Performance marketing for real measurement of one’s potential


What is the Performance Marketing Approach? What are its goals? How is the way of doing business changing? Let's answer these questions together.

Rational management of costs and measurement of one’s actions: performance marketing as pure targeting and “reasoned gambling.” Defining it uniquely is not easy, because it is a series of strategies, best practices and activities that are constantly being updated and refined: performance marketing is an approach based, as the name implies, on results (or performance).

The major difference from classic marketing, or other types of approaches, lies in the location of the budget: in classic strategies, in fact, against an initial, allocated and reasoned expenditure, specific actions are taken that are part of the budget, for which specific returns are planned in line with said budget.

In performance marketing, the plan of action works in the opposite way; campaigns (digital, but not only) are launched, and their results are measured. Based on these, campaigns, designed on the target audience, are constantly optimized, monitored again and implemented. Fundamental then becomes content marketing: measurements and performance depend on the proposed content, which is the most powerful means to achieve one’s goals.

performance marketing

One strategy, many metrics, differentiated costs

The Data: the most valuable resource of this century.

Any digital information from collection tools (among many, Google Analytics) is data; it can be quantitative, activity reports, audience biographics, or simple performance metrics – the ones we are talking about now. What we need to understand, as a first move, is what data we need for the purposes of optimizing our business.

In the ongoing process of optimizing one’s performance, there are metrics we cannot ignore. Among the most important we have:

  • Click-through rate – by monitoring clicks on a CTA or a specific link we have two very important info: effectiveness of our campaigns and origin of clicks, which will help us define our audience in an increasingly clean way;
  • Conversion rate – by measuring pre-set conversions (signups, downloads, newsletters, payments) we can define the type of payment most in line with our targets (as we will see later),
  • Lifetime value – more of a secondary definition, it gives us an impression of a user’s expected spend based on their interaction on the site. Keeping it tracked helps practitioners not only define strategy performance, but more importantly make more targeted ROI counts;
  • Social metrics – also often called Vanity metrics, they include likes, followers, comments, shares; they are not among the most effective tools for measuring performance, but monitoring and analyzing some of these indicators helps to improve the relationship with one’s audience and sentiment related to the brand.

Based on the performance of the campaigns, different payment methods can then be evaluated, again based on the performance itself:

  • Cost per click – payments are based on the number of clicks on the ADV, great for pushing traffic to the site;
  • Cost per impression – basically, payment is tied to impression, i.e., the viewing of the content;
  • Cost per sales – payment is contingent on the sale that comes through an ADV;
  • Cost per leads – as well as CPS, here the conversion signal is tied to a subscription or non-commercial event but generating leads;
  • Cost per acquisition – even more generic version of CPS and CPL, where payment follows any transaction set as a target.

data trends analysis

Performance marketing, the real deal: benefits for the SME

With a view to the future of digital marketing and content marketing, working following a performance-based strategy is definitely among the most profitable directions for a company.

Beyond the lack of large preventive budgets on campaigns, and thus rationalized and results-based spending, there are several interesting benefits to consider.

Since this is an ROI-focused approach, every single action has its own positive impact (hopefully) on the bottom line of one’s business, with a significantly lower rate of risk than classical methodologies. Generating then masses of data (big or small) is an additional value for the company, which will be able to profile itself even better as a data-driven reality, with all the relevant advantages. Campaigns, in this way, will be easier to track, and any intervention and optimization will not be lost in a stream of inconclusive assumptions and tests.

Some best practices:

  1. Always set a goal: Only in this way can you be sure that you are moving toward a concrete direction and not risk losing in costs;
  2. Design appropriate KPIs: try to follow indicators that are consistent with your business strategy;
  3. Work creatively on campaigns: do not indulge in quick or simple solutions, but always create original and performing content;
  4. Constant measurement: since you have to rely on your own activities, do not forget to always keep performance monitored, with the help of effective tools or appropriate consultancy;
  5. Continuous benchmarking: taking a cue from competitors and monitoring their performance is not a bad practice. Setting yourself the goal of someone else can become one.