Performance-driven Marketing: Getting your Money’s Worth
More than 20 years have passed since the first online ad was placed and the trend is clear: digital advertising is a must-do for marketers looking to maintain or grow their market shares by advertising to their target audience.
The knowledge, skills and tools required to do digital advertising well have grown proportionally with the increasing attention it has received and the bigger budgets allocated.
A QUESTION OF BRANDING OR PERFORMANCE
One of the disciplines to receive the most attention is the expanding field of performance marketing. As with many terms in marketing, performance marketing has come to mean several things. But, as a general term, it refers to any marketing campaign with an aim to directly drive consumer action in a clearly measurable way. While branding campaigns typically aim to maximize exposure towards a relevant target group with an aim to generate brand awareness uplift, performance campaigns on the other hand intend to drive certain user actions such as purchases, registrations, subscriptions, bookings, etc. Relevant KPIs for performance campaigns are metrics, such as sales numbers, cost per sale, and return on investment, while for branding campaigns an advertiser will look at impressions, reach, frequency and click-through-rates, to name a few. The performance campaign execution setup is often very flexible, enabling the campaign manager to test a number of variables and make instant or quick changes to optimize the campaign towards the end goal(s). As massive amounts of data has become available to marketers, from whom they can target to how people interact with their ads and what subsequent actions they take, the ability to track, measure and optimize campaigns has now become a powerful tool for marketers.
DATA AS A SOURCE OF GROWTH
“– Performance marketing is already pretty established and advanced in Europe,” Lars Smidt, CMO at Leverate says. “– Over the past 10 to 15 years, we’ve seen how it has evolved from something on the edge of the marketing discipline into the main driver of the entire industry. In the last couple of years the direction in which we seem to be heading is data and automation.” In fact, it is not unlikely that in the future all digital advertising work will be performance-driven rather than traditional branding campaigns, according to Lars Smidt: “– Frankly, it’s essential for nearly every company in today’s digital world to be able to answer this question: “What’s the impact of my digital marketing campaigns and am I spending my media dollars optimally?” I often see clients who are doing campaigns in other channels with other agencies. Those campaigns regularly lack hard numbers and transparent details about the campaign performance. Truth be told, at times I’m puzzled to see how the requirements of the same client are so different.”
Lars Smidt has over a decade worth of experience with marketing for internet companies where he has witnessed firsthand how vital data has become to marketing success online. “– With the data out there, available to the marketer, it’s evident that companies who understand how to leverage available data have a competitive advantage in their industry.” Erdal Tetik is Head of Performance Marketing at Leverate in Jakarta, Indonesia, and he agrees with Lars Smidt and adds: “– Performance marketing is extremely important for most businesses as it has a great impact on business growth. Few, if any, e-commerce companies today can survive without investing significant amount of time and money in performance marketing in order to drive revenue growth.”
THE BEAUTY OF PERFORMANCE MARKETING
Both Lars Smidt and Erdal Tetik thoroughly enjoy working with performance marketing due to the very analytical and quick feedback loop when running performance-focused campaigns. “– I really enjoy the transparency that comes with executing such campaigns for our clients”, Erdal Tetik explains. “– As a performance marketer you have a number of very straightforward metrics that tells you without ambiguity if your campaign is driving growth for the client. There’s a direct line from input in the form of campaign setup to output in the form of sales, installs, sign-ups or what the particular campaign goal may be.” But, as Lars Smidt points out, the transparency of performance campaigns is a double-edged sword for those managing them: “– It’s so transparent because results are easily quantifiable. If the numbers are looking great then it’s extremely rewarding, for sure. Yet, if a campaign is not running well, everybody will know immediately and sometimes patience can be a virtue in order for us to generate sufficient insights to fully optimize the campaign. But because of Leverate’s hard work and our unique approach, we know what actions to take in order for the vast majority of campaigns to create very positive results.”
A major part of generating positive results with performance marketing is targeting the right audience, booking the right placements and ad formats as well as the optimal ad bidding price. Knowing the answers to those questions is a matter of data tracking and measuring the impact of different steps leading to the desired user action. “– Accurately tracking data is easier said than done,” Erdal Tetik says. “– There’s not one but several attribution models out there with each of them providing different sets of data. A common pitfall for advertisers is to base their decision-making on solely one attribution model and neglecting other models. It might lead to wrong conclusions as some marketing channels are not getting credited according to their impact. By considering data from several attribution models you get more insights into the full customer journey and impact of various touchpoints.”
With marketers getting better and better at putting together reliable attribution models and executing on campaign data, there is a recent renewed focus on the creative aspects of the campaign performance ad according to Lars Smidt: “– There’s a comeback of the creative aspect. Good technique alone is not enough if the message is not clear or just plain boring. At Leverate, we put a great deal of attention into also testing different creative aspects of the performance campaign as well as recurrently refreshing images and copies. This is often a huge factor in maintaining a good campaign performance over time.”
ASIA ON A STEEP GROWTH PATH
Working on Leverate’s campaigns across Asia, Erdal Tetik have witnessed how Asia is still lagging somewhat behind Europe and US when it comes to the emphasis put on performance marketing and the availability of required skills in the labor market to execute such campaigns. For instance, programmatic buying platforms, like DoubleClick, are not extensively used by other advertisers in Asia yet. “– It will certainly be interesting to observe how the broader usage of these platforms will shape the performance marketing landscape. Asia is on a steep growth path, and I can see how clients are becoming increasingly aware of how performance marketing works.”
With companies demanding more performance-focused campaigns media agencies across Asia will have to up their game. A game in which Leverate is already well-equipped to compete according to Erdal Tetik: “– What makes Leverate unique in Asia is definitely the combined expertise in every kind of digital marketing channels out there paired with a highly analytical and KPI-driven approach to optimizing campaigns for our clients. For example, we’ve developed a very transparent way of monitoring campaign performance and target run rates on a day-to-day basis which allows us to be on top of all our campaigns at any time. A KPI-focused approach like this one is not at all the norm on the continent.” Erdal Tetik remembers a particular paid social campaign his team did for a client entering the Indonesian market. “– It was a very strong learning curve for the client as our campaign team made major changes concerning the campaign structure. For example, we changed the setup to prevent overlapping targeting and we leveraged more advanced custom audiences than they had ever thought possible.”
CMOs in Europe and US already put a great emphasis on campaigns delivering direct results. Lars Smidt explains: “– At Leverate we’re used to working with clients who are very performance driven. We tell our clients that they should expect a lot from us and they do. We’ve developed a very unique and powerful approach of conceptualization and testing. In a channel like Facebook, a lot of our competitors don’t want to invest so much time and dedication to performance campaigns; they prefer campaigns which aren’t monitored that closely by the clients. In the long run they will get into troubles, I’m sure. Clients should be – and are more frequently – asking for more numbers and transparency about campaigns performance. We have several clients who have upped their spending significantly on Facebook advertising after we took over. They’re surprised by how much potential we can unlock with Leverate’s unique Facebook approach.”
ONLY THING CONSTANT IS CHANGE
Both Lars Smidt and Erdal Tetik are constantly on the lookout for new performance marketing opportunities for Leverate’s clients. In Europe, Snapchat and Pinterest are two players that can potentially stir up things, according to Leverate’s Berlin-based CMO: “– We’re very excited to discover the next opportunities of social platforms like Snapchat and Pinterest. We’ve been one of the very first agencies in Europe to execute Snapchat campaigns and it’s no doubt going to be interesting to see what they may offer performance marketers but also to see the reaction of Facebook. Competition is always good for innovation in this field.” In Asia, Erdal Tetik is excited about Google’s ‘Shopping Ads’ feature which is currently rolling out as a beta in South East Asia: “– It’s hard to say if it’ll be ‘the next big thing’ but it’ll certainly be interesting to see the impact of it. It’s always great to have more tools in your performance marketing toolbox! One thing is clear, though. There’s constant change in the digital sphere and you have to stay on your toes as a performance marketer. For example, I find it very exciting how Facebook and Google are regularly rolling out new features that enable advertisers to target their potential customers more and more efficiently.”
This blog post is an adapted version of an article that featured in Leverate Media’s company magazine ‘Leverate ONE‘.