Performance Based Marketing

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Performance marketing is a way of marketing where the results control the activities.

Reaching the right audience with the right message at the right time is the very core of digital marketing and our goal in everything we do. Performance-based marketing allows you to first test what works and then you increase your efforts on the platforms and channels that deliver the best results. It’s a very cost-effective way to do digital marketing.

Measurable marketing

Performance marketing is result-oriented, measurable marketing. This means that the effect of various campaigns and ads is mapped, and is used as a starting point for optimising the marketing activities while the campaign is still running. The goal of the campaign can be impressions, clicks, spread, sales, engagement or something else, and the budget is directed where the effect is greatest. In performance marketing, there is a high focus on reporting very specific results and what value is generated from the campaign. Unlike traditional marketing, where you don’t quite know what you get for a campaign, performance marketing is a very cost-effective way of marketing. However, you must be prepared to work efficiently, analytically and continuously.

In performance marketing, you work across the ordinary distinction between the different media, channels, formats and pricing models. It’s an innovative and dynamic way of marketing because it’s always focused on optimising your campaign. Thus, you will never end up on a track that does not generate value or does not achieve the goal.

Detailed segmentation and targeting

Performance marketing can be said to be the opposite of mass communication. While the latter is trying to reach as many people as possible, performance marketing focuses on meeting each consumer with an individualized message. Therefore, performance marketing campaigns are often split into smaller segments.

With performance marketing, you can direct various messages and ads to different audiences so that those exposed to the ad actually see it as relevant to their needs. You can address different messages to customers who are at different stages of the buying process so that they move on to the next step and take the desired action. You can also segment ads by age, gender, interests, geographic areas, marital status, etc.

Specifically, you can, for example, split your Google Ads campaigns into many small ad groups with custom ad text, or direct Facebook advertising directly to different audience segments. This must be followed up and adjusted continuously.

Measuring concrete results

There are things we know and things we can prove that we know. In performance marketing, the evidence weighs heavily. In a performance marketing project, you must have access to and collect measurable data, so that you can exploit these to increase the effect of the marketing campaign. The data should include specific and tangible sizes such as clicks, sales and number of registrations. The campaign should not be based on assumptions, perceptions and feelings.

In order for it to be possible to collect data continuously, the marketing message must allow for response in the form of measurable actions. This can be, for example, displaying a video, downloading a document, clicking a button, completing a contact form or a purchase. These data are collected and analysed continuously. In this way, you can both prove that the activities support and contribute to the business, as well as increase the effort where the activity has the greatest effect. These are the four most common types of results that are often referred to in performance marketing:

  • CPM (Cost per Mille or Cost per Thousand): The number of times your ad is shown to a person, given per thousand impressions.
  • CPC (Cost per Click): You pay each time someone clicks on your ad. Price-per-click depends on the competition on the keyword, the quality of the ad and the landing page it leads to. Advertising through Google Ads is based solely on this pricing model.
  • CPL (Cost per Lead): A pricing model where the provider charges for the number of specific inquiries from leads (potential customers).
  • CPA (Cost per Action): You pay when a specific action happens, usually a sale. This is common in affiliate marketing.

Continuous testing and optimization

Through performance marketing, various strategies are tested, the results are measured and the campaign is continuously optimized throughout the campaign period. By systematically improving and optimizing, you will constantly achieve better results. Based on the results that are created, you can measure and adjust:

  • The message
  • The Targeting
  • The costs

Performance marketing is, therefore, a very cost-effective form of marketing. Most of the work takes place after the campaign has started, and the working method requires that you keep a high focus and pace.

Don’t worry about measuring the impact of the channels you already advertise in – experiment with different channels like Facebook, LinkedIn, and Google, so you can get a broad database. The results may turn out to be quite different from what you think.

Flexible budgeting

Performance marketing does not work in fixed budget frames, as the effort is determined by the results. Return on Investment (ROI), ie how much money you get for each dollar invested, is calculated along the way in the campaign. You can, therefore, redirect your budgets according to which channels and campaigns provide the highest ROI. You choose a level to start with, which is then expanded as the campaign is profitable. The consumption of resources should be determined by the ROI, not the cost budget.

You can easily make money from campaigns that perform worse than expected and place them in campaigns that work better. It is difficult to predict which advertising generates the highest ROI, and therefore it is beneficial to be able to move the budget as data is collected. When you get specific figures on which ROI a campaign is generating, most people want to increase their budget so they can invest more where you get the highest return.


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