To scale your business and maximise the returns on investment, you need performance marketing strategies – a highly targeted result-driven approach that allows you to expand the reach, optimize the budget and gain traction among businesses. Gone are the days when you just needed a solid product and basic marketing tactics.
In this blog, we will explore what is performance marketing, the key components of performance marketing and steps to scale your business with performance marketing.
What is Performance Marketing?
It is a data-driven marketing strategy, where the advertisers pay for actions such as – clicks, conversions, and sales rather than general exposure. Unlike traditional marketing which relies on upfront payment, performance marketing allows the payment to be based on results only.
Key Components of Performance Marketing
- Affiliate Marketing: You might have seen videos, where a content creator promotes a particular product or feature by telling you that you get a discount when you go through their channels. This is nothing but affiliate marketing, where the affiliates earn a commission only when they drive a conversion (sales).
- Search Engine Marketing: It is also known as Pay-Per-Click (PPC) where the advertisement is carried on search engines like Google, Bing, Yahoo etc. By bidding on relevant keywords, businesses can drive targeted traffic to their websites/channels. This is a powerful way to capture high-intent customers
- Social Media Advertising: Platforms like Facebook, and Instagram help businesses reach target demographics and interests, creating tailored messages to connect to the specific group. When the consumers that were predisposed from the start find value when seeing the ad, it drives sales or other conversion meters.
- Display Advertising: You might have seen when scrolling social media platforms or when reading a blog, certain display ads in the form of banner images and video content are displayed at opposite ends. This is nothing but display advertising campaigns that help the brand increase its visibility.
Steps to Scale Your Business with Performance Marketing
- Set Clear Goals – Be clear about your objectives – whether it is for brand awareness, lead generation or sales. When you are clear about your goals, the strategies formulated will incline towards those goals.
- Choose the Right Channels – Identify the platforms where your target audience spends most of their time. Ex: if it’s a manufacturing company and you are selling industry machines, then Google or other search engines will be the right platform for your business.
- Target the Right Audience- Use analytics tools to narrow your audience based on demographics, psychographics, geography, and interest. Then target that particular segment. The likelihood of conversion will increase.
- Optimize for Conversion- Work on your landing page based on the data from analytics tools. Also improve your CTA, and ad visuals accordingly.
- Retargeting- Show the ads or retarget the users who have visited your site/landing page but didn’t convert. This increases the likelihood of conversion and sales.
- Monitor Performance: As previously mentioned keep monitoring your campaigns to identify areas of improvement. By keeping track of what’s working, you can optimize campaigns for even better results.
- Scale Winning Campaigns: Once you identify the high-performing campaigns, invest more by increasing your budget gradually. Also change your strategies to boost reach.
Benefits of Performance Marketing:
Once you are clear on your campaign goals, the audience you want to target, the channel/medium that you will use, and analysing the performance and making changes accordingly, then you will start bearing results like:
- More conversions of the specified targeted segment
- Only paying for the conversion metric set by you – could be clicks, set number of impressions, leads etc.
- Every click, sign-ups will be tracked, helping you understand your ROI
- Expands the business by improving visibility and ultimately scalability.
How to Measure the Success of Your Performance Marketing Campaign:
- Click-Through Rate (CTR) – Shows how many users clicked on your ad after seeing it. The greater the CTR, the greater is the likelihood of conversion.
- Conversion Rate- If you have set the conversion as someone who signs-up on your site or purchases the item, anything – You can then track it and use the data for your future campaigns.
- Cost Per Acquisition (CPA)- It is the amount spent by you to acquire each new customer. Low CPA, while high conversion rate is a sign that your performance campaign is a success.
- Return on Ad Spend (ROAS)- It measures the revenue generated from each dollar spent on ads. For instance, let’s say you spend 1000 Rs on an ad for your online store, and because of that ad, you make 5000 Rs in sales. This means your ad brought in five times what you spent.
- Customer Lifetime Value (CLV)- It helps you see how valuable a long-term customer is, showing the total revenue they’re likely to generate over the years. Ex: Imagine a customer buys from your online store four times a year, spending $50 each time. Over five years, they remain a loyal customer, making the same number of purchases.
In this case, that customer will bring in $1,000 over those five years. So, their CLV is $1,000.
Conclusion
Performance marketing is a powerful way to scale your business with clear, measurable outcomes. By following the best practices, analyzing results, and refining strategies, you can achieve sustainable growth. Partner with Step Production, a top performance marketing solution provider, to ensure your campaigns produce meaningful results, propelling your business to new heights of success.