What is Performance Marketing?







The Performance Marketing (as well as the Performance Media) are becoming increasingly popular in digital strategies.

This is because Performance is revolutionizing digital communication.

This revolution is due to Digital Media providing predictability in the generation of results, which has generated more confidence in small, medium and large companies.

What is Performance Marketing?

Performance Marketing is a fully result-oriented, data-driven Digital Marketing discipline.

It has been one of the top and preferred forms of investment as it provides an effective way to measure return on investment using metrics like CPC, CPA, ROI, etc.

Performance Marketing is commonly associated with performance media, which is digital - usually paid - media that counts return on investment metrics as well as campaign and ad performance metrics with a multitude of metrics and dimensions.

Performance Media Democratized Advertising Without the Bad Part of Advertising

Imagine we lived ten years ago.

To advertise a company to impact a significant number of people was necessary to advertise on TV, newspapers and magazines.

And to do that, you had to have a large advertising agency.

The problem with that?

Funds to advertise on traditional vehicles must be millionaires, and moreover, they are not segmented.

In contrast, advertising on platforms like Google and Facebook is absolutely democratic and segmented.

That is, with few dollars of investment anyone in the world can create their campaigns.

Best of all, investments in performance media can deliver predictable results (especially when historical data is available.)

And all of this in a segmented way: You can show your ad only to those who will have the potential interest in purchasing your product or service, making the investment much more efficient.

Does it work? Digital Advertising in Brazil grows 25% per year and already moves R $ 14,8 bi

A recent Digital AdSpend survey  from IAB Brasil reveals that digital advertising in Brazil grew 25.4% and moved $ 14.8 billion.

This figure represents one third of the advertising market in Brazil, according to information from ExchangeWire.

If you would like to know more data from this study, see this article.

In the US, according to the IAB report, online advertising represents 23% of advertising investments and moves $ 49.5 billion.

There, adding TV numbers,  the budget is 13 percent lower  than the $ 49.5 billion invested in online advertising.

Still talking about the United States, last year media investment in search engines has been growing at an incredible 42%.

Knowing the Top Performance Media

Performance Media (also known as Digital Media) are vehicles that print customer ads, thus charging some kind of value.

Google Ads

Google Ads is Google 's ad platform that allows you to advertise in sponsored link formats, product list advertising (PLA), banner, video, etc.

Your ads appear on Google vehicles as your search engine, including Google Shopping, YouTube, Gmail, but also on millions of Display Network partner sites.

Facebook Ads

Facebook Ads is Facebook 's advertising platform and allows you to advertise obviously on Facebook itself and also on Instagram.

Recently, Facebook Ads has expanded its ad network to partner sites.

Instagram Ads

Works in conjunction with Facebook Ads, Instagram Ads is the usual definition for ads from one of the fastest growing social networks in Brazil.

Its main formats are boosting posts, ads with images, videos and, more recently, it has become possible to advertise in Stories (or “Stories”) format.

Affiliate Marketing

Affiliate Marketing is a separate story, but it can be included in the hall of performance media, as your investment is directly tied to the bottom line it produces.

Affiliate Marketing is a type of investment where you pay for the end result, usually a commission for the sales or leads generated.

Is SEO or Organic Search performance marketing?

SEO can be considered as Performance Marketing, although it is not Performance Media itself, since there is no media purchase to appear in organic search.

Performance Marketing works so well because it focuses on Company Performance

The great differential of Performance Marketing is that its actions are focused on the final result.

On e-commerce sites, for example, you can measure the Return On Investment ( ROI ) of campaigns.

On institutional sites, you can measure the impact of campaigns on lead generation, as well as other indicators of success.

Examples of Key Metrics for Performance Marketing

We've selected a few metrics that you can target your campaigns to:

CPM (Cost Per Thousand)

In this mode, the advertiser is charged the cost for thousands of impressions.

Ideal for campaigns focused on branding.

Cost Per Click (CPC) 

In this mode, the advertiser is charged the cost for each click that the ad receives.

Ideal for Campaigns focused on Traffic.

CPA (Cost per Acquisition) or CPL (Cost per Lead)

In this mode, the advertiser is charged the cost per Acquisition, which can be a lead, a purchase, etc.

Most platforms, such as Google and Facebook, do not commit to this result but direct campaigns to deliver the desired result.

Ideal for campaigns focusing on New Customer Acquisition.

Return On Investment (ROI)

In this mode, the advertiser may be charged on return on investment.

However, less and less vehicles work with this model because the sale depends on several factors.

So the point here is to optimize campaigns (on your own or with your performance agency) with a focus on this goal.

Ideal for e-commerce sites.

Working with complementary metrics

In addition, the above metrics can be combined with other complementary indicators such as:

Number of Users

The number of users is an important metric for measuring your traffic volume and indicators of your audience.

Of course, it's a very interesting metric, but without criteria it can become a vanity metric.

And what is a vanity metric? It's the one that inflates our ego but doesn't generate results (the best example of this would be a site that gets 1 million hits a month but doesn't generate business.)

New Users

The New User metric is complementary to the previous one and serves to measure how many new people are coming to your site.

This metric is especially good for companies that are expanding and want to reach more and more consumers.

Media that brings in a larger proportion of New Users can even be treated differently in your media plan.

Conversion rate

Conversion Rate is an important metric that serves to measure the proportion of users on your site and the achievement of goals (conversions).

Website Time

Quality is everything! The Time on Site (or Time on Page and Session Duration) metric serves to measure the quality of the interaction.

Theoretically, the longer a user invests in your site, the more attention they are giving you.

What is a Media Plan? Learn about the tool that will help you achieve better results.

Media Plan is a tool that integrates all media that a company will invest over a given period.

Media plans can basically be assembled into Excel spreadsheets because they should be as simple as possible - and likewise bring a strategic vision.

At Conversion, we believe a good media plan should bring each of the vehicles targeted by their respective ad formats and primary goal to be achieved.

In addition, a good media plan should contain periodic goals for each action to be taken.

Generally, media plans are monthly or may even consider the length of a campaign.

What is a Performance Agency? Should I work with one?

Performance Agency is a type of digital marketing company that focuses on performance marketing campaigns.

In short, they are agencies that specialize in traffic management to achieve your client's goals.

Performance Agencies, as they work primarily with digital media campaigns, often have expertise and excellence in generating digital marketing results.

Always count on digital performance experts

If your company is not knowledgeable and has a considerable budget, it is absolutely essential to have a digital agency to be your partner in performance.

The Conversion is a Performance & SEO agency, which serves customers in medium and large; If this is your business profile, please contact our new business team.

Conclusion

As we can see, in Brazil and around the world we are experiencing a revolution in advertising investments and Performance Marketing is a major responsible for this.

As we have seen, Performance Media has democratized access to advertising so that small, medium and large companies can invest and achieve measurable results.

However, with so much change we have seen that it is crucial to have experts (usually it will be a Performance Agency) and work with Media Plans.

Choosing the right vehicles, having assertive communication and good management will bring the results.