If you feel that your advertisement campaigns are not generating a meaningful ROI, it is time to switch to performance marketing.
Performance marketing is a term used to refer to digital marketing and advertising programs where advertisers are paid after the completion of a particular action. This action might be a click, a lead or even a sale.
In Singapore, performance marketing has revolutionised the sales and marketing industry. Companies are now heavily reliant on data collected from their target audiences, as it helps with the optimisation of advertising campaigns. Simply put, performance marketing is useful in decreasing the cost per acquisition and improving ROI.
Additionally, performance marketing has also made it easier to gauge the success of marketing campaigns. It is currently easy to measure every aspect of marketing, such as organic reach, lead generation and conversion, rates, all thanks to the increasing adoption of performance marketing.
The Evolution of Performance Marketing
Over time, technology advances and consumer behaviours change. Companies have to keep up with these changes or risk losing their competitive edge. As a result, performance marketing strategies that were useful in the past are no longer effective.
The success of digital marketing campaigns currently depends on two factors – your target audience and the timing of the message. If you deliver the promotional message to the right audience at the wrong time, your campaign is likely to fail. One cannot do without the other.
Moreover, the majority of people now favour handheld devices over desktop computers. This means that markets should primarily target mobile devices when setting up their marketing campaigns.
Types of Performance Marketing Ads
The objective of performance marketing is ensuring that you pay for what you get. As mentioned above, you only pay after the completion of specific actions, namely impressions, clicks, engagements, leads, and sales.
Impressions refer to the number of times your target audiences see your ad listing. These usually have lower fees than other performance marketing actions, as it is hard to predict the number of views an advert will get. Also, impressions have a lower level of engagements.
Clicks are mostly used in marketing campaigns where the primary objective is to increase website traffic. The budget for this depends on the click-through rate (CTR). The higher the CTR, the more you pay.
Engagement covers a lot of actions. In the context of a social media platform, it can include likes, comments, views, and shares. Engagement-based marketing campaigns are mostly sold by social media advertising channels, such as YouTube Ads and Facebook Ads.
A lead refers to any individual that is interested in your prices and services. In this case, you will pay every time the lead fills and submits opt-in forms on your website. This option is popular among B2B companies.
With sales, an advertiser only pays when a customer purchases an item from their business. Sales-based ads are the most expensive of the lot. E-commerce websites favour them.
Popular Performance Marketing Channels
Accountability is one of the critical principles marketing of performance marketing; this means that the channels you use should allow you to measure the impact of consumer actions.
The most prevalent performance marketing channels in Singapore are native advertising, sponsored advertising, affiliate marketing, social media marketing, and search engine marketing.
As dreadful as it sounds, the majority of people in your target market see constant ads as a nuisance. This explains the increasing number of people deploying ad blocking software in their web browsers.
Native advertising is an excellent strategy to generate traffic from websites where your target audience consumes their content. It is by far the most effective form of online advertisement, getting as much as ten times more clicks than its closest competitor.
The key to a successful native advertising campaign is offering quality content that is valuable to users. It also requires the use of smart distribution strategies to ensure that such content reaches the appropriate audience at the right time.
Sponsored content is different from native advertising in that the ads are in the form of articles, rather than display banners. Usually, sponsored articles appear on platforms that are trusted by the audience which you are targeting in your marketing campaign. For instance, an upcoming business could feature in an authority website in its niche.
Sponsored articles allow brands to engage with consumers in environments they are already familiar with – the websites that they frequently visit to get news, information and entertainment. If your business appears on a popular site, you benefit from increased brand awareness, more web traffic, and ultimately higher conversion rates and more sales.
In affiliate marketing, the affiliate gets paid when an individual they refer to a business purchase in an item from that business. They could also get paid for generating web traffic or leads, depending on the agreement with the company. Affiliates are essentially an extension of your brand that use their website to sell your products and services.
In most cases, the advertiser runs an e-commerce store, whereas the affiliate can be any website owner. The affiliates often embed links to your products within organic content.
Social Media Advertising
After Google, social media platforms are the most popular websites on the internet. Concerning performance marketing, social networks are an invaluable tool, as it is relatively easy to measure results and organic reach on them.
Social networks allow you to measure key performance indicators (KPIs) such as click-through rates, cost-per-click, and your overall ROI quickly and accurately. Similar to other marketing campaigns, social media advertising start with the setting of objectives. These goals include increasing traffic, improving engagement levels, generating leads, and increasing sales.
After identifying and setting your goals, the next step involves choosing a social network to run your campaign. The demographics of the network you choose should align with your business needs. For instance, if you are targeting professionals, you should use LinkedIn.
Other factors that influence the social media you choose to market include your popularity on the network, the level of competition, and the type of ads supported by the social network.
Search Engine Marketing
Search engine marketing (SEM) is a collection of strategies that aim to increase the visibility of a website, both organically and using paid methods. In the context of performance marketing, SEM focuses on paid methods.
SEM is the most popular method of performance marketing. In 2017, Google Ads, the world’s leading paid search platform, generated a revenue of $95 billion. The proponents of SEM argue that this tactic allows them to display ads to consumers whose primary intent is buying a product are a service.
If you want to run a successful SEM campaign, you need to invest your time and resources in keyword research. This allows you to identify the search terms and phrases that prospective buyers like to use. When you bid on such keywords, you increase the chances of making sales. That said, high-intent keywords that include terms such as a discount, free shipping, and buy tend to be more expensive for obvious reasons.
Also, before you start an SEM campaign, it is crucial to understand how the bidding for keywords works. Every time a user enters a particular search query, an auction takes places. Advertisers begin the auction by identifying the keywords they wish to bid on, and the pricing of a keyword depends on its competitiveness.
How Performance Marketing Works
Although digital marketing performance varies according to the channel you choose, some factors cut across all platforms. These factors determine how high and frequently gets displayed on these platforms. They include audience targeting and segmentation, bidding, quality and relevance, and conversion.
Each performance marketing channel offers you ways to target a particular audience. For instance, you can tailor your ads to target a specific population, age group, gender, or a location, like Singapore. This determines where and when your ad appears.
In most advertisement channels, the competitiveness of a keyword determines its price. This means that you must bid a higher price for high-intent keywords as compared to generic keywords. In return, your ads get more prominence on these platforms.
Many people are not comfortable with ads because of trust issues. As a result, advertising platforms factor the performance of individual listings when raking the ads. If many people are avoiding your ads, they earn a low rating, and the network reduces its exposure.
The ultimate objective of any marketing campaign is converting leads into purchasing customers. When your ads have low conversion rates, it means that the advertisement platform does not get paid. Consequently, the marketing channel will not display your ads as high as the ones with high conversion rates.
How to Implement Effective Performance Marketing Strategies
As is the case with other forms of marketing, performance advertising is only useful if you implement effective strategies. Using a generalised approach will only yield poor results, and even worse, it might cause massive losses for your business in Singapore.
If you want to have a successful performance marketing campaign, here are some strategies you should implement.
Target Smaller Segments
If you target smaller audiences, you can specialise your ads even further. The more precise your ad is, the more relevant it is to your audience, and this increases your chances of making sales.
When targeting your ads, prioritise the customers that are at the bottom of the funnel (the ones that are not well acquainted with your products and services). The first step to a successful ad campaign is increasing brand awareness, and there is no better way than targeting those who know nothing about your company.
Alternatively, you can choose to target customers based on demographics. Most ad platforms allow you to target specific locations such as Singapore, age groups, gender, and so forth.
Use Single Keyword Ads
It is difficult to resist the temptation of using multiple keywords. A common misconception is that using many keywords increases the chances of ranking higher on SERPs. On the contrary, this strategy often backfires.
When you choose multiple keywords, you are asking Google to rank you on numerous SERPs. This means that a single ad can contain several keywords, which counts as keyword stuffing. Over time, it harms your quality score and ad ranking.
Instead of using multiple keywords, use single keywords in your ad copies. This stagey enables you to focus on one aspect without stuffing. As a result, you get a better quality score, a higher ranking and more clicks.
Write Compelling Headlines
A compelling headline is a proven tactic of grabbing the attention of the reader. this applies whether you are writing an article or an ad. The best way of coming up with a headline is thinking from the consumer’s perspective. Tell them why they should read the ad.
Go Beyond the Popular Ad Platforms (Google and Facebook)
Most business owners in Singapore advertise on Facebook and Google for one reason –their popularity. While this is perfectly fine, the level of competition on these platforms is exceptionally high, especially for startups and upcoming companies.
You can, however, avoid this competition by advertising on smaller niche networks. This way, you are guaranteed of reaching your audience, meaning that your marketing performance will generate a better ROI.
If you are targeting high-earning professionals, consider advertising on LinkedIn. You can also use tools such as BuzzSumo to see the sites where your competitors’ content is popular, as well as their best-performing content.
Timing is Critical
When you create an ad, you do not want people to see it merely – you want to drive them to your website and convert them into customers. The timing of an ad is crucial in influencing people to take the desired action.
For instance, a person who sees your ad during the day is likely to click than an individual who sees it at night, or vice versa. If you know the times when your ad gets the highest click-through rates, you can use bid multipliers to buy those times. This way, you increase the chances of converting leads into customers.
Once you schedule your ads, remember to keep track of your campaign and see whether the strategy is working. You can then make adjustments accordingly.
Use Remarketing Lists for Search Ads
Bidding on popular keywords is a double-edged sword – it can turn out to be a masterstroke, or it can backfire massively. If you get it wrong, you will lose lots of money, and your quality score will also suffer.
A smart way of using popular keyword phrases without the risk of filing is by using remarketing lists for search ads. In this case, your ads will target users who have visited your site previously. Remarketing that ensures that you do not waste your money, as the users are already familiar with your brand.
Remarketing lists can also give you an edge over your competitors. When people who are comparing your business to competing brands search for those brands, your business will appear on top of the search results.
Advantages of Performance Marketing
Here are the benefits of adopting performance marketing for your business in Singapore.
Easy Measurement of ROI
Unlike other advertisement strategies, it is relatively easy to measure the ROI in performance marketing. You can track the actions a user takes on your site using pixels and cookies. Using this information, you can determine whether you are getting profits or making losses.
Improved measurement assists with the optimisation of marketing campaigns. When you see that particular actions are generating excellent results, you can allocate more money to them. Similarly, you can cast aside actions that are not contributing to increase conversions for your business.
You can also configure your system such that it automatically stops unproductive strategies. This reduces wastefulness.
No Opportunity Costs
In some cases, marketers have to forego some strategies for the better of others. Performance marketing eliminates the need for opportunity cost by minimising the risks and allowing marketers to estimate the price of a campaign before it starts.
A Variety of Channels
You can implement performance marketing strategies across various platforms, such as social media, Google Ads, and email, and so on. If one fails, you can always try out another channel.
Potential Pitfalls of Performance Marketing
Similar to other marketing strategies, performance marketing has its challenges and shortcomings. The most prevalent issues include regulatory compliance, fraudulent advertising channels, and non-transparency during ad placement. Luckily, multiple fraud detection tools can assist in averting such problems.
Performance marketing provides an excellent way of managing your advertisement budget while getting the required results. However, you have to be smart to run a successful marketing campaign.
Before you start engaging in performance marketing, ensure that you have set your goals. Irrespective of your objectives, setting goals ensures that you optimise your ads for specific populations, locations and the times when they will appear on various channels.
The real work sets in after you set your goals and choose an advertisement channel. The performance of the strategies you implement should guide you on whether to persist or make adjustments.
High-performing campaigns should get a higher budget. Low-performing campaigns should either get improvements or get discarded altogether. Remember, analytics are vital if you want to improve your ROI.