What is performance marketing? What is performance marketing: new digital solutions for business

At the beginning of March, we launched a user survey with the simple name “What is performance marketing.” And now is the time to sum up.

We asked readers three questions:

• What is performance marketing?
• What tools should a performance agency have in its arsenal?
• What additional “options” of the agency are important to customers of services?

SEOnews Readers' Opinions

527 users responded to our call.

After analyzing user responses, we received the following definition of performance marketing:

Performance marketing is a set of marketing activities aimed at achieving actual results for a business, measurable by means of web analytics.

But what kind of activities will the performance agency achieve the client’s results?

According to SEOnews readers, this is primarily:

• Contextual advertising (96%)
• Web analytics (91%)
• Remarketing (91%)
• SEO (82%)
• SMM (75%)

In the “Own option” field, respondents most often indicated email marketing, so we added it to the diagram.

Finding out what is important to clients when ordering performance services, we learned that two-thirds of the respondents would pay attention to the division of the staff into industry teams, and half of the respondents value formal confirmation of expertise - certificates of analytics systems and contextual advertising.

• Division of staff into industry teams – 69%
• Certificates for analytics and contextual advertising systems – 55%
• Own developments (services, tools, technologies) – 42%
• Publications in industry publications and presentations at conferences – 24%

Agency opinions

But the picture would be incomplete without a look from the other side. That's why we asked performance marketing agencies the same questions.

So, What is performance marketing, according to representatives of performance agencies?

Performance marketing is a set of activities to work towards a measurable result, for example, an increase in sales, registrations, leads, calls - that is, measurable performance indicators.

Just a couple of years ago, performance marketing meant direct sales promotion. But the market is evolving and now performance is, first of all, a process that ensures controlled and optimized marketing activity at all stages of the consumer life cycle.

Performance marketing is the achievement of business goals through the most effective communication with the target audience at all stages of the customer life cycle.

Performance marketing is marketing focused on a specific measurable business result. It involves developing a comprehensive strategy using many promotion channels, as well as personalized interaction with users. There is a great emphasis on online analytics - collecting, processing and analyzing user data in order to make the right decisions based on it. At the same time, the agency is required to deeply immerse itself in the client’s business in order to improve all related business processes: logistics, call center work, and sometimes the product itself.

If we talk about agency tools, the undisputed leaders are contextual advertising, web analytics, programmatic buying, social PPC, remarketing, marketplaces and mobile. SEO and CPA follow with a barely noticeable lag. Then – SMM, SERM and email marketing.

Experts noted the importance of the company having its own developments, certificates of analytics and contextual advertising systems, and division into industry teams (or experience in a specific industry).

Alexander Simanovsky, CEO of Artics Internet Solutions

In our opinion, we can separately highlight the presence of industry experience and cases and the project team and its competencies. After all, the client buys a team of specific specialists who will achieve the desired result. At the same time, in our practice, we have come to the conclusion that it is periodically necessary to carry out rotation among specialists in order to exchange experience and knowledge.

Media publications, speeches at conferences, customer reviews and cases turned out to be slightly less significant.

Nadezhda Shilova, director of RA ADLABS

It is important to pay attention to such points as:

Agency understanding of client needs

Personalized agency offer that solves the client’s problems

Experience and expertise

Result guarantees

These are the results of our survey. What do you consider performance marketing?

What is performance marketing?
There is a lot of talk about performance-based marketing; separate sections are dedicated to it at specialized conferences, and it may seem that this is a tribute to fashion, and not real effectiveness. And yet - does it work or not?

Despite the fact that attention to the term has given rise to many definitions, all of them are somehow related to the result. By performance marketing we mean an approach in which various promotion channels (contextual advertising, affiliate marketing, SEO, RTB placements, etc.) are used to achieve specific business goals: sales volume, cost of customer acquisition, ROI. It is important that the activity can be flexibly managed with a focus on results, preferably in real time.

Using a multi-channel approach, we can interact with the user not only at the moment when the desire to make a purchase has already formed, but also at other stages of the consumer’s life cycle, when he is just making a decision, choosing among several options, or is ready to make a purchase again. By collecting statistics on every customer action, digital marketers can measure the effectiveness of their marketing efforts at all levels of the sales funnel and continuously optimize their campaign based on the data obtained.

Why is this necessary?
The emergence of performance marketing has significantly changed the approach to planning advertising activities. The scheme in which the creative part exists separately from the purchasing part no longer works. The modern situation requires the ability to quickly change advertising campaigns. When different structures are responsible for their development, implementation and adjustment, the process of obtaining data and optimizing an advertising campaign inevitably slows down. Performance marketing allows you to avoid such problems. This approach is based primarily on managed channels that allow and even require constant optimization of structure, targeting and communication with potential clients, and therefore creative solutions become not only elements of strategy, but also tactics, and require almost daily attention.

The main thing is the result!
Now the market demands a performance approach to the entire marketing mix. E-commerce is perhaps the most striking example of business and marketing working as one. Competition in this area is so fierce that companies must constantly optimize costs and every action.
In most cases, an online store simply cannot afford to spend money on advertising without conducting a thorough analysis of the results of these efforts in real time. That is, it is important not just to conduct a campaign, evaluate its effectiveness after some time and then, having drawn conclusions, start planning the next flight - you need to constantly measure indicators and adjust placements.

Any activity: from clicks to viewing blog posts or downloading a mobile application should be aimed at solving specific business problems. It is important to understand that implementing a performance approach is impossible without integration with the client’s CRM to obtain data about attracted clients and their value. This is what TKS Bank did, for example. Now all the company’s actions in the field of marketing are clearly subordinated to business KPIs (the number of new clients that the bank has received); advertising activities need to be measured in real time and see what effect they have on the business. In this way, advertising campaigns are constantly optimized based on real-world performance data.
The introduction of performance marketing allows you to focus on those tasks that require the least cost and bring the most results - here the Pareto law classically manifests itself (“20% of efforts bring 80% of results”).

An important point is that performance based marketing can be applied not only to online promotion channels. You can also analyze business effectiveness in the case of offline campaigns. For example, after a TV spot is shown, we can measure changes in the volume and structure of search queries and, based on this data, indirectly judge the effectiveness of an advertising campaign.
The performance approach is also used when a business advertises on the Internet and tracks how online campaigns influence the increase in sales at offline locations. An example is the UK retailer Debenhams - 57% of sales generated by online campaigns came from offline stores, which proved the fact that online resources can be successfully used to increase offline sales.

Of course, to achieve these kinds of results, brand marketers and agencies must have access to real-time data on final sales. This is the only way to quickly monitor the impact of certain steps on sales and the emergence of new customers in order to make the necessary adjustments to the course of the advertising campaign.

Where does this not work?
The performance approach to marketing always works, the question is that when promoting some products and services we can get quick sales, but when promoting others we cannot. For example, we will not be able to get quick sales when launching a new online service or product, when brand knowledge is not formed and direct demand is very small, but we can work with intermediate KPIs, obtain statistics, optimize advertising campaigns and move towards more business-oriented KPIs . You can work in the same way when promoting goods and services that have a long sales cycle (for example, investment products, luxury goods, real estate and others). The main problem here is on the statistics side: it is necessary to accumulate a sufficient amount of data in order to move on to optimizing campaigns based on business KPIs.

What's next?
Tools for promotion should always be selected based on the real objectives of the business and its specific goals. At the same time, the development of technology promotes the use of performance marketing - this approach has more and more opportunities.
Already, every user has many devices that he uses throughout the day at work and at home. For example, he can start searching for information on one gadget, continue on another, and perform the action necessary for the business from his home computer. In this situation, you need to monitor its actions on different platforms and, when planning communications, take into account the features of each device in the context of the goods and services being promoted.
In the near future, iBeacon, an indoor positioning technology, will gain popularity and new targeting opportunities will emerge. If a customer spent a long time selecting a product on the website, added it to the cart, but ultimately did not order it, using iBeacon, the retailer can offer a discount on this particular product as soon as the customer enters the store.
The sensor system will also help analyze the behavior of visitors: who stood at which shelf and for how long. Based on this data, you can send a personalized message and track which offers the client was interested in and which were ignored.

One of the trends of the future is a deeper connection between performance marketing at the offline and online levels and, in connection with this, maximum personalization. Then we will be able to address the user offline based on online actions, and vice versa.

Do you know what performance marketing is? The term performance marketing has been on the tongue of every “lazy” person for six months. What kind of dish is this and what is it usually eaten with?

Yesterday I saw a post on Facebook:

Load oranges in barrels

If you don’t see the blatant nonsense, let me quote from the screenshot:

Checklist for Finding a Contractor That Will Boost Your Bank Account

Trying to talk about the economy, a bank account, the growth of business indicators, is only reasonable if you have knowledge in the field of economics. Economics says that you can increase your bank account simply by using a creditor or by reducing the profitability of transactions and wow, enormous promotional costs that make the business itself unprofitable. What's the point of "increasing the company's score"?

What does SEO performance and S.E.Advertising have to do with all this?

Well, why do Internet marketers spout all sorts of nonsense in public?! Gentlemen, Internet advertisers and website promoters, when you sit down to write such texts, do you open a dictionary of business, economics and marketing terms?

In the article from which this screenshot is taken, the author gives the following definition of the concept of “performance marketing” he used:

Let us remind you that performance marketing is an approach to managing Internet marketing aimed at achieving real business goals.

Dear Internet marketers! When you come to a customer, you have no idea about the real goals of his business. Do you even know that the company may simply not have the goal of “profitability”. A business may have a goal of capitalization or scalability. You have no idea that the owner has a task to increase capitalization, enter an IPO or sell the business!

Digital performance marketing agency for the purpose of accessing the client’s bank account! Do you feel “loaded”!? About the nonsense that online advertisers sometimes publish. Now, I believe that you will be more careful with economics and profitability that are unfamiliar to you!

But let’s find out how ridiculous and absurd the concept of performance marketing, invented and cultivated in the digital environment, is.

What is the term performance marketing among digital companies?

In fact, in the marketing environment there is such a thing as “performance-based advertising”. It has been used for quite a long time - ever since the concept of contextual advertising came into use. The Western Internet knows this term, as well as online advertising dictionaries and Wikipedia. If you try to translate this term, then “performance-based” means “based on indicators (numbers)”. The word "advertising" means "advertising". Without disputing the very concept of “performance-based advertising” for now, its meaning is that any advertising on the Internet must be counted. An advertiser should only pay for advertising when there are measurable and clearly understood numbers.

They know dictionaries, “Western sources” and the concept of “performance”. Moreover, the term “performance” is widespread in Russian and far beyond the digital sphere, and, as one might expect, “performance” is not the same as performance-based.”

Thus, there is the word “performance”, and there is the phrase “performance-based”. The term “performance-marketing” is not in dictionaries or other primary sources!

And what does this have to do with the countless pseudo-practical conversations among SEAs and SEOs about performance marketing?

How did performance-based advertising turn into performance marketing of performance agencies?

In 2008, the media communication group VivaKi distorted the term performance-baset advertising and the public, from the understanding that “it’s cooler to do marketing than advertising”, proposed the option “performance marketing”, which, however, failed to gain a foothold in the professional environment, but it had a devastating impact on the fragile minds of digital specialists!
The fact is that the very concept of “performance marketing” is meaningless and stupid. Dear digital advertisers...

The entire team and each of the marketers in the company work on marketing effectiveness. Marketing cannot be ineffective - otherwise why is it needed!? An “effective marketer” is as funny as an ineffective football player (and the “ineffective” ones only went on the field to run?). The phrase “performance marketing” is as stupid as the combination of the words “car-driving”, “writer who can write”, or “Internet-savvy marketer”. There is no other type of marketing other than effective marketing – there are ineffective managers.

And so, marketing is always effective. There is a concept of performance-based advertising, but there is no concept of performance marketing. What does the word performance even mean?

What is performance?

or like this:


For the attention of the author of the post and for the attention of colleagues, The term "performance" in Russian has a very specific and well-established definition. Performance (when written like this, in Russian) is a form of modern art based on the action of the artist, in which the object of art is only an excuse to demonstrate the creative process in a certain place and at a certain time. At the same time, the consumer is a contemplator of the creation of an object of art.

Seeing how art is created is the consumer’s goal; this is performance.

Let me quote a disgusting anecdote that is current among students of art universities, which quite clearly explains what “performance” is:

If you first ring the professor’s doorbell and, in front of his eyes, shit under the door, this is called performance. And if you first make a mess and then call, this is already called an installation.

Friends, puffing out your cheeks, echoing what others have said, without even trying to look at the original source - this is today the norm for communicating with people from Internet agencies! Is there even performance in marketing?

What is performance in marketing?

Let’s look at the cases, I think this is how everything will become clear right away: performance in marketing- this is when the future owner of a Lamborghini, Ferrari or Tesla sits in a factory behind glass in an armchair with a bottle of whiskey, and in front of him his future car is manually assembled, and a pretty model tells him in paint how the horseradish New Zealand cedar grew, from which they are now sawing out his lid ashtrays. This is how they “sell”, for example, objects.


Another example. There are products the sale of which is simply not possible without performance. How to sell a “miracle thing for cooking everything in just half an hour without oil, water and salt? Aha! You understand, yes, what I mean?

Performance is an indispensable tool for selling TV stores, show programs with elements of advertising on TV, selling complex equipment, when visualization of the process of using a marketing item and demonstrating the performance results of such use evokes a burning desire to purchase it.

Performance is also used in trade marketing. For example, in order to involve the consumer, he is invited to participate in the performance. The IQ team, which promoted the Ax deodorant, came up with an interesting idea and developed a special design - they mounted the cans into special racks and placed them in men's restrooms.

Another example: to show the merits of its cleaning product, at promotions in the Baltics, Reckitt Benckizer offered store visitors a way to launder money - if you dip coins in the cleaning product, they become almost like new.

Producers resort to performance. There is a webcam on the Internet with a view of the Ostankino sausage shop. The All-Seeing Eye observes and demonstrates how the sausage is prepared. The same applies to the Good Wood company, a manufacturer of country houses made of timber. The picture from the camera installed in their production is accompanied by a running line indicating which numbered order is currently being processed in production and the customer sees with his own eyes the execution of his order.

Friends, this is a performance in marketing! In marketing, performances are developed and used by special people and entire agencies. Who is creative, plans and performs in order to better satisfy the consumer?

What is a “performance marketing agency”?

Firms that organize performances are called performance agencies.
What is included in the remit of performance agencies? First of all, this is everything that relates to such areas of marketing communications as events, business events, shows, MICE, and party organization.

Event in the format of a performance for marketing

Performance brought the effect of complicity to the field of advertising marketing - bright and emotional events in the show format involve the audience in a relationship with a product or service. Performance is relevant and in demand as a form of modern communication between the seller, product and buyer. Performance has two waves of impact on the audience, which is important from a marketing point of view
a) the performance affects those present at the time of the event;
b) the performance affects the audience watching the video filmed during the event.

What is the mistake of digital performance marketers?

1. There is no such thing as "performance marketing", equal to the term “performance-based advertising” because, so that SEO and SEA specialists do not think about themselves, marketing is aimed at customer satisfaction and sales - a universal metric for integrated marketing work! LTV, sales revenue, number of sales – these are precisely the metrics of marketing quality, and not at all leads, clicks, conversions, “cost-per-crap” and other advertising nonsense. All marketing specialists know this!
2. Another goal of marketing is to satisfy the market need for goods and services as much as possible. Qualitative and quantitative assessment metrics satisfaction with goods and services also exist: the number of receipts with the promoted product, the number of repeat sales, the number of sales of new items under the promoted brand. If someone says that he knows how to consider the effectiveness of marketing as something special, he is mistaken or lying!
3. There are no performance marketers - as marketers who know how to do marketing better and more effectively, because There is no other marketing than effective. They simply don’t pay for ineffective “marketing,” so it doesn’t exist.
4. Advertising is not marketing. Advertising is only one of the marketing tools, part of the communication whale. Advertising alone, without other marketing tools (product creation, trade marketing, pricing) does not lead to marketing goals. by myself advertising does not replace marketing.
5. Digital advertisers: SEA specialists, SEO specialists, SMM specialists, SPAMERS they know little not only in the creation, positioning and promotion of goods and services, but they understand little even in offline advertising. That is why they are not only not the best, but absolutely narrow specialists in one of the areas of Internet management.
6. The concept of "performance", written exactly like that - in Russian, before you are born, defines something completely different than "performance-based advertising". No marketing education, at least learn English!
7. Performance can be used as one of the elements of qualitative enhancement of advertising impact, but to “sculpt” the word performance, not even to advertising, but to the very concept of “marketing” is illiterate!
8. Dear digital advertisers! You don’t do branding, you don’t know how to create products and you don’t understand how a product differs from a product. You are not familiar with the mechanics of trade marketing. You are no marketers! If you are already doing high-quality performance-based advertising on the Internet, continue to do this calmly and efficiently. There is no need to try on a crown on your head without taking off your earflap hat.

And key for agency advertisers selling their services to the market. WITH The above is understood by all marketing specialists, marketing directors and business owners who have a higher marketing or economic education, many years of work experience and simply life experience. They understand all this, and you come to them, bring with you nonsense about a “performance agency” and try with this sour mash to “sell” them your ability to just do advertising on the Internet.

Performance marketing is marketing aimed at results and increasing sales. It allows you to see specific quantitative indicators of the results of each individual marketing area. You can find out the cost of a website visitor, application, call, order and final customer, as well as the return on investment in marketing - ROMI (Return of Marketing Investment). More and more Russian companies claim that they work using this method. But in fact this is not the case. In this article we tell you what performance marketing is and what it really isn’t.

What has performance marketing changed?

Wasn’t it possible to measure anything in Internet marketing before performance? After all, it existed before, and with its help you can measure the effectiveness of any user action, and today you can also track the client’s path and calculate the dates and fact of contact of a particular user with your company. Then what’s new about performance marketing?

Just another sales scheme

This approach arose when SEO began to sell poorly - companies needed to stay afloat. Then agencies gradually began to introduce new payment schemes, and clients were asked to pay for:

• traffic growth;
• bringing the site to the top;
• increasing website conversion;
• increasing the impact of contextual advertising;
• separate website development;
• increasing brand awareness;
• increase in the number of leads and calls.

Later, all this became boring and clients became smarter, and that’s where performance marketing appeared. Marketers said: “We are guaranteed to increase sales via the Internet! Let’s analyze the return on investment from each channel and make advertising work!”

This is an evolution that has lasted for years. But it’s one thing to talk, and quite another to actually count.

The sales funnel that everyone fell for

Even when considering the lifetime value of a customer (simply, the amount of money he has brought you over the entire period of time), we are often faced with the fact that the market has a limited size, and this is especially true for complex goods and services. There are a limited number of high-income clients. Client profitability can vary greatly. Even with the same lifetime value, different cohorts of customers may have different returns. This also needs to be taken into account.

(red line - CLV, blue bars - profit)

Problem 4: Limited audience choice

After disabling ads on contextual networks, online agencies cannot compensate for the drop in sales through organic search results. This just shows the flawed approach of working only with contextual advertising without building a full-fledged Internet marketing system.

Problem 5. Working only with formed demand

The schemes that most online agencies use are not designed to work with unformed, competitive and related demand. As a result, you will not have an information and recommendations strategy (this is not direct paid advertising).

Problem 6. Focus on a one-time initial sale

For some reason, Internet marketers in Russia, when they achieve an initial sale, consider their duty fulfilled and do nothing else. However, the initial sale is only the beginning of a long customer cycle (see information about the customer journey at the beginning of the article). Therefore, CPA and CPO indicators are often insufficient. Receiving and counting the initial order is not enough for a normal strong business.

Problem 7. Incomplete analytics before sales

In Russia, few people are familiar with the term “pre-sale,” although this is exactly the starting point that allows you to conduct an in-depth analysis of the effectiveness of your business. This requires a connection with sales accounting systems, for example, the implementation of a CRM system. We need a personalized system that will allow us to perform structural web analytics before the moment of sale.

Case. Performance for a construction company

From theory to practice. Let's look at the principle of operation of real performance marketing (or, as we call it, systemic electronic marketing) on ​​the Internet of a company with a dealer network.

Let's say you sell building materials through a website. At a minimum, your customers have 8 decision stages. These are users who:

1. We haven’t decided on the material for cladding the façade.
2. Haven't decided on the type of siding.
3. Haven't decided on the manufacturer.
4. We are at the stage of selecting a color scheme for the facade.
5. We are ready to buy a specific brand of siding and are looking for the best sales points.
6. Interested in installing siding (they want to install it themselves).
7. They create search demand for professional installation services (they have firmly decided to order installation).
8. Express a clear intention to purchase a specific brand of siding.

If you make a system of website pages or landing pages that will work like an elevator: determine what stage a person is at and transfer him to the next stage - this will be performance: a well-thought-out marketing system that measures everything.

After all, we already know how a person chooses siding, we recorded the data in CRM, recorded it in siding shipments from the warehouse, in Google Analytics, combined it with GTM and began managing advertising campaigns that we upload through the data of this system - we have a search engine, we have an advertising channel, there is Universal Analytics, there is GTM (Google Tag Manager), there is Mailchimp (or any other similar service), a set of letters, pages, banners and advertising sections have been created for each stage.

There is only one problem: to do this, you will have to create a lot of banners, text ads and videos for each system. But by putting everything into a self-written table, where there is a client user ID, you can see what stage the client is at, you can monitor how people move through the stages and influence the purchase decision.

Case. Performance for a large dealer network

If you have a network of dealer centers and a factory website that does not sell (or can sell, but all orders go to dealers), you will have to create a CRM with a call center that receives calls and orders from a single head site and dealer sites. Dealers will also need to build a special system in which all applications will be visible. But when they subsequently take an order, it will be taken from the warehouse, the system will contact the manufacturer’s warehouse, and note that the order has been completed. There will even be control over whether the installer installed the product and the client was satisfied (or not satisfied).

To build such a complex, you need to take the following steps:

1. Create a unified network of dealer websites.
2. Connect IP telephony to the entire network.
3. “Hook up” stores to your personal account for booking products through 1C.
4. Connect a bonus card system.
5. Make it possible to reserve stock from the warehouse.
6. Connect auto offices.
7. Connect everything with Google Analytics and reporting system.
8. Connect everything to the call center.
9. “Run in” the system.

But only when all dealers are connected to a single system, all clients from advertising channels will fall into a single database, and dealers and sub-dealers will interact with the product reservation system with a single call center, only then will real integrated email marketing be implemented (try ordering something... something similar for performance agencies).

❤ Do you sell through sales representatives? We have ready-made solutions for companies with affiliate networks - an online sales system that brings 4 million rubles per year profit to our clients. Consists of CRM, personal accounts, a network of sites, telephony and other features

Russian specifics: you go to a client to create only a website, but you also do all the marketing, sales and automation

The specificity of performance for B2B and dealer networks is that there is no simple solution, and for Internet marketing to work, you need to thoroughly study business processes and build automation. For example, there are clients who have 36 audience segments, and each segment should have its own advertising campaign and its own sales funnel. Therefore, an illusion arises - now we will order Performance, and the market is ours. Yes, if you didn’t measure anything before and suddenly started marking applications, that’s great. But in terms of marketing, nothing has changed for you, you just began to see the result. This is good, but it is not enough.

A quality performance marketing agency will provide you with call tracking, set events on all forms on the site and tell you which calls arise from which advertising channels and how much was spent on them. As a result, the agency will leave effective channels, modernize ineffective ones, and remove ineffective ones. It will even make reports on operators: who accepted and how many applications over the phone. Isn't it a miracle? No. All this could have been done back in 2007 and earlier.

Measuring 100 times is not enough

What is the conclusion from this? To work with Performance, it's not enough to measure. Collect data and use that data to interact with people at different stages of decision making.

At Completo, we don’t tell clients what we will do performance marketing for them. We study the client’s business system for a long time and tediously, and only then we talk about how to solve business problems using the Internet. This also includes telephony, CRM, automation of various processes, work with dealers and planning. We work with each client for 3–4 years - there are clearly laid out steps, and we go through them together with the client. The result is a clearly structured system, which is a real Performance that works.

How to get the most out of internet marketing? Make all advertising channels work together. In order to fully recoup every ruble invested in online promotion, all tools must serve one goal - increasing sales and return on investment. Performance marketing will help you achieve this. The principle of operation of this method is best characterized by the words of an advertising classic:

What's wrong with good old digital marketing?

Each online tool gives a business an important advantage - the ability to study in detail all kinds of indicators of its performance. You just need to correctly determine which of them are important in each specific case, and then put everything together.

Despite this, until recently, Internet services in the hands of most webmasters were not much different from ordinary outdoor advertising and radio advertising, where only a few measured anything other than coverage. Of course, over time it was replaced by more or less specific indicators. Experts now have the following methods for assessing the effectiveness of the channels used:

• CTR (click-through rate) of contextual advertising;
• site position and volume of organic traffic from search engines;
• growth, reach and activity of subscribers on social networks, transitions to the site, etc.

Performance marketing is the next stage in this evolutionary process. Agree, all these fundamental metrics themselves have little to do with the real needs of your business. They matter only if there is a performance strategy that answers the questions that many Internet marketers are trying so hard to avoid: what will be the result of using this or that channel, how will this affect the company’s income, will investments in the selected tools be profitable?

How performance marketing works: a step-by-step plan

To develop an effective strategy, you will have to abandon the usual universal metrics. When implementing a performance strategy, real business goals, expressed in a specific quantitative equivalent, are always at the forefront. To achieve them, you will need to work through the process of working with customers step by step:

Task	KPI indicators
1. Identify or formulate a need and offer a solution. The goal of this stage is to first generate and expand demand, and then offer a solution to the resulting audience. At this stage, it is important to create a need in the buyer. Then you need to convey information about your product to him through various types of online advertising and performance marketing tools.	Percentage increase in demand; percentage of coverage of the formed audience
2. Attract and retain your audience. Now the main task is to involve potential buyers received in the first stage. To do this, you need to properly organize your work on content marketing, contextual advertising and online reputation management.	Volume of incoming targeted traffic to content distribution points, behavioral characteristics: viewing time and depth, bounce value, number of subscriptions
3. Convert leads into sales. Here it is important to achieve maximum conversion, work on pending orders and sales after returning the goods using remarketing	CR (conversion rate); number of all sales; number of sales through remarketing tools; number of other actions leading to sales
4. Increase loyalty. After selling a product, you need to use services to retain and return the buyer to work with his impression of the company and product. The goal is to increase the average check, ensure repeat sales and sales based on recommendations	LTV (total profit per client); CRV (the amount of money earned through recommendations); ratio of positive and negative reviews

As you may have noticed, one of the features of performance marketing is the measurability of key indicators at each stage of the project. In addition, to work with customers at all of the above steps, separate sets of solutions and tools are created: landing pages, a series of banners, email newsletters, videos, scripts, etc. are created.

What KPIs are used and what do they mean?

The application of performance based marketing can be extremely variable. The strategy can be used to increase sales, measure engagement with a business's audience, and track ROI on various digital channels. This is where all sorts of performance indicators come in handy.

ROI (Return Of Investments). The most exciting question for businesses is the return on investment indicator, which demonstrates whether the advertising campaign is paying off and whether the performance strategy is effective. Calculation formula:

ROI = (sales income − marketing investment) / marketing investment x 100%

Here's a simple example:

LTV (Lifetime Value). Reflects the total profit per client. Calculation formula:

LTV = average value per sale x average number of sales per month
x average retention period per customer
LTV = 1200 rub. x 2 sales x 3 months = 7200 rub.

CAC (Customer Acquisition Cost). The amount it costs a business to attract a customer. Of course, the lower the CAC value, the better. Calculation formula:

CAC = marketing expenses / number of customers acquired
CAC = 225,000 rub. / 170 clients = 1323 rub.

It should be taken into account that CAC can only be assessed in comparison with LTV. Everything is simple here: with an LTV of 7,200 rubles and a CAC of 1,323 rubles, the ratio will be 5.4. In this case everything is just fine. But if your LTV/CAC is approaching 1/1, we recommend taking this as a sign to take emergency measures.

CPA (Cost Per Action). Reflects the cost of the target action. Calculation formula:

CPI (Cost Per Install). The cost of installing the application by the client. Calculation formula:

CPO (Cost Per Order). Reflects how much advertising costs before a sale is made. Calculation formula:

Overview of the main performance marketing tools

The choice of technologies for implementing a performance strategy depends on the goals of a specific project and the needs of clients - a combination of SEO and SEA for these tasks is not always enough. This is where other digital tools come to their aid:

Mobile marketing. When implementing performance based marketing in 2018, you need to think about mobile traffic first. According to Admitad, mobile users already account for 58% of all traffic, and 38% of all online purchases are made from smartphones.

Email Marketing. Among all performance marketing tools, this is the most versatile and inexpensive way to remind yourself. It is great for returning a customer and generating repeat sales, as well as for creating triggered mailings (for example, to remind a customer about an abandoned cart).

Native advertising. “Natural” advertising content that fits organically into the content of the site. It is no different from full-fledged publications, it allows you to post any media content (videos, links, etc.), improve attitude towards the company and product, and also cannot be blocked by AdBlock.

Social Media Marketing. It has two important qualities: firstly, it allows you to return the buyer to the site, acting “on its territory”; secondly, it makes it possible to work with negative reviews and build communications with customers in an informal setting.

Remarketing. When working with a website, it is impossible to avoid losing some visitors. The best way to remind those who have visited your site before is to use retargeting technologies to display ads on other sites or in mobile applications.

Marketplaces. All kinds of aggregators and trading platforms are gaining more and more weight among performance marketing tools. Back in 2017, they allowed ecommerce projects to receive up to 10% of sales through referral traffic.

Just imagine that all these tools and stages of interaction with customers can work towards the main goals of your business simultaneously and together! It is not surprising that today performance marketing is considered one of the most effective and sophisticated methods of online promotion.