“cost per action”).
When you create a campaign, such as a Google Ads campaign, you first set a target for how much you are willing to pay per conversion. If you sell sneakers for 60 USD, the price per conversion should be at least lower than this – preferably much lower. This goal will affect how much you pay per click or per thousand impressions.
4. The campaigns can be aimed at specific target groups
Performance marketing is particularly effective because you can reach your target group specifically. You can also divide the target group into several different segments. Maybe you’re trying to reach people in a specific area, but you have messages tailored to various age groups. Or multiple services offered to multiple businesses in the same region?
Then performance marketing is the right tool to achieve this. You can easily decide which part of the target group will see your ad. This can be done whether you use Facebook advertising or advertising in search engines.
In other words, there are several good reasons to choose performance marketing. You get measurable results, you have the opportunity to adapt along the way, it’s cost-effective and you reach your target group with the right message at the right time. This is why performance marketing beats traditional marketing.
Does your company need help with performance marketing?
Then we can help you. Journey Agency offers a full range of services within digital marketing. We can help you to:
- Build an online store that ensures good customer experiences
- Make your online store visible through performance marketing
- Develop the campaigns and the online store further over time
Get in touch today if you need help with performance marketing.