CPM, CPS, CPL, CPA - behind these acronyms there are various types that performance marketing includes. Below is an elaboration and examples of the use of such tactics in the network.
For decades, sellers have been working in return for a percentage of sales, i.e. commission. Today, a similar model is also used on the web. This significantly lowers the advertising expenditure and increases its effectiveness.
What is performance marketing?
Most buyers admit that they rely most on other people's opinions before buying. Formerly, they were relatives and friends. Currently, they are more and more often bloggers, influencers or Internet portals and the whole inbound marketing. In the deluge of goods and services, it is very difficult to orientate yourself. Customers want to buy quickly and do not have time to compare offers. So if they find a link to the store in a blog entry or get a discount code from their favorite instagrammer, the probability that they will do their shopping there is significantly increased.
Performance marketing is one where you pay for the results. It can take several different forms:
- CPC - you pay only for clicking on the ad (Cost Per Click),
- CPM - you pay for every thousand ad impressions (Cost Per Impression),
- CPS - you pay only when the customer enters the store through the advertisement and makes a purchase (CPS),
- CPL - you pay only for subscribing to the newsletter, webinar or submitting a request from a customer who came to you through an advertisement (Cost Per Leads),
- CPA - you pay for the effect that you set earlier - e.g. liking a profile, clicking, filling out a form, etc. (Cost Per Aquisition).
The range of types of such advertisements is very wide. Within each of them (CPA, CPL, etc.), there are dozens of ways to connect the goal of the marketing campaign with the platform. In fact, the number of types of performance marketing is practically endless. All the time there are new platforms, types of cooperation and tools that allow you to measure the effects.
Do you want to implement efficiency marketing?
We will help you plan it well!
How to use efficiency marketing?
In fact, you can plan your performance marketing like no one has ever done it before. What the campaign will look like depends on the marketer's fantasies, the type of product and the opportunities offered by the platform. It is worth remembering that on Instagram, TikTok or Facebook, new sales and affiliation opportunities appear all the time. It is similar with search engines. Other features change over time or lose their effectiveness. Therefore, efficiency marketing is not a solution that can be used "from a template" and count on results.
The beginning is of course always the same: marketing audit and setting a goal that you care about. Here, precision and good planning count. Then you need to choose the spaces where it will be easiest for you to achieve these goals. Company communication strategy may include performance marketing of various types, seamlessly connected with content marketing and other online activities. The final stage of the campaign is measuring the results. Without it, you won't know what works and what doesn't. On the one hand, it means constant analysis and the necessity to make constant modifications to the strategy. On the other hand, modifying ads on the fly allows you to save even more (and you still only pay for the action performed - a click or a purchase).
When you see that a given platform or content is ineffective, you can quickly change it. By releasing test series Google Ads You can see almost instantly what's working and what's not working on Facebook ads. You can give up on less effective solutions, move your budget and perfect ideas that have worked.
Examples of types and applications of performance marketing
There are many types of such marketing campaigns. In addition, new ones are constantly appearing. Performance marketing can be:
- affiliation - the online equivalent of the former commission. A travel blogger may link to a ticket search engine in the text. An Instagramer can get a percentage from every purchase someone made with a special code. Theoretically, they care about the most effective work, because it depends on whether they will receive a commission.
- advertising on social media - you pay for each display, click on an ad or move from the ad to the store. This is especially effective for small purchases and in the wellness or beauty industry, where expenses are relatively low and purchases are made on an impulse.
- native advertising - it looks neutral, so the reader or viewer treats it differently than traditional advertising. The best example is the famous selfie at the Oscars by Bradley Cooper. There are, among others Meryl Streep, Brad Pitt and many other celebrities. The photo was reprinted by portals and newspapers all over the world. The curious ones noticed that it was made of a specific phone model. Who wouldn't want a phone like the stars?
- sponsored content - sponsored video or entry with a discount code or the ability to go directly to the store.
- Google Ads - today it is not only simple ads, but also product lists, videos, highlighted texts and many more.
When is it worth using performance marketing?
Performance marketing will work under several conditions. It is clear that you must have a goal for such a campaign. However, the goal itself is not enough. Ask yourself what the effect will be, i.e. what you will achieve.
For example, a thousand impressions of an ad could translate into zero profit if the ad is not incentive and customers do not move on to complete their purchase. On the other hand, you may be paying unnecessarily for each purchase if its value is so low that it barely covers the cost lead. There are many variables at work here, and it all boils down to one thing: do the adopted assumptions correlate with the goals your company sets itself.
A few years ago, there was a lot of talk about the unsuccessful cooperation of brands with bloggers or cupcakes. The blogger gave his fans gifts, discount codes or included an affiliate link in the post. The company paid a fortune for cooperation and ill-defined effects - e.g. every click on their advertisement or entry to the store. In the end, it sometimes turned out that the high-profile campaign did not translate into any results. Sometimes the blogger and his audience did not match the brand profile. On other occasions, the planning phase failed or the offer was not interesting enough to persuade people to buy. On the other hand, there are campaigns when the ad reaches a well-defined and narrow group in which conversion reaches several dozen percent. This shows that it is worth investing in performance marketing, but only consciously and with a clear purpose. contact us - our experts know how to do it.