Essentials of Performance Marketing 101

According to Statista, over $450 billion was spent on digital advertising in the year 2021, and that number is expected to grow steadily and reach $646 billion by 2024. Given these predictions, it’s hardly surprising that innovative online marketing methods are constantly emerging — from social media advertising and affiliate marketing to email marketing. However, the standout amongst these is performance marketing.

What is Performance Marketing?

Performance marketing strategy refers to online campaigns where companies pay advertising platforms or marketing agencies depending on real outcomes, such as clicks or conversions. Contrary to traditional and organic marketing, performance marketing is explicitly designed to instigate specific actions and monitor those actions meticulously. This also allows for accurate ROI attribution for every asset, campaign, or activity.
While large corporations can pour millions of pounds into brand building, most businesses must keep a keen eye on the bottom line to remain viable. Performance marketing strategy empowers the advertiser. You choose the desired action and then pay only once that action is completed– a lead, a click, or a sale.

Benefits of Performance Marketing

As readers might have figured out, there are several advantages to delving into performance marketing. The most notable of these benefits are:

• • As digital marketing grows more promising each year, using performance marketing can boost your advertising efforts to match your company’s needs without spending too much.
• • Performance marketing provides an innovative and efficient way to expand your audience, enhances outreach, and gathers invaluable data.
• • The benefits of performance marketing are vast and keep emerging. By tapping into its full capabilities, such as native and affiliate promotions and sponsored content on social media, business expansion becomes more straightforward.

Performance Marketing Channel

Performance marketing channels are the platforms where publishers or advertisers position a company’s adverts to enhance customer engagement. Marketing agencies utilise five primary performance marketing channels:

Display Advertising

Display advertising employs a mix of text, images, or videos to promote a product or brand. A good digital marketing agency in Abu Dhabi posts these adverts on websites to capture the user’s interest. The adverts are carefully positioned on the “right” websites, which means that the agencies evaluate the nature of the website and the kind of visitors it draws before placing the advertisement. By doing this, they aim to ensure that the brand’s advert on that specific site will yield heightened engagement.

Example:

The display advert for a job portal might appear on a CV creation site because people working on their CVs are likely on the lookout for a new role. Given this, there’s a significant chance the advert will attract such users to the job portal, thereby boosting its engagement.

Search Engine Marketing (SEM)

Search engine marketing (SEM) is a form of marketing frequently paired with native advertising and other promotional methods. SEM enhances a website’s visibility on the Search Engine Results Page (SERP). Websites or web pages displayed at the top of the SERP have paid for their prime position to boost engagement. This advertising strategy is termed pay-per-click (PPC), where the company reimburses the advertiser each time a user clicks through to the webpage. Marketing agencies might also employ SEO (search engine optimisation). This technique centres on identifying pertinent keywords to embed within the webpage, ensuring it secures a high position on the SERP.

Native Advertising

Native advertisements aren’t presented as conventional ads. Instead, they blend seamlessly into the platform they’re on, whether it’s a website or social media. Typically, they come across to users as recommended videos or articles. These are common sights on social media platforms or various websites. For instance, after someone reads an article about eco-friendly home products, a sponsored post about sustainable cleaning solutions might pop up as a suggested read. Since it aligns with the user’s current interest, they’re more likely to be enticed to click on and engage with this subsequent piece.

Example:

A prime example of native advertising was the collaboration between Netflix and Spotify to promote the series “Stranger Things”. Users could activate a “Stranger Things” mode, which allocated them a playlist inspired by a character from the show. This not only amplified the series through background imagery and branding but also struck a chord with listeners, as the playlist selections mirrored their personal listening preferences.

Social Media Marketing

Every performance marketing firm that understands its target market today uses social media as a powerful tool since it offers so many opportunities to engage clients and boost interactions. Brands can engage with audiences who, if intrigued by a product or service, may share or interact with it, thereby amplifying brand visibility and recognition. On these platforms, paid and sponsored content holds significant importance. Within social media, brands typically use the CPM method, or cost-per-mille, where the brand pays a third party for every thousand views their advertisement garners.

Content Marketing

Content marketing centres on producing and sharing valuable, relevant content related to the product, service, and customer. Its main aim is to educate the target audience about the product or service. In content marketing, adverts are subtly integrated, tying the brand in context to what the user is consuming. Content marketing can manifest in various formats, such as blogs, ebooks, podcasts, etc.

Example:

A firm that retails organic food might host a blog detailing the merits of organic farming and the advantages of eating organic dishes. This blog could feature a link directing readers to their organic food brand’s website, guiding them to explore further.

Performance Marketing vs. Digital Marketing

Digital marketing includes performance marketing as a subset. Though they both utilise similar platforms and target the same audience, there are distinct differences between digital marketing and performance marketing. Digital marketing encompasses a broad spectrum of digital platforms and channels. Its main focus is on promoting a product or service, whereas performance marketing is geared towards achieving specific results and bolstering engagement. With performance marketing, specific key performance indicators (or KPIs) are employed to gauge performance. This allows for tangible tracking of progress, something which might be more challenging with other digital marketing approaches. While performance marketing tends to zero in on short-term objectives, digital marketing methods often eye longer-term aspirations. Essentially, the core distinction is that digital marketing covers all digital channels and the strategies employed therein (including performance marketing), while performance marketing refines and amplifies these channels and strategies.

Performance Marketing KPIs

A hallmark of performance marketing is ROI. Every undertaken activity and action by a performance marketing agency in Dubai is assessed, recorded, and scrutinised against set KPIs (Key Performance Indicators). Here are some of the principal metrics and KPIs frequently employed by a performance marketing agency in Dubai in performance marketing:

• • CPM: CPM represents Cost per mille or Cost per thousand. It reflects an advertiser’s expenditure for every 1000 views of a digital advertisement. Simply put, it’s the cost for every 1000 times an advert appears to users.
• • CPC: Cost per click signifies the fee paid each time a user clicks on an advertisement. CPC offers a more accurate insight into engagement than CPM, given that the user has actively clicked on the advert.
• • CPA: CPA, or cost per action, evaluates campaign success based on a specific action you wish your target audience to undertake, whether downloading an ebook, registering, subscribing, making a purchase, or any other intended activity.
• • LTV: Another valuable metric that assists in deciding the budget for marketing is a client’s lifetime value (LTV). This metric represents the aggregate revenue a company anticipates getting from a single customer.

As marketing trends continue to invest heavily in all facets of digital marketing, performance marketing in Dubai emerges as a promising avenue for business owners aiming to engage and convert new customers efficiently and cost-effectively. Collaborating with publishers and affiliate networks offers an extended reach that might be elusive with more conventional marketing methods. Regardless of your brand’s current position in the performance marketing realm, there’s always potential for refinement and expansion. Determine which digital marketing strategies resonate with you and how to cater to both your brand and your affiliate partners’ requirements. Once you’ve set clear objectives, dive in and begin forging those relationships.