At the start of 2021, the top priority among marketers worldwide was to generate more quality leads, according to eMarketer. This study indicates that nearly 80% of respondents are interested in growing their pool of leads and consumers, or rather, first-party data. However, a recent study by Hubspot found that 61% of marketers say generating traffic and leads is their top challenge.
For any advertisers that find themselves in this challenging position, performance marketing may be the answer for you. Performance marketing, also known as pay-for-performance advertising, changes the game for digital advertisers. Not only does this tactic help build your 1st party CRM pool, it, in turn, also reduces your reliance on third-party data, giving you longevity in the ability to continue to build your audience.
For those unsure what performance marketing is or how you can incorporate it into your digital advertising playbook, keep reading for a deep dive into performance marketing and key considerations for advertisers.
What is performance marketing?
Performance marketing is a tactic within digital advertising in which the advertiser only pays when there is a measurable result, such as a click, form fill, app install, purchase, or lead generation. This form of digital advertising flips the traditional ”pay before you go” methods on their head.
Performance marketing can be used across a variety of channel, including:
- Content/Blog Posts
- Coupon Sites
- Loyalty Sites
- Deal Sites
How Does it work?
Despite the unique payment method, performance marketing uses the same creative ad formats and targeting tactics as your other digital advertising initiatives. The process simply works as follows:
1. Develop Audience
The client identifies profiles and behaviors they want to engage. These initiate which websites to use to engage with potential customers in a cookieless environment leveraging first-party or second-party data
2. Target Audience
Using contextual, behavioral, site-specific, native site placement, list segmentation, age, gender, and state/city level geo-targeting ensures your ad is getting in front of the right audience.
3. Convert Consumers
Consumer converts on brand websites, in-app, or other publisher websites, generating quality consumers for advertisers.
4. Validate Data
Before sending the lead to the client, a quality performance marketing agency will validate the lead. They’ll check the email, address, phone number, and monitor and filter out any fraud, profanity, and if they are already in your database.
The customer information is then delivered directly to the client’s CRM, ESP, or DMP.
EXAMPLE: Khol’s only pays for leads that sign up to receive their newsletter
3 Key Channel Considerations for Performance Marketing
As mentioned above, performance marketing is an excellent tool for advertisers looking to up their first-party data. However, this channel has additional benefits that make it an ideal solution for those first entering the digital marketing world, those looking for a different avenue, or to test a new channel.
1. Low(er) Risk
Because you are paying for a specific action – cost per lead (CPL), for example – this automatically reduces the risk of wasted spending. For marketers on a tighter budget or needed to justify their media spend more thoroughly, performance marketing has a minimal cost of entry and requirement to invest upfront. Every dollar spent ties directly back to your KPI, yielding lower risk.
2. ROI Focused
Performance marketing, unsurprisingly, is highly ROI (return on investment) driven. Working with a performance marketing agency, you’ll receive ROI analysis updated in real-time, giving you access to data such as performance, conversions, and spend. Throughout your campaign, you can see what sales funnels consumers are using, how they navigate your website, and more applicable data.
You can then use this knowledge and information to target further your existing and future campaigns, which not only helps your performance marketing campaigns but your overall digital marketing strategy.
3. Free Branding
In an ideal world, everyone that sees your performance marketing ad would convert. But, even with the most well-targeting, captivating ad, we know this isn’t the case. However, this leads to the third key consideration when investing in performance marketing.
Other forms of digital advertising require you to pay for impressions. With performance marketing, any person that sees your ad but doesn’t convert yields free branding.
Performance Marketing Complements Programmatic Advertising
As alluded to above, performance marketing is not an isolated channel. Instead, it works in conjunction with your other digital advertising initiatives and helps to further your entire digital advertising strategy with the data, insights, and analytics it yields.
If you’re running programmatic advertising campaigns, performance marketing can help:
- Increases overall KPI of a combined initiative by using a more effective CPM approach.
- Balances out a multi-goal campaign. Say you are trying to grow brand awareness while also recruiting employees. Your programmatic campaign can focus on impressions and clicks, while a performance marketing campaign can complement the overall initiative by driving prospective employee leads. Both channels are used to best suit the different goals.
- Grow your first-party data pool so that it can be used in activation to build look-alike audiences to then use in current and future campaigns
Preparing for the (Cookieless) Future with Performance Marketing
As more conversions emerge regarding third-party data and the cookie-deprived future, one of the best initiatives marketers can take to prepare is to build out their own first-party CRM. A great way to do so? Performance Marketing.
Performance marketing gives advertiser’s the opportunity to attain quality leads and build their first-party data while also giving them a lower barrier of entry into the digital advertising world with the unique payment system.
Digilant’s Performance Marketing Expertise
Digilant is a full-service digital advertising agency, which makes us your one-stop-shop for all things digital advertising: programmatic, social, search, and of course, performance marketing. We have relationships with thousands of publishers that we work on on a pay-for-performance basis, ensuring that your ads reach your audience where they already spend their time.
On top of these beneficial partnerships, we know that advertisers feel more pressure than ever to quantify their media spend. This is why we offer 24/7 access to 100% transparent analytics dashboards, updated in real-time. These dashboards cover all your digital advertising campaigns in one place. This eases your ability to see what channels are working best and shift investments to achieve your desired KPIs better.
When partnering with Digilant, you’ll have a team of performance marketing experts working on your behalf to ensure the best creative and tactical solutions are used for your campaigns. Whether it is a new creative ad format, uncovering a new audience, or testing a new channel, Digilant combines data-driven insights with industry expertise to ensure the best possible results.
Interested in learning more about Digilant’s performance marketing solutions? We’re eager to talk. Contact us today!