A recent report from Datareportal reveals that approximately 97% of Australians own at least one smartphone, with 96.4% of them using it to access the internet. In today’s digital world, performance-driven marketing is a must for reaching most Australians.
The internet, smartphones, and social media have reshaped what it means to run a business and eCommerce. To succeed, businesses need to adapt and do more than just post a television advertisement; they need to invest in performance-driven marketing.
Performance-driven marketing is a digital strategy that utilises data analytics to inform the decision-making process and optimise campaigns. For example, statistics reveal that data-driven social campaigns generate 23% more engagement.
For companies looking to invest in performance-driven marketing to optimise their campaigns, partnering with a reliable digital marketing agency in Adelaide, Melbourne, or other locations can provide the expertise and local insights needed to succeed.
What is performance-driven marketing?
Performance-driven marketing is an umbrella term that refers to when a business pays a marketing agency for an online marketing or advertising service only when specific, measurable goals are achieved.
For example, a measurable goal in performance-driven marketing could be a certain number of clicks, customer acquisition, or return on investment. It is a metrics-based approach to marketing that acts on data from results.
This results in a strategy that minimises risk for the business, and every dollar spent on marketing is tangible in relation to the goal. Additionally, the results from the campaign can be used to optimise and inform future marketing tactics.
Performance-driven marketing isn’t a new concept; however, it has become popular in today’s on-demand, data-driven culture.
How does it work?
Where traditional marketing strategies often rely on broad tactics, hoping for the best with the outcome, a performance-driven strategy begins with the desired result and uses real-time data to achieve it.
Before a performance-driven campaign is launched, the marketing company will work with the business to define clear key performance indicators (KPIs). These goals serve as the backbone for the marketing tactic. Common examples of KPIs include:
- Increase website traffic by a certain %
- Improve sales over a set period of time (e.g., quarter)
- Achieve a higher market share by a defined date
Why is performance marketing important?
In Australia, approximately 20% of businesses fail within their first year. Data from the Australian Bureau of Statistics reveal that half of the businesses that were started in 2019 closed by June 2023.
Small businesses make up 97% of Australia’s total businesses. These statistics highlight that running a business in Australia is cutthroat and competitive. If there are any tactics that you can follow to gain an edge, it’s following performance-driven marketing strategies.
Reasons why a business may fail during its first year include:
- Poor cash flow and financial management
- Lack of an online presence
- Ineffective management/lack of experience
- Poor planning and research
Performance-driven marketing can help avoid these common pitfalls, especially poor planning and a lack of an online presence. Through tailored strategies designed by digital marketing agencies like WebOracle, they can ensure an effective online presence, and every campaign is data-driven.
Popular performance-driven marketing strategies
Performance-driven marketing is often tied to digital tactics and multi-channel strategies, including email campaigns, social media content, paid advertisements, and display advertising.
What works best for your business will depend on your goal. Your marketing strategy may employ just one type of advertising or combine multiple. The following subheadings cover different marketing tactics that can be used alongside performance-driven marketing.
Search engine optimisation
Search engine optimisation (SEO) is the process of improving a website’s visibility on search engines, such as Google. It’s been a core component of digital marketing strategies for any business looking to improve its online presence.
More than 50% of all website traffic is organic searches, making SEO the key to attracting new customers. There are various types of SEO to increase visibility, including technical SEO, on-site SEO, and off-site SEO.
Search engine optimisation is strong when combined with performance-driven marketing, treating each organic visitor as a paid campaign. There are many measurable actions that a business owner can tie to SEO, including:
- Increased traffic
- Organic conversion rate
- Improving engagement time
- Lead generation
There are many performance marketing tools, such as Google Kit and Google Ads, that can provide real-time data on visitors. They can be used to track goals and provide insight into user behaviour.
Email campaigns
Email campaigns are another digital strategy that complements performance-driven marketing. Statistics show that email campaigns have one of the highest returns on investment among online marketing strategies.
Email marketing consists of sending emails to subscribers, typically using platforms such as Mailchimp to automate the process. Content can include anything from updates on new products, sales information, promoting events, or reminding a customer they’ve left their cart full.
In performance marketing, email campaigns should have a clear, trackable goal. Examples of metrics that a business owner could use include:
- Click-to-Open Rates: This refers to how many people actually open the email that you’ve sent.
- Revenue Per Recipient: This is how much revenue each message (email or SMS) generates, and it can tell you exactly how profitable a campaign was.
- Placed Order Rate: This measures the number of people who make an order after receiving an email or SMS.
Businesses can also employ the use of A/B testing to understand what type of email campaign their audience responds to.
A/B Testing
A/B testing, also known as split testing, is one of the strongest tools in marketing—whether the business is sending out emails, working on SEO, or running paid advertisements. A/B testing is an experiment where marketers split their audience and create multiple versions of a campaign to test their effectiveness and determine which one works the best.
A/B testing can be used for emails, web pages, product designs, apps, and more. The goal of A/B testing is to replace subjective decision-making with objective, quantitative data, which makes it a perfect match for performance-driven marketing.
Every form of digital marketing campaign consists of countless variables, such as headlines, images, and content. A/B testing allows businesses to comprehensively test which variables perform best to improve campaigns and drive growth.
