What is Performance Marketing
Performance marketing is a comprehensive term in digital marketing or advertising when the marketers are paid only after a certain action is performed. The actions vary from click or lead generation to sale and more.
In the traditional marketing approach, the companies paid for the marketers’ effort with the hope that they will get the result they expected. However, performance marketing has a different business model. In Performance marketing, the customer pays only for the actual performance of a specific action. In traditional marketing, the results can be planned but they are not guaranteed whereas in Performance marketing the companies pay only for the result of a certain marketing action. Also, performance marketing will save the expenses for vanity metrics, such as reach.
Performance marketing specialists rely on different paid marketing channels, such as sponsored advertising, native advertising, affiliate marketing, search engine marketing and social media advertising.
There are certain principles on how performance-based marketing operates.
- Setting SMART goals. All the goals set in the performance marketing approach are specific, measurable, attainable, realistic and time-based. Also, all these goals are assessed differently. For example, attracting 1000 new visitors to the website and growing conversion number three times will be worth a different price.
- Choosing the right channels. To fulfil your goals effectively, you need to decide which marketing channels it’s best to use. Each channel has its own specifics which should be taken into consideration when performing a certain marketing action.
- Preparing the necessary content. Depending on your chosen channel or channels and B2B SaaS target audience you need to develop your content strategy. The type of content needs to be appropriate for the channel and appeal to the target audience. It can be a blog aimed at native advertising or a search ad copy leading to the landing page.
- Constant optimization. During the implementation of your campaign, you need to analyze your data. This will allow you to identify the most effective marketing practices that can be used more further on to bring better results.
How do the platforms operate
Each marketing channel has a specific audience and provides various types of advertising platforms to engage with them. Some of the most common platforms include:
- Facebook, the social media channel with the biggest number of audience. It provides various opportunities for advertising on both Facebook and Instagram social media channels.
- Google, the biggest search engine. It can display your ads at the top of search pages and across the Google Ads network.
- Taboola, a frequently visited content discovery network. It has a tens of thousands audience of online publications which provides a great opportunity to find and engage your B2B SaaS target audience.
How do the platforms choose what ads to show
The channels cannot show all the ads available. There are several factors that are come into play when choosing what to show:
- Target audience segmentation. The ad platforms allow you to segment your target audience. This will help your B2B SaaS improve your targeting results in advertising.
- Payment bid. Depending on your payment bid, you will be able to choose the frequency with which your ad will be displayed as well as the specific place and time it will be shown to your B2B SaaS target audience.
- Quality ratings. For any advertisement to work, it needs to be of good quality. Otherwise, your target audience will leave it unnoticed. This will affect your quality ratings and the channel will reduce its exposure.
- Conversion rate. In performance marketing, the employees get paid for the end result. Usually, it is a conversion rate. Your ad may attract many visitors, however, it does not mean that it will lead to a high conversion rate. Therefore, it needs to be not only eye-catching but convincing as well.
What Does a Performance Marketing Agency Do
As Performance Marketing is becoming more and more frequently used in B2B SaaS, new marketing agencies that specialize in Performance Marketing appear. Performance Marketing agencies use pay-per-action digital marketing channels and analytics for tracking the results.
There are different Performance Marketing channels that the agencies use. However, here are the most important ones:
- Native advertising. Content discovery programs allow your B2B SaaS to significantly scale your reach by click-through to landing pages via the publisher’s websites.
- Sponsored content. This is another form of native advertising. It does not instantly bring traffic offsite but to the page on the publisher’s site. Sponsored content is especially useful for increasing the owned media of B2B SaaS and can help to reach the target audience who tune out from the traditional ads.
- Search engine marketing. It offers pay-per-click programs for Google and Bing which help to accelerate the exposure of B2B SaaS via their results pages using keywords. You can also use SEM ad programs to provide high commercial intent and optimize your ROI.
- Social media advertising. Ad programs on Facebook, Instagram, Twitter, LinkedIn and other social media channels help performance marketers to target prospects accurately and gain high exposure with organic posts.
- Affiliate marketing. This is a type of free advertising that offers to establish a relationship with an advertiser to produce traffic and an agreed action. Affiliates send your B2B SaaS traffic to advertisers and get a commission for the agreed action. They are a great extension to your B2B SaaS advertising as you can also sell your service on the affiliates’ sites.
Key Performance Marketing Metrics
As Performance Marketing is about paying for action, there are various metrics on how it can be evaluated. Some of the most common include:
- Cost per Impression – This metric evaluates the amount an advertiser pays a publisher for every 1000 times the ad appears in front of the target audience
- Cost per Click – It is the amount an advertiser pays for the times their ad is clicked on.
- Cost per Sales – This metric assesses the amount an advertiser pays for the sale when it is directly generated from an ad.
- Cost per Leads – It is the amount of money paid by the advertisers when they get a lead who signs up as a result of an ad.
- Cost per Acquisition – This metric shows how much the advertiser pays for a specific action, such as a click, form completion or a sale.
It’s important to note that all these metrics measure advertising objectives. However, to analyze the overall effectiveness of performance marketing you also need to take into consideration campaign goals, the chosen platforms, costs and the received results.
Performance-Based Email Marketing
Email marketing can be easily measured. That’s why it works well with performance marketing. In performance-based email marketing, the advertisers can be paid for the opened emails, clicks or subscriptions. Here are some insights that will make your email marketing campaign achieve the most effectiveness.
- Be engaging and remember about your target audience. Your B2B SaaS customers want to receive personalized and interesting information. You can include your name and then “from (company name)” in the “from line.” This will make your emails more personalized because after all these are people who communicate on behalf of companies. Also, your subject line should be engaging so as to keep your recipients interested in reading the email. Moreover, your emails should include relevant and useful content.
- Quality is more important than quantity. You may decide to send your B2B SaaS target audience a new letter each week. However, if you don’t have the capacity to send your emails so often you can do it more rarely. Just be consistent and try to send it at the same time of the day so that your prospects will know when to expect emails from you. For improving your email marketing performance, your emails should be direct and useful for your B2B SaaS target audience.
- Keep your recipients’ list updated. To be effective in performance-based email marketing, you need to review your recipients’ list from time to time. If you don’t do it your sender reputation may suffer. If your emails are not opened or sent to spam, you may be blocked by the email service. Therefore, your recipients’ list should only include the prospects who will be interested in your email campaign and your B2B SaaS.
Automated Performance Marketing
Since performance marketers are paid for the effectiveness of a specific action, automation is particularly relevant for them. Automation helps them not only to achieve more effectiveness but also optimize ROI and improve customer experience. There are many benefits of using automation in performance marketing. Here are some of the most salient ones.
- Shifting the focus to strategy. Tactical tasks, such as content scheduling and market analytics, may take much time. However, with automation, your attention can be focused on more strategic points. You will also save much time by automating tasks that otherwise would require much effort.
- Timely customer response. To keep your prospects engaged even when your marketing specialists are not available you can develop automated responses on emails or via chatbots. Otherwise, your prospects may lose interest in your B2B SaaS and visit your competitor’s page.
- Optimized ROI. Performance marketing automation allows you to optimize your ROI. You can save many costs for having human resources work on some data collection or analysis. Also, automation allows you to save budget on repetitive marketing actions. This budget can be spent more effectively for results analysis and making your B2B SaaS marketing strategy more effective.
There are many marketing automation services. Here are just a few of them to consider.
- Marketo. This service is used by thousands of performance marketers. It provides email automation, campaign management, lead generation, visitor tracking, budgeting tools and personalized messaging.
- HubSpot. It is a well-integrated and user-friendly service. It offers a content management system, performance monitoring, email marketing and real-time analytics.
- Customer.io. This service provides accurate data on customer profile. It also focuses on communication. It uses customer behavior data to create engaging emails.
Content Performance Marketing
It is an intersection of content marketing and performance marketing. In content performance marketing, advertisers create and publish content that will attract your B2B SaaS target audience. Simultaneously, they constantly work on measuring the effectiveness of the content strategy and content optimization. There are three pillars of content performance marketing.
- Target audience demand. The advertisers analyze the platforms their target audience may use and where can they find out about your B2B SaaS. They also research the type of content your B2B SaaS target audience will most likely engage with to know how to attract them.
- Performance analysis. When engaging content for your target audience is created the data on its performance is analyzed. This is done for making your content strategy even more effective.
Content optimization. Once you’ve measured the performance of your content, you can think about the strategies of its optimization to eliminate guesswork and improve your ROI.
- Content optimization. Once you’ve measured the performance of your content, you can think about the strategies of its optimization to eliminate guesswork and improve your ROI.