The term ‘performance marketing’ has become ubiquitous in online advertising and very focused on lower funnel marketing tactics. It is true that these marketing channels use the principals of performance marketing most often. And over the years the association of the term ‘Performance Marketing’ has been reinforced to mean digital media with the various performance-based buying, measurement and optimization options offered to marketers today.
But all marketing channels can be performance marketing vehicles. So, it does not matter whether you are a media relations pundit, event and sponsorship expert, offline media genius, OOH strategy guru, direct marketing master, email marketing wizard or a digital marketing maestro. If you can answer ‘YES’ to all these questions below, then you can confidently add ‘Performance Marketer’ to your title.
1. Defining goals and key performance indicators (KPIs) that can be measured accurately
There are broad company goals, which are then supported by the goals of the marketing team. You can use one of these as your goal. But you need to make sure it works for you. Also, determining the right KPI on how you will measure success is critical because it can make the difference between success and failure.
For example, you oversee the company blog and decide that you want to support the broader business goal of helping to grow the top-line revenue. And you want to do this by helping drive new business leads. Stating your goal as ‘drive new business leads’ may not be realistic because then you will need to show how many new business leads came from the blog. A better way would be to state your goal as ‘drive more traffic to the product pages through the blog’, which ultimately will help increase the new business leads.
And your KPIs would be – 1. How well the articles from the blog rank on the various search engines 2. How many unique page views were generated 3. The # of clicks driven from the blog post to the product pages, and 4. How many ‘lead form’ starts were generated from the blog traffic. You can measure these KPIs to show how well you are meeting your goal, and how that is supporting the broader business goal of driving new business leads. A secondary KPI you can look at is the # of ‘lead form’ completes. But use it more as a qualitative measure vs. a success metric.
2. Actively measuring the results
Once you have your goals and KPIs set, you need to define the benchmarks you want to reach. In the above example, at the end month one, you may define the benchmark as successful if you had 1000 ‘lead form’ starts. You need to make sure you have a success benchmark for each KPI.
The key to any performance marketing is to consistently measure. The frequency is not as important as the cadence. For example, if you are participating in a 3-day event, and your goal is to increase awareness for your new product offering through product trial(s). You can decide to monitor the # of trials done at 4-hour intervals. This will provide you the necessary information to monitor progress and take corrective action if needed.
3. Constantly testing and optimizing
Once you know how you are doing, you can now start to take actions to improve performance. This is at the heart of any performance marketing activity. Again, the # of tests or optimization is not as important as the cadence you set for yourself. The more tests and optimizations you have, the better your activity will do.
Let’s take the example of a direct mail campaign. The development, production and deployment timelines for such an activity can be anywhere from 4-8 weeks. So, you could set up a cadence to change and test something every 2 months, the learning from each test could then be incorporated into the control version to improve performance. You can even launch multiple tests but be sure to only change one variable at a time to be able to understand the impact on performance.
4. Putting performance-based compensation or rewards in place
You can buy digital marketing based on its performance. Cost Per Click is a common way to buy search ads on #Google, which means you only pay for the clicks on your ad. And there are many other pay for performance methods that are offered like cost per acquisition, cost per lead, cost per view etc.
But how can you put in performance-based compensation for something that is not as easy to measure? For example, the work that your creative agency does. If you work with your agency partner, you can find a creative way to measure performance. You could possibly base it on how memorable your ad is to consumers or how much it affected the brand consideration. It could also be based on actions that you expect to drive with your ads.
5. Trying before Buying
When you are trying something new, it’s always a good idea to test it out with a smaller investment. This will help you verify your hypothesis and possible results before you commit a larger investment. Don’t worry that you did not get the best price / discount because you are not committing to the longer-term contract or making the bigger investment. You don’t want to be stuck in a long-term commitment if the activity does not work for you.
But the one thing to remember with testing is to ‘Fail Fast’. This enables you to quickly understand what works for your brand and what does not.
