A performance marketing agency is a strategic partner who works with you to understand your objectives and builds a performance marketing strategy and plan in order to achieve your goals.
In our ‘what is performance marketing’ blog, we explained that performance marketing is a data-driven approach to digital marketing. This time, we will look into what kind of channels you could expect your performance marketing agency to support with, and how to measure success.
What channels are included in performance marketing?
Performance marketing includes the following channels:
- Paid search (for example, Google Ads & Bing Ads)
- Paid social (for example, Meta, LinkedIn, TikTok advertising)
- Affiliate (commission-based promotion via a third party)
- Programmatic (automated placement of ads on third-party networks)
- SEO (optimising your website organically to appear in search results)
Performance marketing is generally considered to be a form of paid advertising, as it is focused on outcomes such as sales or leads.
However, as a marketing agency that has always focused on tangible results, we prefer to include SEO as well. Performance marketing includes any channel that can attribute a direct result to the activity, and we often find that organic search can play a major role in generating traffic and conversions on a website.
How do we pick the right marketing channels for our clients?
As a strategic performance marketing agency, we always focus on an audit and strategy first. This will mean finding out details such as who the client’s customers are, what they sell and what they are trying to achieve.
We will use this information, along with a review of their budget and past performance, to recommend the most appropriate channels for the client. For example, TikTok advertising would be great for an e-commerce brand targeting a young audience, whereas LinkedIn ads would be more suitable for a business seeking to reach purchasing managers.
What’s the difference between performance-based marketing and performance-based advertising?
Performance-based marketing is a broader term that we prefer to use, as it includes any marketing channel that is outcome-driven.
Performance-based advertising is essentially just another term for paid advertising, but with a refined focus on outcomes, excluding paid activity that may focus, for example, on brand awareness.
How do we report on the effectiveness of performance marketing?
We produce a monthly report for our clients (and in some cases, weekly) where we will report on metrics such as:
- Conversions: Sales/purchase, contact form submissions, phone calls, downloads
- ROI: Return on ad spend (ROAS), cost per acquisition (CPA), average order value (AOV), cost per click (CPC), gross profit
- Engagement: Traffic, views, engagement rate, clickthrough rate (CTR)
What results are realistic in the first 3-6 months?
It’s expected to achieve some of your top-level targets within a 6-month period, such as sales or acquisition of new leads and customers. The results will always depend on the level of effort invested in, but we will work with you to identify the most important metrics to focus on first. We often see clients generating new enquiries, achieving page 1 rankings or SERP features and more, within 6 months or less.
How much does a performance marketing retainer cost?
This really depends on the agency and how much budget you have. On average, our clients pay us between £2,000-£4,000 per month to support performance marketing activities. Please be aware that any paid advertising spend needs to be budgeted for on top of your agency fees.
What are the limitations of performance marketing?
Attribution is an increasing issue in performance marketing, with platforms such as Meta often over-inflating results. It’s always important to find the most accurate data source and make this your single source of truth. With shortening attribution windows, too – on Meta it’s 7 days – it is more difficult to attribute the correct source to the result.
Performance marketing also ignores brand-related activity that can often influence purchase behaviour. For example, somebody could purchase through an ad after already building brand loyalty and trust in above-the-line channels.
Time to focus on performance marketing?
In a world where marketing budgets are shrinking, but expectations are growing, performance marketing is really the only place to confidently invest your budget. It’s measurable and focused on achieving hard business objectives.
If you’re curious about working with a performance marketing agency, contact our team today for a no-obligation conversation and to see if we could be the right strategic marketing partner for you.
