Many companies have employee referral programs.
The concept is simple: If you refer someone eventually hired, you will earn a reward (usually a cash reward). It’s a win-win – HR has qualified candidates while employees feel motivated to assist in the search process.
A common warning is that if an employee leaves the company for a certain period of time, the reward will be void. Why offer a commission if a company doesn’t see a return on their investment? This is the same principle behind performance marketing.
Let’s dive into how performance marketing works, its benefits, and the tools you can use to implement it in your strategy.
What is performance marketing?
Performance marketing is a commission-based tactic in which advertisers only pay when a user has met the conversion goal. This can be anything from making a purchase to filling out a form on a landing page.
With the traditional advertising campaign approach, there’s no guarantee you’ll get a return on your investment. Once your ad launches, you can simply track its performance and make adjustments.
The faster you identify areas that need improvement, the faster you have a chance of maximizing return on advertising spending (ROAS). But even seasoned media buyers can have unsuccessful campaigns if there is a discrepancy between the campaign and the target audience.
Performance marketing puts its power back into the hands of advertisers. Because you will only pay when your goals are met, you accomplish three things:
- Your campaign is less risky
- Have a guaranteed return on investment (ROI)
- You have greater control over your ad spend
Is affiliate marketing the same as performance marketing?
Short answer: yes and no.
Think about it affiliate marketing as a subset of marketing performance. The terms are often used interchangeably. However, performance marketing has grown to cover even more affiliates over the years.
It also includes campaigns that use a pay-per-click (PPC) model, such as paid search.
How Performance Marketing works
There are three main elements needed to execute a performance marketing strategy:
- A publisher or affiliate partner
- A conversion goal
- Commission rate
You, as an advertiser, will be looking for an affiliate partner, possibly one affect or the publisher.
Then, you must outline your conversion goals. Let’s say your marketing goal for the quarter is to reach 10,000 leads. You can instruct your partner to direct traffic to your landing page, and they will earn commissions only when the user has filled out the form.
Your next question might be, “How do advertisers know which users are from which affiliate? “ Advertisers typically give each partner a specific link or code to track who is responsible for that conversion goal.
For example if I am an influencer and I cooperate with Brandon BlackwoodI will share the 10% discount code “MARTINA10” with my followers to use at checkout when purchasing an item from the brand. Every time someone uses my code to make a purchase, I get a percentage of the sale.
Today, performance marketing is most popular with influencers, like from research Consumers trust influencers more than brands.
Before the influencers, there were online publishers and they were still big players in performance marketing. If you search for “Top Performance Marketing Tools” on Google and visit an article, it’s likely that one of these tools could be an affiliate link.
How can you know for sure? Currently, the Federal Trade Commission (FTC) requires affiliate partners to disclose their partnership with consumers. On Instagram you’ll see a “paid partnership” tag, like this:
On YouTube video sites and descriptions you’ll see link unit disclosures, like these:
How to create a performance marketing strategy
1. Determine your goals.
With any digital marketing campaign, setting your goals is key.
What do you want to do? It could be brand awareness, sales for your new product line, more leads, or something else.
Return to the world where I am an influencer. Suppose Brandon Blackwood has just launched a new product. Their marketing goal is to raise awareness about new products and drive traffic to the product page to generate sales. In this case, their primary metrics would be website clicks and unique sales.
As you define your goals, you can develop your advertising strategy and determine which metrics to track.
2. Identify your partners.
Now that you know what you want to achieve, start looking at online publishers and social media influencers with the right audience for you.
Identifying the right partner will require extensive research but this is arguably the most important step.
Imagine working with a partner whose audience isn’t interested in your brand or product. While they can be interactive on some levels, they probably won’t.
And while you may not lose money, since they need to take a specific action, it will be a waste of your time and resources.
After determining who you want to work with, contact them to see if they are interested in the partnership. In this step of the process, you’ll discuss your marketing goals, target audience, and commission rates. While some brands have standard prices, others are negotiable.
3. Create and assign IDs.
You strengthened your partnership. Now it’s time to get your links and code ready to share with your affiliate (s).
The only way to correctly attribute an action to a particular partner is to specify a custom ID, code, or UTM parameter.
It’s important to note that while you can do this manually at first, you may need to rely on a program to automate this process as you scale your business. me.
Top performance marketing software
There are two main types of performance marketing software: software that focuses on connecting advertisers with affiliate partners or publishers, and performance tracking software. Let’s take a look at some of the top tools in each category.
Performance collaboration tool
If you are a SaaS company looking to develop a strong partnership program, consider PartnerStack.
Platform, ranked in G2’s 2021 top 50 “Products for Sale”, helps brands recruit, engage, and manage partners.
PartnerStack key features include custom forms and incoming email streams:
- Facilitate referrals.
- Establish a reward structure that works for each partner.
- Develop automatic payment process.
The company offers a custom price based on the needs and requirements of each business.
Want a simple and easy-to-use dashboard for managing your partners? Check out Partnerize.
Their dashboards provide you with high-level data that allows you to crawl quickly and make decisions. In addition, Partnerize customizes its features based on industry, ensuring that every brand will have what they need to be successful in their performance marketing campaigns.
For pricing information, contact Partnerize.
TapJoy is designed for brands targeting mobile app users.
The software serves as an intermediary between top mobile game advertisers and publishers. Brands can track key conversion goals, like video fulfillment and in-app purchases, and pay only for actions that meet their goals.
To find out about TapJoy’s pricing structure, you must contact the company.
Performance Marketing Tracking Tool
One of the biggest difficulties working with affiliates is creating and tracking links and code for each partner. This is where LeadDyno comes in.
LeadDyno gives brands the tools they need to develop a successful affiliate program. Outstanding features include:
- Automated links and codes for each partner
- The option to upload content is available on social media for affiliates to share
- A customizable link port
Prices start at $ 49 / month and go up to $ 79 / month, for unlimited access to affiliates, extensive customer support options, and more. LeadDyno also offers custom pricing for businesses with more than 7,500 monthly website visitors.
With AnyTrack, allocation report easier. You can consolidate data from multiple sources (like Google Analytics and Facebook Pixel) into one platform. From there, you can determine which strategies are working and which ones need adjustment.
You can get started using AnyTrack for free. Premium version of the software is available, with prices ranging from $ 50 / month to $ 300 / month.
The Impact tool streamlines the collaboration process from initial contact to checkout.
Anyone from an ambassador to a sponsor can add to the brand’s “Partnership Cloud” with features appropriate for each type of partner.
In addition to Cloud, Impact’s key features include:
- Partner search and discovery
- Fraud detection
- Partner management optimization
Contact Impact to find out more about pricing.
The highest performing verticals of marketing
Wondering which industries make the most use of marketing? According to one Performance Marketing Association 2018 studyRetail advertisers spend the most on performance marketing – 50% of total spend. Followed by the financial sector with 35%, followed by the tourism industry with a sharp decline with spending 7%.
In terms of revenue, the sector with the highest revenue was retail with 73%, followed by tourism with 14%. Industries such as automotive, healthcare and telecommunications accounted for only 1% of total performance marketing revenue in 2018.
However, despite having the highest spend and the highest percentage of sales, the retail industry does not deliver the best ROAS. According to the report, the travel industry is the most profitable at 18: 1, followed by entertainment at 15: 1.
Any industry can succeed with performance marketing. It’s all about partnering with the right partners and setting up a powerful program to achieve your marketing goals.