1. Measurable results
The American marketing pioneer John Wanamaker is known for saying that “half the money I spend on marketing is wasted; the trouble is I don’t know which half.” While most people smile at this quote, there is a surprising amount of truth to it. Many companies and organizations allocate substantial budgets and resources to marketing activities without really knowing what return they are getting on their investment.
With performance marketing, this is no longer an issue. Performance marketing is based on concrete and measurable data, and instead of building campaigns on vague assumptions and gut feelings, the focus is on actions that actually create value for the business, such as downloads of an important document, completed registration forms, appointment bookings, or purchases. In other words, instead of traditional marketing where you are never quite sure what you get in return, performance marketing can report tangible results and the economic value generated by the campaign.
2. Frighteningly specific segmentation and targeting
While traditional mass communication focuses on reaching as many people as possible, performance marketing instead focuses on delivering the right message to the right people. For example, there is little value in generating a lot of traffic to your website or physical store if no one converts. With performance marketing, you can tailor different messages and ads to different audiences, so that those who are exposed to the ad actually find it relevant and take a valuable action. You can, among other things, segment campaigns by age, gender, interests, and geographic areas, and refine even further based on factors such as marital status or whether the person has been a customer before or not.
3. Continuous testing and optimization
A CMO once told me that “marketing through you is much more reassuring than what I’m used to!” This CMO was used to setting a fixed budget, launching a campaign for a defined period, and then simply hoping it would be a success. With performance marketing, however, you test different strategies and continuously optimize the campaign throughout the campaign period. This is a far more cost-effective way of working, because you are constantly adjusting, changing, and optimizing ads, messaging, and objectives to consistently achieve better results. At Solid Media, we are perfectionists, and we are always looking for the small tweaks that make the campaign perform even better!
4. Flexible budgets
With performance marketing, you can see the return-on-investment (ROI) results throughout the campaign, allowing you to allocate budgets to the channels and campaigns that generate the highest ROI, rather than being locked into a fixed budget that must be spent. It is easy to move budget away from campaigns that are underperforming compared to expectations and reallocate it to the campaigns that deliver the best results.
Before you launch your advertising, you can never know 100% which channel, campaign, or ad will perform best for achieving your specific goal. That’s why it’s an advantage to be able to reallocate budgets along the way as data is collected, rather than having to wait until the campaign has ended. And when you get concrete numbers on the ROI your advertising is generating, most companies want to increase the budget so they can make even more money.
This is exactly why CMOs and managing directors love performance marketing, because as long as the market saturation point has not been reached, the advertising will continue to be profitable when you increase the budgets. This provides far greater confidence than spending additional marketing funds on completely new channels where you don’t yet know the value.
5. Innovation is always a top priority
In today’s society, where new (technological) innovations and platforms are constantly changing people’s everyday lives, it is crucial that marketing strategies evolve as well. What worked a year ago does not necessarily work as well today. Performance marketing is known for being highly innovative, and at Solid Media we are constantly looking for new ways to reach the right audience at the right time, so that our clients get the maximum return on the money they invest in marketing.
