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What is performance marketing?
An overview on performance marketing strategies and how they can be adapted for CPGs selling into retail.
When you consider the investment CPG brands put into marketing strategies, tying every penny spent to every dollar earned feels like it should be table stakes.
Having the ability to zero in on campaign results down to the exact ad or click, analyzing what drove a consumer to complete a purchase, and using that data to optimize future campaigns - and future ad spend - is every marketer's dream.
This strategy, known as performance marketing, gives power to the advertiser. The results of an ad campaign are visible and, therefore, optimizable. As the name suggests, it’s marketing based on performance.
Traditional brands selling primarily via brick and mortar retailers and digitally native brands typically associated with direct to consumer or DTC strategies can benefit equally. Launching brands online is a great way to quickly test a product and market segment without traditional retailers and buyers involved. However, retail category managers are still important for omnichannel brands as newer and emerging brands find themselves paying a premium for online customer acquisition, sales, and fulfillment.
There are three key benefits to implementing performance marketing strategies:
Arguably the most useful tool in a performance marketing strategy is the data that’s captured to tell the story of what ads are performing well and why.
Performance marketing concentrates on boosting performance for a brand’s specific business goals, typically measured by ad clicks, impressions, leads or sales. Through this channel, marketers are usually thinking in terms of ‘cost per click’ (CPC) or ‘cost per lead’ (CPL) when planning and tracking campaign budgets and goals.
With performance-based marketing, brands can monitor ad campaign metrics in real-time, adjust or reallocate budget as needed, and even put a full stop on campaigns to avoid overpaying for under-performers.
Gaining a measurable understanding of what ads are performing well and why allows marketers to make results-based decisions that optimize for success and inform future targeting, creative, and budgetary decisions.
Performance marketing allows for a versatile advertising approach. When one channel or format isn’t hitting its goals, brands can quickly pivot to another that can bring better results.
This prevents brands from spending their marketing budget on ineffective tactics, and opens up new opportunities for targeting and testing. Examples of commonly used marketing revenue channels include:
An effective performance marketing plan can help brands acquire a larger and more diversified audience that wouldn’t otherwise be captured with traditional advertising–or at least not as quickly.
Performance marketers have the ability to use the real-time data and insights from successful campaigns to create lookalike audiences based on the audience that interacted with that particular ad. This allows brands to optimize their placements for channels that are high-performing, target the customers that are most likely to engage or purchase, and identify new ad creative opportunities for particular segments.
Using a data-driven approach to engage unique or previously hard-to-reach customers not only increases brand awareness, but also maximizes overall return on ad spend (ROAS).
Many direct-to-consumer brands have a built-in digital window to their performance marketing metrics. They’re able to test ad creative on any given marketing channel, see the audiences that are engaging (or not engaging), adjust the budget so they’re only spending on successful campaigns, and ultimately see which customers convert from said ad.
CPG brands selling into retail haven’t always had the same luxury, however. Without access to ecommerce sales data, implementing a performance marketing level strategy can be next to impossible. Until now.
With Pear Commerce, CPGs can make data-driven decisions confidently by getting real-time, accurate insight into campaign performance based on full-funnel attributable e-commerce sales data.
Connect with our team to learn how Pear can help your brand access the performance marketing level data you’ve been missing. →
Five years ago, retail ecommerce didn’t exist. Today, supporting the channel is table stakes for consumer packaged goods brands.
This playbook is designed to guide CPG brands from the stages of awareness to purchase at retail. Whether you’re interested in retail ecommerce as a new channel opportunity or looking to level up existing efforts, The Retail Ecommerce Playbook covers tools, tips, and examples to help your brand succeed.
