The digital marketing industry continues to grow each year. Marketers must step it up if they want to get ahead of the competition. While some forms of marketing remain tried and true—look at print advertising!—new methods are constantly being developed to keep up with the latest changes in technology.
There are many digital tools available for advertisers and marketers alike, and they each have their own capabilities to level up your business. But with any digital marketing campaign, you must strategically choose what to implement to see results. If you don’t see the desired outcomes (or no outcomes at all), your team’s time, money, and effort are wasted.
Enter performance marketing…
What is Performance Marketing?
A combination of B2B paid advertising and brand marketing, performance marketing is a digital strategy driven by results. Simply put: you only pay for performance—clicks, lead generation, conversions, purchases, sign-ups, or whichever result you want to see. It’s an ideal approach for companies wanting to reach their audience at scale because payment depends on how users interact with the content.
Even as one of the newer marketing methods, performance marketing flips the traditional model on its head, putting power back into the marketer’s hands.
Data is essential to every marketer if they want to improve their business and grow it. Performance marketing allows the brand to target people based on their interests, demographics, and even past behaviors. This ensures that the brand’s ads are seen by only those most likely to be interested, resulting in a higher conversion rate.
How Does It Work?
The average performance marketing campaign consists of four key groups working together to achieve the desired result. Here’s a breakdown of each group:
Also known as retailers or merchants, these businesses look to promote their products and services and generate results through affiliate partners or “publishers.” These outcomes could include product views, lead generation, sales, and more. The affiliates get paid once the goals are achieved. Advertisers who invest in performance marketing have great potential to drive sales, new customer acquisitions, and real-time ROI campaigns.
Publishers or Affiliates
These agencies and service providers of performance marketing run the ads on their digital properties. Publishers own and run websites, blogs, eCommerce stores, or social media accounts where they can publish and run performance-based paid ads to enhance the performance of the advertiser or brand.
Third-party Networks and Platforms
Affiliate networks or third-party tracking platforms offer tools and channels to both advertisers and publishers for strategizing, running, and monitoring various digital advertisements. It’s a one-stop shop for keeping an eye on all performance-based measurements.
These platforms make it easier for advertisers and publishers to observe overall campaign performance while tracking and managing all payments and commission structures.
Outsourced Program Management (OPM)
OPMs or affiliate managers provide all the necessary services to run a successful campaign on behalf of the advertiser. These companies deliver performance marketing services, including strategizing, campaign planning, and optimization.
While affiliate managers can be in-house, brands may also work with agencies to manage the entire program or support the in-house team, depending on their expertise and an existing network of affiliate partners. Before choosing to work with a marketing agency, establish your marketing budget, specific goals, timeframes, and brand alignment for the maximum chance of success.
Related Reading: Paid Media: Your Guide to Making it Work in 2023
How does performance marketing differ from other B2B marketing strategies?
Even though performance marketing is a subset of digital marketing, the two are not exactly the same. Because performance marketing focuses only on campaigns directly linked to revenue or business objectives, it’s slightly different from the umbrella term digital marketing, which also includes non-goal-specific details such as website design.
Usually, in traditional marketing and advertising, a brand pays upfront for ad space regardless of how well it does. That could cost your business hundreds of dollars without ever seeing a conversion—marketers can estimate the results, but they’re never guaranteed. Performance marketing is specifically used to drive actions and track and measure those actions, all while attributing the ROI of each asset, campaign, or activity.
Strategies Under B2B Performance Marketing
B2B marketing as a whole has evolved tremendously over the years. Due to the advanced tools available, performance marketing can create high-performing campaigns for various audiences and different goals.
Several types fall under the performance marketing umbrella:
Native ads are more effective than display ads because they don’t look like ads. They blend in seamlessly with their environment, so they don’t disrupt the user’s browsing experience.
Most consumers use ad blockers or filter advertisements subconsciously (or both), but native advertising gets 10x more clicks than other forms of online advertising. Your ad’s design, content, and writing style mirror the non-paid content around it, making the user feel like it really belongs.
Sponsored content involves including a dedicated post or video on a website that publishes similar content. This way, the sponsored content will blend in with the rest but still have some indication that it’s sponsored. Sponsored articles can drive qualified traffic and conversions and increase overall online visibility in front of a highly targeted audience.
This is commonly seen with celebrities, social media influencers, PR sites, etc. These posts are contextual and help businesses access the influencers’ fan base or channels to expand their customer base.
Social Media Marketing
This form of performance marketing uses social media networks to gain traffic and build brand awareness. Social media offers not only the opportunity to reach users and drive them to your site, but users can also share your sponsored content organically, extending your reach far beyond the original post.
Social performance marketing also aims to create engaging B2B content that will encourage customers to interact with the brand. Social media networks provide clear metrics to measure KPIs such as cost per click (CPC) and your overall ROI.
Search Engine Marketing (SEM)
Advocates of SEM will tell you its strength is that it enables advertisers to put their ads in front of customers who are ready to buy. It’s definitely worth the time and investment to showcase your brand while the intent to purchase is high.
With SEM, you reach potential customers by showing ads when specific search terms are entered into search engines like Google, Bing, and Yahoo. Keywords are the foundation of this strategy, and choosing them wisely is pretty critical—identifying keywords relevant to your brand that prospective customers will use when searching is vital. For organic SEM, many performance marketers rely on content marketing and SEO-optimized landing pages.
Affiliate performance marketing aims to get customers to buy products or services from the advertiser by using a commission-based selling scheme. Affiliates send traffic to advertisers and receive a lucrative offer in exchange for an agreed-upon action (usually a sale). Affiliate publishers essentially act as an extension of your brand, using their site to sell your goods and services to users.
Learning the practical aspects of performance marketing can set your business up for success if you pursue one of these strategies. It’s not a one-size-fits-all solution, but brands looking to use their marketing dollars in a scalable fashion that focuses on short-term metrics should consider using performance marketing.
Need help developing a performance marketing strategy and putting it into action? Let’s get in touch!