What is performance marketing and what’s the difference from digital marketing?
Based on my previous job experiences, performance marketing is just an add-on task as a digital marketer in any company. But the larger company (an established one) usually have a different person to handle this task.
What is Performance Marketing?
Performance Marketing is as it sounds – marketing based on performance. This performance can be an order of executed desired results, such as a completed lead, sale, booking, or download.
A full-term, Performance Marketing is a combination of paid advertising and brand marketing put together but only paid out once the completed desired action takes place.
Then what is the difference with digital marketing? And why some companies prefer to ask for a specific person and experience to handle this task?
Digital marketing refers to advertising delivered through digital channels such as search engines, websites, social media, email, mobile apps, and anything that you do within the digital space.
Performance marketing puts the control back in the abilities of the marketer.
The difference between performance marketing and digital marketing is performance marketing concentrates on outcomes that generate real results – such as leads, conversions, and sales. Digital marketing is more general in that it includes performance marketing but also includes reach, branding, and awareness on digital platforms.
An experienced digital marketer, for example, may have experience in all of these exercises (lead, conversions, reach, branding, etc) where a performance marketer may have more of a focus on lead generation and driving conversions
What are the Benefits of Performance Marketing?
There are many benefits of performance marketing, including:
- Easy-to-track performance
- Low risk
The main benefit of performance marketing is that it’s 100% measurable. Thanks to advanced ad platforms, all your campaign metrics are tracked and reported for your comfort.
In addition to better tracking, performance marketing is ROI-focused, which means less risk for your company. With less risk, it’s more convenient for your marketing team to expand your strategy and campaign.
Its objective was to drive a specific action and only paid when that action was completed. This was in contradiction to brand advertising where the purpose was to build awareness and payment was typically based on impressions or awareness metrics.
Qualifications for Performance Marketing:
The intention of the campaign is to drive consumer action, as opposed to raising awareness. The cause and effect of marketing and consumer action can be clearly measured. The closer the performance action is to a transaction, the more liable is the outcome.
The most important component of a performance marketing campaign is the performance action that is being measured, optimized, and likely monetized. The closer that consumer action is to the sale or final transaction, the more likely it can be used to calculate your campaign ROI.
Basically, I used to list down the answers to this question below to handle performance marketing:
- Choose your intention: What do you want your audience to do?
Performance marketing is like buying Ad media and you pay only when your customers react to it. The reaction could be a view (impression), click, engagement, lead, or sale. This makes Performance marketing more answerable for your campaign. You can measure what is working and what is not. Which channel and which type of customer persona is reacting to your ad campaign and where it can give you better ROI.
- Uncover the journey: At which stage of the customer journey, you want to target your customer? You need to be reasonable and smart (data-based) at which ad media you’re spending.
- Impressions and Clicks -> Awareness stage
- Engagement -> Interest stage
- Leads -> Desire stage
- Sale -> Action stage
Next, when you’ve decided on which stage do you want to pay, next is to resolve the best Ad media to buy.
- Identify the Play Space: Where does your target audience exist?
After clearly identifying your customer persona’s digital activities, you’ll find two types of the channel where you can put your Ads.
- Social: Where they are socially active. Facebook, LinkedIn, Twitter, Instagram, Snapchat, or TikTok.
- Digital: Where they are digitally active. Blogs, shopping websites, or E-Commerce websites.
- Investigate benchmark metrics: Since it’s going to cost you money (and maybe tears or even blood), which channel will give you the best result?
You need to limit the standard industry metrics of these channels for your reactions. Different Content, different channels, different audiences, different results. There’s always room to evaluate, develop, and grow.
- Sharpen your strategy: I have a few tips and tricks to get the maximum results from your performance marketing:
- Go Creative on your Ad. Choose relevant creative for your Ad that communicates your landing page message. Select peculiar ad composition: Video, Static text, Carousel Ad relevant to your Ad. Being creative doesn’t mean you have to put a big budget on this. Sometimes being simple and minimal is the best move to do.
- Segment and Deep-link your Ads. If you wish to showcase an Ad for a particular channel, hyperlink this to that particular channel rather than hyperlinking to all channels. This benefits in clear navigation for the customers. Keep separate ad groups for location-based keywords, exact match, broad match, broad match modifier.
- Limit your audience and A/B testing.
- Choose a relevant audience persona.
- Consider proper age group, limit on locations, and interests.
- A/B test on a single parameter: change age group in one ad, change interest in another ad but never change two parameters for the same ad.
- Re-targeting and Re-marketing. After an audience visits your website and clicks on some products, then takes certain actions, the cookies that have been set on their browser will provide information that you can use to retarget them. You can do this by displaying advertisements on interactions that happen or when they are about to leave your website. Remarketing can be personalized to fit the preferences and needs of each user or to specific customer segments. This can be done through the use of dynamic ads, which automatically adapt content and promotions specifically to each user and ensure they are exposed to the most relevant Ads.
However, I believe many companies or marketing managers are wondering how it differs from digital marketing tasks. It’s not a digital marketing segment, like personalized marketing, but a whole new approach to online marketing.
All marketing is basically a performance marketing. There is a specific goal for every marketing activity. It might be brand awareness. It might be increased sales. But, every marketing campaign has a specific purpose. As before-mentioned, all marketing is performance marketing.