Performance Marketing Practices

It’s been an interesting year for businesses, but one common thread is the increase in online activity. This makes it even more important for businesses to get things right here. One common thread is the concept of performance marketing and how it relates to the modern/digital marketing worlds. It’s easy to treat these as interchangeable, but performance, or pay, marketing, has a few other points to consider. Let’s take a closer look.

Do the work to understand your ROI

Performance marketing ultimately begins with customer acquisition. Many companies invest in this on some level but don’t do the full work to understand their return on investment. For example, a company may say that they are spending a given amount on paid media, and it looks like they are having people come to their website as a result. However, in order to really excel, you need to understand the cost per click to hit your desired benchmarks.

Surprisingly, most companies don’t fully track their return on investment with performance marketing. Things that every company should be able to reference quickly are:

  1. Do you understand your costs for marketing?
  2. Do you know the closing ratio of leads you get from this marketing?
  3. What is the margin on the products that you use?

Why is this so important? As a business owner, you have a ton of options to invest a dollar of capital. If your growth engine is your area of focus, this generally means marketing or sales. Another common question is whether working to improve your social advertising/search ranking qualifies as performance marketing. Social media can be extremely effective at retargeting. For example, if a customer sees a given item on Facebook, there’s a degree of intent that can be established for visitors to your site. This technically qualifies as performance marketing, even if it’s not a PPC ad, per se.

Prioritize your spend with your first most efficient dollar

Let’s wind things back a bit. When a company decides to invest in performance marketing, where should its first dollar go? How do they know that they will see a return on it? This largely is dependent on already having the numbers that they need. What are the KPIs they are going to use and the goals they want to reach? This will show whether or not your investment turns into impressions, which turns into sales. In some cases, though, creating that foundation may be a bit murky, like channel sales as a goal metric. Make sure you have an array of KPIs to help compensate.

If your first dollar is in paid search, don’t set it and forget it

Finally, there’s a common misconception a lot of companies have about paid media and search. Many assume that this is a pay to play auction marketplace, and they need to be number one. This fallacy leads to many companies paying a high amount to be number one for a keyword or category. However, what you need to realize is that you can be in that 2 or 3 slots and still increase your sales by a significant amount. However, entering a bidding war with your competition ultimately cuts into your profit margin. Be sure to keep the quality score in the back of your head when it comes to ranking. Companies can improve their search placement but understanding what Google specifically wants to do, giving the user the highest-quality content possible. 

Performance marketing is ultimately an economic decision. You need to have a clear understanding of how much it costs you to execute different strategies, but also how much it can bring in to make sure you have the largest return on investment. Make sure that you follow the Mahdlo blog for more news and guidance on digital marketing and other business trends.

More Conversations

Top Three Success Drivers for CEOs

Top Three Success Drivers for CEOs

Leadership has always been a critical component of organizational success. In today’s dynamic business landscape, it’s more important than ever for companies to have strong leadership positions to make substantial progress and stay ahead of their competition. Leadership skills is a very broad term that is influenced by several different factors. In this article, we’re going to discuss the top three things that contribute to great leadership and drive success from a CEO standpoint.

Read More
Hiring And Retaining Your Rock Star Talent In A New World Of Work

Hiring And Retaining Your Rock Star Talent In A New World Of Work

To stay competitive, creating content to help customers build trust is paramount. Here are 4 ways to make content marketing effective in 2022.

In a world that is undergoing rapid digitization, content is king. It is what helps consumers understand what products and services brands are offering them. Content is what consumers resort to when making purchase decisions. It is a powerful tool that brands can use to show authenticity and transparency and use its knowledge-sharing nature to inform, instruct and eventually acquire customers.

Read More
Building A Purpose-Driven Brand

Building A Purpose-Driven Brand

Brands can naturally exhibit qualities such as transparency, and authenticity by being driven by a strong purpose to build consumer trust. What Is A Purpose-Driven Brand A purpose-driven brand is one that is driven by

Read More
Top 4 Ways To Make Effective Content Marketing Strategies In 2022

Top 4 Ways To Make Effective Content Marketing Strategies In 2022

To stay competitive, creating content to help customers build trust is paramount. Here are 4 ways to make content marketing effective in 2022. In a world that is undergoing rapid digitization, content is king. It

Read More