Performance Marketing As An Approach To Boost Your Ad Campaigns

7 February 2023
Reading: 6 min

The field of affiliate marketing is developing so rapidly that we don’t have time to adopt new terms for familiar things into our vocabulary. For instance, this was the case with retargeting and remarketing, but we’ve figured out all the nuances. In this article, we will explore the concept of performance marketing in detail, learn how to apply it in practice, and unravel its relationship to affiliate marketing.

The essence of performance marketing

The great advertiser Leo Burnett once said, “Just make a good ad and money will come”. Yes, for the 1950s this model may have worked, but what do we have now? Not all advertising can make your business money. In addition, even the coolest advertising campaign makes no sense without careful analysis of the performance indicators. This is the approach behind performance marketing.

Performance Marketing As An Approach To Boost Your Ad Campaigns

As the name suggests, performance marketing emphasizes the effectiveness of the advertising campaign. It is a promotional strategy for achieving measurable financial results (KPIs) in a short period of time. It is a must-have for anyone who is wasting half their budget and has no idea why. Abstract metrics are forbidden in performance marketing — it is particularly useful in times of lost profits and crisis.

While large corporations may spend millions of dollars on branding, most companies need to focus on the bottom line to remain profitable. A performance marketing strategy is precisely used to drive action, track and measure that action, and determine the return on investment of each asset, campaign, or activity.

In performance marketing, all the tools work together for the sake of key business objectives. This is very similar to how omnichannel marketing works. However, in the performance approach, the focus is more on the permanent check of the promotion channels’ effectiveness rather than on finding a perfect combination of them once.

Historical nerd note:

Performance marketing was first launched during the advent of pay-per-click (PPC) advertising, starting with display advertising and Google AdWords (now Google Search Ads). Although performance marketing is often associated with pay-per-result, but the payment model does not determine whether something is performance marketing or not. As long as decisions about a campaign are made on the basis of measurable results, it can be considered performance marketing.

Is performance marketing the same as affiliate marketing?

This is not entirely true. Performance marketing may seem like affiliate marketing because they are both highly trackable, and you can make decisions based on performance. However, there is a difference. 

Affiliate marketing is essentially a particular subset of performance marketing because it is entirely driven by metrics and goals. In affiliate marketing, commissions are paid for the online promotion of an advertiser’s product or service. An affiliate marketer places advertisements in order to attract traffic, clicks, and sales to the merchant’s website. The affiliate receives payment only for actions such as clicks, conversions, or leads. Performance marketing simply structures this process and puts out more specific strict numerical metrics that the affiliate is required to follow at various stages of the campaign’s existence.

Performance Marketing As An Approach To Boost Your Ad Campaigns

Instructions for use of performance marketing

The process of implementing performance marketing consists of several basic steps. You are probably already familiar with many of these points, but trust us, when you clearly record all the metrics on each of them, you will see where your advertising budget is going and identify weak spots of control.

Step 1 — Thorough preparation

This includes in-depth data analysis. At the start, it is important to analyse all the company’s business indicators, competitors, and the market, and consider the pros and cons of the products. It is necessary to study the target audience, the top of the list by topic, the semantic core, and the effectiveness of all traffic sources. In-depth analytics should be present at every stage of the work — this allows you to monitor the effectiveness of the money invested.

Step 2 — Building the direction

This is a step in goal-setting. After analysis, you will understand the current position of the company or product in the market in relation to the competitors. Then you can build a specific target for the advertising campaign and clearly describe what you want to achieve at the end of it. This may be an increase in sales, average receipt, LTV, or ROI. Editor’s tip — use the SMART approach to formulate your goals. 

Step 3 — Strategic planning

Once you have decided on a goal, your plan should include the steps to achieve it, which will line up into a coherent strategy. This includes selecting the most effective advertising tools and channels for your target audience and product. This is also where you determine your preferred payment model. Through regular audits, effective techniques are adjusted, and unprofitable tools are replaced by new ones with predictable results.

Step 4 — Media plan creation

This is where you research market trends, vertical tendencies, and GEO features and make the most appropriate creatives for your goals. You should also approve the right content formats and visuals for all selected communication channels in advance. Plan the date, time, and cost of advertising for each.

Step 5 — Plan for analytics

In order to analyse the performance of each individual campaign and of your marketing strategy as a whole, set the metrics you will track and consider how and where you will collect the statistics. The built-in tools in your affiliate network’s personal account may be enough, although many affiliates like to integrate alternative and more extensive analytics programs.

Step 6 — Strategy optimization

Evaluate the effectiveness of your strategy. Track the metrics for each campaign, analyse the results, and draw conclusions. Based on this analysis, you will identify the main mistakes and their causes to avoid inefficient tactics in the future.

Final thoughts

You are on a roll when you know exactly what is going on in your marketing campaign and why you are getting one result or another. To have better results, consider the strategy of performance marketing. It’s similar to affiliate marketing but different in its obsession with constantly analysing the numerical results of your actions. You don’t need to change the way you work fundamentally, just use the steps to integrate the performance approach when you launch your next campaign. You’ll see — done correctly, this approach will boost your ROI.

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