The internet has forever changed the way people browse and purchase goods. So, naturally, it also revolutionized how businesses advertise and sell their products. Due to the rapid growth of online shopping in the global disease ( an increase of 43% by 2020!) and the growth of omnichannel marketing and omnichannel marketing, the possibility to connect and attract more customers more frequently is also growing.
In this comprehensive guide to performing marketing for eCommerce, you’ll discover the essential steps to start your successful performance marketing plan. If you’re a newcomer to the concept of performance marketing, then you’re looking forward to a wonderful experience.
Table of Content
- 1 What Is Performance Marketing?
- 2 What are the Benefits of Performance Marketing?
- 3 Types of Performance Marketing in ecommerce
- 4 Top performance marketing channels
- 5 How to Build a Performance Marketing Strategy for ecommerce
- 6 Performance Marketing Examples
What Is Performance Marketing?
The term “performance marketing” describes online advertising campaigns that allow advertisers to pay marketing firms or advertising platforms for results, including clicks or conversions.
Contrary to traditional and organic marketing, the performance marketing method is employed to motivate actions, measure and track these actions, and assign the return on investment of every asset, campaign, or event.
While large corporations can invest millions of dollars in branding, businesses must concentrate on their bottom line to remain profitable. Performance marketing puts the power to the advertiser. You choose the action and then pay once the task is complete, regardless of whether it’s a purchase, lead, or click.
What are the Benefits of Performance Marketing?
The digital marketing market is expanding yearly; the performance marketing industry has enormous potential to grow your business once you can embrace its full power.
The top 3 reasons your company should consider investing in performance-based marketing:
You can connect with new audiences through affiliates and agencies that have established audiences of their own and drive more traffic to your website.
Performance marketing is quantifiable and clear. In reality, companies can now view the complete journey from click to purchase of every buyer and pinpoint where they should invest more, and with the right partners, what channels will produce the best results.
Since affiliates only get paid when an action is taken the place they are paid based on the outcome of their actions. The CPA (Cost Per Acquisition) is typically lower, and the ROI can be higher. This means more room for other marketing strategies to be developed and tested to help you expand and be competitive.
Pay for Results
The last thing they would like is for their ad to be ignored. And, worse yet, targeting people who aren’t likely to make a sale. Through programmatic advertising, advertisers are in a position to ensure that their correct audiences notice your ads without the risk of losing potential ad places. Thus, ads will get more targeted views and higher conversion rates.
Since advertisers are paid for the results, There is no risk of wasted advertising. Even if cost-per-impression increases, marketers can be confident that they’re paying for interactions with viewers. A study by the Performance Marketing Association estimates that marketers will earn 12:1 returns on their marketing performance.
Types of Performance Marketing in ecommerce
Performance marketing is classified into various categories according to the expected results of the brand and the channels employed.
Based On Expected Results
It is generally divided into two groups, one that is focus-oriented and those that are based on action.
- Goal-based marketing campaigns are the ones that have the advertiser set an exact goal for the campaign, like a certain amount of generated leads or sales made.
- Action-based campaigns are ones where advertisers pay for a specific action that must be performed by the user, like buying, click-through, or signing up.
The goal-oriented and action-based campaigns are further classified into three types based on the type of marketing which is being recognized:
- Acquisition campaigns are where the advertiser is trying to draw new customers.
- Engagement campaigns are campaigns that advertisers want to get existing customers to engage more in the company.
- Conversion marketing campaigns are where the advertiser would like to convince leads already in the market to buy from them.
Based on Channels Used
- Search performance marketing: is the method of using paid search ads to bring users to a website. It involves paying for advertisements to appear on search results pages, such as Google, Yahoo, and Bing. Search performance marketing strives to achieve advertisements’ highest click-through rate (CTR). This is achieved by making advertisements that are relevant to the terms being searched and directing the correct target audience.
- Social performance marketing is the method of utilizing organic and paid marketing strategies on social media to meet brand-related goals. Social performance marketing creates content that encourages customers to engage with the business. It can be achieved using paid advertisements; however, it is usually achieved by creating organic, high-quality content.
- Email marketing: the marketing strategies via email to accomplish business goals. Performance marketing for email aims to encourage customers to engage with the brand through engaging with and clicking on emails. This is accomplished by creating relevant email content and targeting the correct target audience.
- Performance marketing for publishers: the procedure of using ads from publishers that are paid to direct visitors to a website. Performance marketing for publishers is paying for advertisements displayed on websites and within applications that the advertiser does not control. Publisher performance marketing strives to achieve advertisements’ highest click-through rates (CTR). This is achieved by making ads that have relevance to the user of the app or website and also by targeting the appropriate people.
- Affiliate marketing is the technique of using affiliate marketing strategies to reach business goals. It aims to convince customers to purchase items or services from the advertiser using an incentive-based selling program. This can be achieved through partnering with affiliate curators, publishers, and influencers and offering them lucrative promotions.
Top performance marketing channels
1. Social media marketing
In the end, agencies and media purchasing professionals have been investing heavily in the use of social media advertisements to help in their performance marketing plans.
Social networks offer precise metrics to evaluate KPIs like click-through rate (CTR), Cost per Click (CPC), and your overall return on investment. Similar to every other performance marketing strategy the first step is to define your goals.
2. Native advertising
The native advertisement allows click-through possibilities on websites where your market consumes content. Native advertising generates 10 times more clicks than other online advertising.
3. Sponsored content
Like discovery content, sponsorship content is another form of native advertisement considered a content-performance marketing tactic. Articles sponsored by sponsors can result in qualified traffic and converts and increase the overall visibility of an online site before a focused public.
Sponsored articles can be profitable for publishers and advertisers if properly executed.
4. Search engine marketing
The practice of search engine marketing (SEM) is the process of trying to increase clicks and visibility by using both paid and organic advertisements. In this article, we’ll only discuss paid advertising, which is an effective performance marketing option.
With the help of the Google AdWords program, SEM has been the most well-known performance marketing channel for a long time.
People who support SEM will inform you that its strengths lie in the ability it gives advertisers to get their advertisements before customers who are willing to purchase.
5. Affiliate marketing
Affiliate marketing is a well-established kind of performance-based marketing. In this well-known model, a publisher is made an affiliate when they establish relations with an advertiser that results in sales and traffic (or an agreed step).
Affiliates provide traffic to advertisers and earn money to be exchanged for an agreed-upon procedure (a sale, in most instances). Affiliate publishers act as an extension to your company’s brand, using their websites to market your products and services to consumers.
How to Build a Performance Marketing Strategy for ecommerce
There are many performance marketing strategies and channels, but there isn’t one way to go about it. But, these are the most important steps to creating an effective strategy for performance marketing that can be used for any type of audience. Utilize them as a roadmap to help you get your campaign off to a successful start.
Step 1: Establish your campaign goal
Before you can gauge the success of any marketing campaign, it’s crucial to define your goals for the campaign, if it’s about generating brand awareness or selling products setting objectives before launch is the fundamental premise of performance marketing.
Many advertising platforms require you to define goals before making ads or establishing campaigns. The goals you set for your campaign determine the location where your ads will be displayed, the people they’re shown to, and other aspects that are crucial for success.
The most sought-after digital marketing goals include:
- Brand Awareness
- Website Traffic
- Remarketing or Retargeting
- Lead Generation
After you have set your goals for your campaign and objectives, you can then use advertising platforms to design targeted campaigns.
Step 2: Choose your digital channel(s)
Regarding performance marketing, it’s a good idea to diversify your channels instead of focusing solely on one channel. This can help spread visibility and reach, increasing your chances of success. It doesn’t matter if it’s affiliate marketing, native advertising, or other social media platforms; search for platforms that specialize in the type of conversion you want to achieve and where you’re most likely to reach your ideal people.
By diversifying your social media platforms, such as Facebook, for instance, or extending your reach beyond basic displays to native advertisements, You can dramatically expand the reach of your campaigns and expose your campaigns to a larger public.
Step 3: Create and launch the campaign
The bulk of the work in performance marketing is devoted to creating campaigns that can identify the target people, understanding their needs and wants, and composing advertisements and messages that address the needs of their customers and catch their interest. The more you are aware of the people you want to reach and how your product or service could draw them in, the more straightforward it is for you to design the most effective ad images, headlines design, and schedules. Also, the technical aspects of the campaign, like ad sizes, copy character limits, and acceptable pictures, depending on the particular platform or channel you’re using.
Step 4. Improve your campaign
The actual work begins after launch. Campaigns that are designed to perform create information as soon as they’re in operation. The marketer is responsible for ensuring that individual campaigns are optimized to maximize performance across all channels that are used. Monitor the metrics and analytics to determine the traffic sources that perform best and decide how to allocate funds for ads. Utilize performance marketing campaigns to increase sales and determine the most effective channels, audience, and goals for your campaign to maximize the return on your investment.
Performance Marketing Examples
As an example, French jewelry manufacturer and designer PANDORA collaborated with Taboola to create a native advertising campaign that aimed to increase the brand’s image and converts using display and content discovery techniques.
This led to customers spending longer browsing the PANDORA website and, in time, boosting the rate of conversion to 130%.