Although more and more advertisers are recognizing the benefits of online branding campaigns, most digital campaigns aim for concrete, measurable results on the website, so they belong to performance marketing. The planning and optimization of campaigns for specific interaction goals such as online sales or leads as potential new customers is an important advantage of digital advertising over traditional media. Performance marketing campaigns deliver data on success from the first contact and can be readjusted during the term, be it with regard to ad texts, campaign motifs, landing pages, bid prices or targeting. Even if more and more systems support campaign control through marketing automation, know-how and experience in performance marketing is still required.
What are the typical challenges in sales and lead generation campaigns, regardless of the industry or whether the campaigns are played out in search engines, social networks, newsletters, native ads or other display formats? Which problems occur frequently and how can they be mastered with foresight?
The following 11 commandments of performance marketing provide answers to these questions.
- Define a meaningful response target: Performance marketing without a clearly defined response target is practically impossible. The problem is usually not to set goals, but to concentrate on ONE goal and consistently place it at the center of the campaign.
- Deriving meaningful KPIs from goals: Once you have decided on a goal, it must be operationalized. The goal of “gaining new customers” is then used to measure variables such as “first order rate” or “marketing costs per new customer gained”. Of course, several KPIs can be considered in the course of the campaign, but concentrating on one measurement variable is extremely helpful for optimization.
- Impact hypotheses and forecasts: Next, hypotheses and impact forecasts must be set up in the campaign planning in order to have a benchmark for success. Here the biggest problem is usually to get to a realistic size. The business plan is of course a possible source of targets, but it may not have been realistic. A derivation from the otherwise usual benchmarks of alternative measures such as postal mailings or trade fairs is more helpful. Industry-standard key figures, which are usually well-kept secrets, are also exciting. Difficult as this is: when planning a performance campaign, you should already work out clear forecasts and success criteria in order to be clear about the connections between, for example, the price per click and the cost-per-order. This is where experienced agencies can help.
- Don’t constantly change optimization KPI: Of course, new objectives or strategies can arise as the campaign progresses, but not every few weeks. A campaign that is primarily aimed at new customers will probably not be optimal in terms of the cost-sales ratio (KUR) or in terms of cost-per-click (CpC). Due to the abundance of metrics, it is easy to lose sight of the original goal. Therefore, the main goal of the performance marketing campaign should be discussed and documented in detail at the beginning.
- Choose attribution models sensibly: Very few cause-effect relationships are so clear that exactly one measure leads to a specific result. Last cookie wins, i.e. the clear assignment of campaign success to the last click before completion, was the standard for years and is still the standard setting of Google Analytics today. Google now also advises against this strong simplification. The Netzwerk Reklame team will be happy to clarify with you whether a consideration of assists, the U-curve or a data-based attribution model depicts the best cause-effect relationship. It is crucial that the customer journey and the duration of the purchase decision process are taken into account in a meaningful way.
- First sort, then optimise: Anyone who analyzes and optimizes campaigns in terms of their performance (or performance in new German) should start with the biggest levers so as not to get bogged down. So whenever a performance-oriented search engine or social media campaign is optimized, the handle is sorting by budget, sometimes also by clicks or impressions, but in any case from important to irrelevant.
- Pay attention to the number of cases: Online campaigns deliver results practically in real time, i.e. after just a few hours or days. Unfortunately, these are not yet meaningful. Positive or negative deflections are purely coincidental at the beginning. On the other hand, it is human that curiosity is particularly high at the beginning of a campaign. Nevertheless, patience is required in performance marketing: If, for example, a conversion rate of 1% is assumed, experience has shown that it takes 400-500 clicks (i.e. a factor of 4-5 of the average target efficiency) to be able to make a reasonably meaningful statement. This usually means that at the beginning optimization is carried out in larger contexts (e.g. at the channel or advertising medium level) and later more granularly at the keyword or placement level.
- Check reporting or dashboard regularly: Most people find it easier to analyze quantitative relationships, key performance indicators and time series when these numbers are visualized. This is now easier than ever with modern dashboard systems and should therefore be set up at the beginning of the campaign. In doing so, the focus on the actual campaign goal, with the all-important KPI, must be taken into account. However, a good dashboard alone does not help, of course you also have to deal with the content regularly.
- The magic of creation: For the creative advertiser, message and design are everything, in performance marketing, ad texts, banner motifs and landing pages are quickly regarded as the given campaign basis. The fact that behind all the numbers and dashboards there are normal people who react or not to the display of advertising for a keyword or in a specific targeting quickly fades into the background, especially for people with an affinity for numbers. Here, too, it is important to test several approaches in parallel and to further develop the best performers as soon as a stable database is available.
- Don’t jump to conclusions: “This doesn’t work for us” is a phrase that is often heard in performance marketing. Experiences from a few years ago or a too small test run often speak here. Sometimes this experience is right, but sometimes it’s also massively wrong, because the creation or the timing of the last attempt might have been wrong. Even if performance marketing leads to a mechanistic view: this is not a simple vending machine where a coin is inserted at the top and the selected drink comes out at the bottom. Curiosity and perseverance are required to understand WHY something doesn’t work if it doesn’t work: is it the wrong click, the wrong target group, an uncompetitive price, missing customer reviews, slow landing pages or the wrong payment methods at check-out? Performance marketing is a lot of detailed work with a high level of perseverance and openness to complex relationships.
- Interdependencies in integrated campaigns: If simple attribution models no longer reflect reality, this should be taken into account when planning the campaign. Agency partners who are familiar with more than just one online marketing tool and who use the interactions in the customer journey in a targeted manner to not only develop a local optimum (e.g. for search engine marketing) but also an overall optimum combination of channels are particularly helpful here. One or the other measure may not be economical on its own, but in combination with other instruments, the campaign can be significantly scaled up.
Have you recognized one or the other topic from your campaigns and would like to take action now? We would be happy to support you in the development of holistic performance campaigns. Just send us an email or give us a call, we’re happy to help.