You’re wondering, what is performance marketing? And is there such a thing as performance marketing for good?
This guide takes a deep dive into this marketing approach and how it can be used to create social impact.
What is performance marketing?
Gartner define “performance marketing” as an online marketing and advertising program in which advertisers pay marketing companies only when a specific action is completed, such as a sale, lead or click.
This collective term for marketing approach has become commonplace in the business lexicon as data becomes the foundation of marketing strategy. While in the past, attribution was nearly impossible, data transparency now enables marketers to optimise their campaigns so they perform better. And that’s why it’s called “performance marketing”.
Almost exclusively used as a term for online marketing campaigns where advertisers pay agencies or platforms for a specific result achieved, for example clicks, engagements or conversions.
Unlike traditional and organic marketing, although these areas of marketing are becoming more focused on data, performance marketing is specifically used to drive actions and attribute a return on investment (ROI) or return on advertising spend (ROAS) of each campaign, asset or activity.
This approach isn’t usually synonymous with ‘business as a force for good’; but that’s changing. Read on to find out what performance marketing for good is, and how advertising brands can get started.
How do performance marketing platforms work?
Most readers will be familiar with the big performance marketing platforms such as Facebook & Google.
Each channel has a specific audience and offers different types of advertising platforms to reach them. For instance:
- Facebook (who also own Instagram and are moving into the Metaverse advertising space) offer a huge variety of options to display a brand’s ads to the audiences visiting their platforms
- Google distributes a brand’s ads in search results and across their network.
No channel displays all adverts, to everyone, all the time. In fact, this would be a laughable pursuit. So the different platforms choose what to show using the following factors:
- Bid – modern advertising uses programmatic capabilities that take into account the amount you’ve agreed to pay to display your ad in a specific place, within a certain time frame, to the chosen audience.
- Target audience – segmenting your chosen audience to target the right people with your ad.
- Quality – if your advert earns low quality ratings, the network will reduce it’s exposure.
- Conversion – the very definition of performance marketing is underpinned by consumers taking action. When that action doesn’t take place, the platforms don’t get paid; so they get displayed more when they convert more.
How to measure & optimise your campaigns
As above, ROI and ROAS are defining components of performance marketing. Every action and activity is measured, reporting and analysed in detail against KPIs & objectives.
This is how the campaign’s performance can be benchmarked and optimised towards improvement.
Many advertisers use performance optimisation tools to track their campaigns regularly. The key to successful use of these platforms is to give them time; the more data you have, the deeper your insights are and the more you can optimise.
Here are some of the most common performance marketing metrics:
CPM – Cost per thousand (CPM), also called cost per mille, is a marketing term used to denote the price of 1,000 advertisement impressions on one web page.
CPC – Also known as Pay Per Click (PPC), Cost per click (CPC) bills advertisers based on the number of times visitors click on an ad attached to their sites.
CPA – Cost Per Action/Acquisition is where payment is based solely on qualifying actions. These could include downloading an ebook or app, purchasing an item, or some other action.
CTR – Click Through Rate is focused more on the level of engagement with your ad. It is used to measure the level of click throughs your ad receives.
Here is a really handy video from Publift which explains this further:
Benefits of performance marketing
Clarity with data analytics & tracking
Performance marketing is all about boosting performance levels for your specific business goals – such as clicks, impressions, purchases, downloads. As such, the data analytics and tracking involved in this approach is clear and measured.
Tracking performance of campaigns no longer focuses on ‘vanity metrics’ or ‘a feeling’. This type of marketing means you are on top of the metrics that really matter to the growth of your business.
Perhaps even more importantly, you will have clarity on when something is NOT working.
Return on Investment
The underlying principle of performance marketing is the return on investment. We mentioned that data analytics rules performance marketing. Therefore, you can have a clear picture of whether your campaign is making a return on investment. In real time.
This means you can optimise, adjust and reallocate budget as the campaign is ongoing. You can avoid unnecessary expenditure and ensure that your campaign reaps positive results.
With the speed of data analysis and real-time tracking of your campaigns, when one channel isn’t working you can switch to a better performing channel.
Spending money on the most effective channels for your campaigns is the best way to ensure you are generating revenue from your advert.
Pay only for results
Instead of paying an amount upfront, performance marketing lends itself to a payment on results basis. That means you only pay when your goals have been met.
It’s worth noting though, that if you work with a performance marketing agency it is likely that their fees will work slightly differently. You will also need to factor in the cost of any supporting AdTech or MarTech platforms you utilise. These will likely be charged on a monthly subscription basis. Check out Views For Change pricing & plans.
Introducing performance marketing for good
So far, you have answered the following questions:
- What is performance marketing?
- How do performance marketing platforms work?
- How can we measure & optimise campaigns?
- What are the benefits of performance marketing?
So now we’ve got the basics covered, let’s introduce the topic that we’re are here to consider. How can we use performance marketing for good?
Performance marketers don’t always have the best reputation. They can be considered greedy and growth hungry. We think that can change, if brands and performance marketing agencies inject social impact into their campaigns.
Marrying cause marketing and performance marketing
Cause marketing helps non-profits and charities but it also helps brands differentiate and drive business.
Performance marketing drives actions and is clearly measured and analysed.
Bringing cause and performance marketing together can generate amazing results.
By applying the principle of cause marketing (supporting non-profits and charities) with your campaign at the measurable action point, campaign performance can be enhanced exponentially. This is especially the case if you are marketing to Gen Z or Millennial audiences who are demanding social impact from the companies they work with.
How to do performance marketing for good?
So, you’re looking to build social impact into your performance marketing. Your brand wants to use it as a force for good while growing your business.
Following years of testing, the team at Views For Change have worked out the best place to inject charitable giving into your campaign to create a performance marketing for good campaign.
Guess what, it happens at the ‘action’ point. You reward your audience’s action or engagement with a donation to charity.
This encourages interested but undecided users (who just need a little extra nudge) to take the action you desire. This helps you to achieve your performance marketing results & generate an ROI.
The Views For Change platform enables you to create a donation reward, to a charity you’ve chosen based on your audience’s interests. You can then apply it to your performance marketing ‘action’ event.
The benefits of embedding corporate giving into your performance marketing campaigns go even further. Not only do you improve your metrics, but you also showcase your impact credentials and improve brand loyalty. This will support your customer retention and advocacy.
If you’re interested in finding out more about how the platform works, hit get started and book a demo.