Businesses must have a clear plan for creating a successful performance marketing campaign. Your campaign should be based on goals and measurable results such as clicks, sales, leads, etc. It has become a dominant approach that companies use for connecting with their customers. It helps in running a highly targeted campaign that delivers measurable results. ROI is the core metric used for measuring the success in performance marketing.
Performance marketing is less risky, as you pay only when your specific goals are achieved. Also, because the data around your campaign is transparent and measurable, it is easy to make adjustments and optimize for desired results. Do you know personalized experiences are more effective with customized CTAs?
In this article, we’ll learn the benefits of performance marketing and how to measure performance marketing. Also, we’ll look at the examples of effective performance marketing campaigns used by big brands!
Benefits of Performance Marketing
Digital marketing is growing at a fast pace, wherein performance marketing has huge scope to scale your business when you fully adopt it. Here are some of the reasons why you must invest in performance marketing.
- Brand awareness: In performance marketing through affiliates and agencies, you can have a wider reach because it allows you to interact with their established customers. You can reach new potential customers and increase your website traffic.
- Reduce Risk: Affiliates are paid only after a desired action is completed. Hence, CPA, Cost Per Acquisition, will be lower and will boost your ROI. It allows you to spend your budget and resources on other important tasks. You can expand your other performance marketing strategies as well.
- Trackable Performance: Performance marketing is transparent and easily measurable. Brands can monitor the entire click-to-consume path of each buyer. You can learn where you should invest more resources. Also, identify which channel partners can produce better results.
- Scalability: Performance marketing campaigns can be scaled up and down easily. This makes it easy to adapt to changing market conditions and enhance decision-making.
- Targeted Messaging: Performance marketing lets businesses create targeted messages that resonate with their audience and enhance the chances of conversion.
How to Measure Performance Marketing
ROI is central to performance marketing; every action can be traced, monitored, and measured against key performance indicators (KPI). It can be anything from the number of clicks, page views, etc are important for measuring and improving performance. Here are some of the metrics and KPIs that you must measure.
- Cost Per Acquisition: It is the amount a retailer pays when consumers complete a desired action, such as a sale, clicks, etc. In e-commerce, it is the most important payment model used.
- Pay Per Click: It is the price a retailer pays an affiliate for any ad click. It can be used on landing pages whenever a customer clicks a link.
- Pay Per Lead: Lead is a completed form registration or signup that includes information about the customer, such as name, mobile number, email, etc. It helps in follow-up and boosts sales.
- Lifetime Value: This metric helps in predicting the lifetime value of a customer throughout their relationship with retailers. Using predictive analytics, LTV helps in predicting how much a customer will spend based on their activities and actions with the brand.
- Pay Per X: In this payment model, X represents whatever the merchant defines as a desired action other than lead, click, etc.
Examples of Effective Performance Marketing Campaigns
Here are some examples of effective performance marketing campaigns
- Airbnb: The 2021 Airbnb campaign, “Made Possible by Dreams,” leaned on user-generated content in its video Forever Young. The slideshow-style video shows renters having a great time at Airbnb. It features their trip photos on top of a sentimental soundtrack. Other than highlighting the property, it focused on the feeling renters have when they book a weekend trip with Airbnb. Globally, the campaign brought 17 million views across Airbnb’s platform. Invest in video content because video helps in telling a more compelling and emotional story. Create mute-friendly content that users can watch without subtitles. 75% of people view mobile video with sound off. These types of content serve as valuable social proof of the good time the renters will have at Airbnb.
- UNIQLO: It is a Japanese retail company that sells casual clothes. It wanted an innovative way to spread awareness about its HEATTECH clothing in the Australian market. It created an omnichannel experience that encourages both in-store and online shoppers to participate in giveaways. UNIQLO installed digital billboards at 100 locations throughout Australia, as well as the same video on their social media platforms such as Facebook, YouTube. The billboard and video encourage people to snap a photo of a unique code and upload it to the UNIQLO campaign page. After educating the consumer about HEATTECH, UNIQLO displays a free t-shirt deal or e-commerce discount code. From there, digital marketing nurtures leads and encourages them to sign up for the UNIQLO newsletter. It gathers 1.3 million video views, 25,000 newsletter subscribers, and 35,000 new customers. It helps in creating buzz with free discounts. It lets customers share their experience.
- American Express: It is a large credit card company that creates credit cards for businesses. In 2007, the company positioned itself as an authority on business to enhance seo and attract more business companies. American Express created the OPEN forum, which invited experts from different industries to create guest posts. The campaign was all about collaboration. It helps American Express create high-quality content on marketing, sales, entrepreneurship, etc. The cost was entirely outsourced; American Express didn’t need to invest in producing material internally. Guest collaborators promoted content to their network, which boosted the reach of the company. American Express still continues the OPEN forum today under the name Trends and Insights. It helps in encouraging positive word of mouth and boosting content sharing. It also expands your enterprise across verticals and helps in building a community.
- Red Bull: Red Bull is a marketing energy drink that markets itself through adventure and sponsorship of extreme sports. In 2012, Red Bull’s digital marketing campaign called Stratos excited everyone. Red Bull live-streamed a video where a man broke the Guinness World Record for free-fall skydiving by jumping from space. This campaign was about surpassing human limits, but it extended beyond the brand’s expectations. It generated an impressive 6.8 million views on YouTube. Livestreaming creates a sense of immediacy and community. It leaned into entertaining content over brand promotion. The Red Bull digital broke several records as it built suspense in the story up to the main event.
- Sephora: One of the reasons why Sephora is famous is that its digital marketing campaign focuses on omnichannel presence. The Sephora app mimics the in-store shopping experience. Its artificial intelligence (AI) and augmented reality (AR) tool allows shoppers to try cosmetics and their look from home. This app connects to Sephora’s ecommerce platform, which makes it easy for shoppers to check out with a few taps. It uses application engagement data and geolocation data to customize suggestions in the app to boost conversion. It creates a rich experience for the users. Its omnichannel presence makes it flexible. With the help of data, you can personalize the experience.
- Lyft: It is a rideshare company based in the United States. Due to fierce competition from Uber, Lyft needed to convert its riders into brand advocates. They wanted to mobilize their riders into an affordable, ready-made salesforce that boosted the Lyft platform. Lyft’s referral program allows users to invite riders via the app, email, etc. A maximum $2,000 per week in free rides, high limit incentivized users to promote lift. It utilized the power of formalized referral programs. Also, offer valuable incentives that motivate users to act. It also offered a simple “share” button that made it easy to share the referral code on social media. Each referral account has its unique code, which helps in the easy tracking of the performance.
Performance marketing offers a great hope to business owners looking to engage and convert new buyers at a low cost. For many brands, it is an interesting yet challenging time to be a marketer, considering the budget pressure, rising expectations, changing market conditions, etc. However, if you utilize performance marketing strategies effectively, then you can use it as an opportunity. Lumia 360 offers digital solutions to small and medium-sized businesses. To know more about our solutions and strategies, email us at info@lumia360.com or call us at 514-668-5599.
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