Performance Marketing

What is Performance Marketing?

Performance marketing is a set of activities which are to encourage the recipient to perform a particular action. The advertiser pays for the effect, i.e. only when the recipient performs the desired action. What can this "action" be? First and foremost, what the customer cares about: clicking on a banner, entering a website and making a purchase. It is important that the degree to which the goal is achieved can be measured, e.g. using web analytics.

In our opinion, performance marketing is the essence of marketing for four important reasons:

1. Performance campaigns bring visible and measurable results to our clients.
2. It is the shortest way to turn a brand recipient into your customer.
3. Campaigns are displayed primarily to those recipients you care about.
4. Every penny spent converts into the desired result you see in the statistics.

Table of contents:

Goals of performance marketing

Every marketing activity should be undertaken for a specific purpose. Performance marketing allows for achieving specific results. Very often these include: an increase in the number of transactions in an online shop, and thus an increase in sales - but not only. Before we plan a performance campaign for you, we will first ask you about the goals you want to achieve.

• Do you want your customers to come back to you more often? If so, we'll prepare ads that increase the number of repeat visits to your website.
• Or maybe you want to acquire e-mail addresses of potential customers? In this case, we will design a campaign using a newsletter or a landing page.

Popular Performance Campaign Goals:

Here are the most common performance campaign goals chosen by clients:

• making a purchase in an online shop
• acquiring contact leads
• registering on the website
• subscribing to a newsletter
• completing a survey
• downloading an ebook
• liking or subscribing to a brand's profile in social media
• visiting a landing page

Performance marketing channels

Once we have defined together with the client the marketing objectives to be achieved by the campaign, we will select appropriate advertising channels and formats for them. The most frequently used channels in performance marketing are those listed below.

Naive ad

A good native ad should be valuable, interesting and contextual. It may be displayed in the form of, among others: an article, a photo, a video or a blog post. It differs significantly from display advertising, whose main task is to catch the attention of the recipient and redirect him or her immediately to the sales page. Thanks to the fact that native advertising naturally fits into the place where it is displayed and does not have such a pushy sales form, recipients trust it more.

Social Media Ads - e.g. Facebook Ads, Pinterest Ads, LinkedIn Ads, YouTube Ads, TikTok Ads

The advertising systems of social media platforms are adding new advertising formats and also new targeting possibilities year after year. We use Social Media Ads in many of our clients' campaigns. They allow us to obtain contact details of your potential customers (e.g. Facebook Ads), send them private sales messages (e.g. Linkedin Ads) and, based on an already created group (e.g. people who are currently your customers), create groups of similar recipients (e.g. Pinterest Ads).

Affiliate programmes

Affiliate programmes are mutually beneficial - for both advertisers and affiliates. Why? Advertisers pay, and in return they get results like leads - that is phone numbers or emails to potential customers. The remuneration goes directly to the website owners.

Price comparison services - e.g. Ceneo

Price comparison services are very popular tools that you or your potential customers have probably used more than once. If you have a good product and a competitive price, your offer should certainly be visible in price comparison sites. Ceneo, like other such platforms, has its own advertising systems and advertising formats in which our specialists will prepare campaigns for your e-commerce.

Advertising services - e.g. OLX

Advertising sites also have their own advertising systems. Within classifieds portals such as OLX, for example, you can display banner and native ads. This is a great way to reach people looking for bargains, as well as users interested in selected products.

E-commerce platforms - e.g. Allegro, Amazon or eMag

Do you run an online shop? Don't wait for customers to find your shop. Look for your customers one-commerce platforms such as Allegro, Amazon or eMag. They are already there! Platforms such as Allegro have the great advantage of being easily integrated with many other e-commerce systems such as Shopify, Shoper, Magento. This way, you can quickly generate a so-called product feed and transfer your product offerings to these platforms automatically.

Selling on Allegro - when and why is it worth it?

Selling on Allegro is a good way to test the sales potential of your product. Appearing on this platform is also a chance to increase the recognition of your brand. It is also an opportunity for more developed e-commerce businesses, which are looking for new markets.

E-mail marketing

Email marketing campaigns can be used in many ways. With an inbox message you can encourage existing customers to:

• to use a discount code
• to purchase a new version of a product
• or to return to a shopping basket from which they previously left

Behavioural retargeting

Do you want to increase conversions in your online shop? Let us prepare a retargeting campaign for you. Using so-called behavioural retargeting you can assign recipients to specific groups. Thanks to this, people who browse a particular shoe model in your shop can display the same shoes in the form of an advertisement again in the future. This channel encourages recipients to return to the site and submit a transaction.

Advantages of performance marketing

1. Performance marketing is measurable - all the effects achieved are presented using specific numerical indicators
2. It is characterised by high transparency - activities are regularly reported to the clients. Thanks to transparent remuneration models, clients know what they are paying for and can control the ratio of costs incurred to profits generated.
3. Performance campaigns can be diversified - all campaigns work best when they are diversified. That is, when different customer acquisition channels are used to generate results
4. Performance marketing is flexible - by running campaigns on different channels, you can quickly modify their objectives. Thanks to this, you can flexibly "shift" funds to those places which generate the highest profits or best results
5. Performance marketing is economical - channels of conducted activities are selected in such a way as to ensure higher return on investment. By skillfully targeting groups of recipients and adjusting communication channels, we prevent the phenomenon of "burning through" the advertising budget. Every zloty or euro you spend is an investment
6. It is a good investment - performance marketing gives a high probability of return on investment, as opposed to, for example, branding campaigns
7. Performance campaigns often produce quick results - this is not the case in every instance, but very often the effects are visible after just one day or a week from the start of the activities

Cooperation within affiliate programmes (affiliation)

An important area of performance marketing isaffiliation. This is a model for establishing marketing partnerships in which all parties involved benefit from. This affiliatecooperation takes place within the framework of an affiliate programme. It involves:

• Advertisers – companies that care about selling products or services by promoting themselves on websites. They pay only if the promotion delivers results
• Publishers – sites and social media users who, operating in various industries, want to earn money by recommending advertisers' products
• Affiliate network - it provides an affiliate system to the above two parties. It allows cooperation between publishers and advertisers in various remuneration models - CPL, CPS, CPC, among others. Find out exactly what these abbreviations mean below

Remuneration models for performance marketing campaigns

The remuneration models for performance marketing campaigns are different depending on the effect you want. This allows you to determine precisely how much it costs to achieve the results you want. It also makes it easier to assess whether the cost of performance marketing is adequate for the profit it brings.

Examples of billing models:

• CPC - Cost Per Click - cost per click, e.g. on an advertising link
• CPC - Cost Per Call - cost per call
• CPL - Cost Per Lead - cost per lead, e.g. for registering on the website or subscribing to a newsletter
• CPA - Cost Per Action - cost per action or acquisition, e.g. sending a request for an offer
• CPO - Cost Per Order - the cost for placing an order
• CPS - Cost Per Sale - cost per sale (commission)
• It is possible to use the so-called hybrid model, i.e. a combination of two of the above models, e.g. CPC + CPL etc

How to measure the effectiveness of performance marketing?

Apart from the cost to profit ratio of performance campaigns, we also measure the effectiveness of performance marketing for you. The essential tool for this is Google Analytics or Piwik Analytics. We can measure in it, among other things:

• CR – Conversion Rate - It shows what percentage of people who visited the website made a purchase. This may also be a different type of conversion, e.g. subscription to a newsletter or filling in a form on a landing page.
• CTR – Click Through Rate - It shows what percentage of people who visited the website made a purchase. This may also be a different type of conversion, e.g. subscription to a newsletter or filling in a form on a landing page.
• ROI – Return On Investment - is the basic measure allowing to determine the profitability of actions. Thanks to it, you can see the profit from each PLN or euro invested.
• The average value of transactions - is the value of all transactions divided by their number. With this indicator you can control the value of transactions in different periods/tools and channels.

Advanced web analytics - Monitoring performance marketing campaigns

The element without which performance campaigns would make no sense isadvanced analytics Only by monitoring performance marketing campaigns and their constant optimisation it is possible to achieve the desired results. That is why our specialists analyse results at each stage of the sales funnel. It is on the basis of observation of consumer behaviour that we can draw conclusions, optimise spending, change targeting, positioning and other elements related to the marketing campaign. To make the analysis of your ads as accurate as possible, we will connect specialist tools to your website, LP, and social media.

Performance marketing - summary

If you want to:

• achieve measurable and specific results
• control profits and costs of conducted actions
• consciously scale marketing activities
• lead the expansion into new markets
• optimise campaigns based on extensive analytics and increase the conversion rate...

...then performance marketing is for you. It's a combination of strategy, analytics and channels tailored to your business. We conduct all the activities for you based on jointly set goals. When we run marketing campaigns, we collect information about all users who have interacted with ads. We use the analytical data to make your ads more cost-effective and profitable.

Bibliography

• Report „e-commerce 2021”, Interaktywnie.com
• Report „Reklama w Internecie 2020”, Interaktywnie.com

Paulina Franus

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Project Manager

Frequently asked questions about Performance Marketing

Who is performance marketing for?

Performance marketing increases website traffic and sales value of every type of e-commerce business. Performance marketing is used by many of our clients from such industries as travel, FMCG, renewable energy, fashion, retail, car parts and many others.

Does performance marketing work?

It works! The statistics prove it. Spending on e-commerce advertising worldwide increased in 2020, relative to 2018 by about 17%. What's more, further increases are predicted until 2023. Industries such as automotive, food, beverages and spirits, clothing, media, books, etc. are actively investing in online advertising. What is more, performance marketing is one of the most frequently used types of campaigns. Their main advantage is that they can be run simultaneously on multiple channels: email marketing, mobile marketing, social media, Google Ads, e-commerce platforms and others. Moreover, they are used to achieve specific business goals, which you hold us accountable for :)

How much does performance marketing cost?

The cost of performance marketing depends on many factors: the objective, the channels chosen, the activities of the competition, the advertising formats and the billing model. It therefore requires individual pricing. However, performance marketing activities are primarily about ensuring that their cost is commensurate with the profits generated.

How is the effectiveness of performance marketing campaigns assessed?

We measure the effectiveness of performance marketing campaigns for you with the help of advanced analytical tools that we plug in at the preparation stage. It is assessed on the basis of specific indicators such as CR, CTR, ROI and others.