For software-as-a-service (SaaS) companies, marketing can be an uphill battle. It's especially difficult in the current state of marketing, given the way Coronavirus is impacting business processes across the globe.
With corporate events, direct mail campaigns, and in-office planning suspended for the foreseeable future, it's essential that businesses adapt to these swift changes.
What to do? Enter performance marketing: a method of digital marketing advertising that means only paying for performance, as the name suggests.
To start: how exactly does performance marketing work?
What is performance marketing?
Performance marketing is a broad term that refers to any online marketing efforts, including ad programs, in which businesses pay per action taken by viewers of their ad. These actions can include clicks, leads, impressions, engagements, or sales.
For instance, let's say you decide to create an ad campaign with Google Ads, which offers a pay-per-click model. This means you will pay every time a user clicks on your business's advertisement. If a user just sees your ad but chooses not to click on it, you do not pay.
Performance marketing essentially functions the same as traditional marketing, with the same desired outcome. Its end goal is to direct your message toward the target audience you're looking to pursue. The key difference is that with performance marketing, you'll only pay if your advertising achieves a specified result.
With traditional advertising, you may pay for an ad on a website. With performance marketing, you could set the parameters before a purchase that requires some form of action from the viewer for you to pay. The parameters depend on what you're looking for out of your ad campaign (more on the specific metrics you'll use to gauge success below).
Traditional formats used in B2B SaaS performance marketing
In the marketing world, when most people think about performance marketing, these are the four types that cross their minds.
Below are some of the best formats you can use for performance marketing in the B2B SaaS space:
Social Media Advertising
This includes content placed on the many social networks you can use to advertise, including (but not limited to): Facebook, LinkedIn, Snapchat, Instagram, and Twitter.
Native advertising is the term for ads designed to match the site or platform on which they're appearing. These are appealing because they're written and made to feel as if they're a natural part of the page you're on.
According to LinkedIn, there are six types of native advertising including:
- In-feed units: In-feed ads are sponsored posts that appear in your social media feeds or on a publisher’s site.
- Paid search units: These are the ads that appear at the top of your Google search, but they often look like an organic search result
- Recommendation widgets: These appear on publisher sites, social media, and search engine results. The ad widgets recommend additional content you might like. Think about when you’re browsing Amazon, and a widget appears that says, “Customers who viewed this item also viewed.”
- Promoted listings: Promoted listings appear in online shops. Say you’re browsing Amazon for “brown boots.” The first few options generated might appear to be organic, but there’s a good chance they are sponsored.
- Display ads with native elements: These display ads are relevant to the site they appear on. Think of when you’re searching for a recipe for thanksgiving dinner, and an ad for Stouffer’s stuffing appears.
- Custom-made native ads: These ads are fair-game. That new Instagram Story filter for your branded event with a call to purchase a ticket — that’s a custom native ad.
Branded content tells the story of your company and brand and is typically entertaining, compelling, and visually striking.
Branded content helps you compete by creating more than just an ad. It uses storytelling to create an experience in which your brand — as well as the solutions you can bring the potential customer — is cast in a positive light.
Podcasting may seem intimidating at first, but like blog posts, podcasts follow the same pillars of inbound marketing. And it’s the perfect way to incorporate branded content into your marketing strategy.
Take, for example, an ad you hear during your favorite podcast. Sometimes this sounds like a traditional radio advertisement that fits into the episode like a commercial break. It is often a scripted ad read by the host, who then offers a complimentary discount for listeners. But other times, this sounds more like a friend telling you what they did over the weekend: casual, engaging, and personal. No matter how it’s done, the goal is to tell a story about a product or service to drive conversions.
New research suggests that marketers will spend $1 billion on podcast advertising in 2021, and for good reason. Sixty-five percent of podcast listeners consider purchasing a product or service after hearing about a brand.
Learn how we can help you create, produce, and promote your branded podcast.
Introducing video into your B2B marketing strategy is another way to tell your brand's story in a visually compelling way. Video can take all the detailed information you present in a white paper or case study, and condense it into a consumable and easy to digest format.
Like podcasting, videos are becoming increasingly popular for business, because they work. Not only are 85% of businesses using video as a marketing tool, but 88% of marketers report seeing a positive return on their investment.
Read “A Guide to Producing Video for B2B Marketing” to start promoting your company, brand, and product visually.
Performance partnerships are where you team up with influential people online to promote your sponsored content. These people can include:
- Social media influencers with large followings
- Affiliate bloggers who can craft blog posts with outbound links to your content or product information
- Business development partners
These campaigns can be highly advantageous in that they give you the perception of being used by an exclusive group of people with an incredible reach online. Tapping into those individuals’ already developed followings can help you increase your outreach exponentially.
Learn how B2B companies are building trust and credibility with potential buyers through influencer marketing.
The format you use will greatly depend on the key performance indicators (KPI) you need to determine success for your marketing campaign. If you're looking to build your email list, branded content may give your viewers the desire to learn more about your company and what you stand for. If your goal with this campaign is to increase impressions, performance partnerships and social media advertising may be a better channel to funnel your resources toward.
Now that we've discussed some of the common formats, let's look at the two primary metrics for performance marketing.
Metrics used to judge success in performance marketing
"Performance" can mean a lot of things to a lot of people. In terms of performance marketing, it refers specifically to the number of people who see or click a particular piece of digital advertising. There are two metrics by which performance marketing judges the success or failure of a piece of content:
Cost per mille (CPM)
Cost per mille, also known as "cost per thousand" or CPM, is the price a piece of content commands for 1,000 web impressions. An impression represents every time someone comes across the content online. So, for example, if a piece of content has a CPM of $1.50, that means that the advertiser will spend $1.50 for every 1,000 people who view the content online.
You should note that an impression, as a standard term, does not have the same definition as page views. If an advertiser purchases multiple spaces on a website, they may have two ads running at once. In that case, a singular visit to the site will count as two impressions and one pageview.
According to Investopedia, a typical rate is $2.00 CPM.
The other form of performance marketing is pay-per-click or PPC. Whereas with CPM you're paying for impressions, with PPC you're paying for clicks. When a viewer comes across your ad they can do one of two things: 1) simply view it without taking further action or 2) take the next step by clicking on the ad. Under PPC advertising, you only pay for viewers who actively click on the link to visit your website.
Both Google AdWords and Facebook offer PPC advertising models. Most PPC campaigns are based on keywords. The price of your PPC campaign may depend on the keyword you use. The more commonly searched a keyword is, the higher the cost of the advertising. That's because advertisers are likely to pay more for commonly searched terms as opposed to more obscure ones that don't receive as many searches.
Three main benefits of performance marketing
Should you go the performance marketing route? Here are three considerations:
- Low-Risk - There is less risk involved in performance marketing compared to traditional advertising. With performance marketing, you can access results in real-time and adjust your campaign components accordingly. Are you finding that your ads aren't converting? You have the means to tweak your budget or even stop running ads to avoid overpaying.
- Reach - Because you only pay the website or advertising platform if your advertising achieves a specified result, it's more likely that your brand will get put in front of the right people so that everyone involved can convert.
- Measurable - You can track and measure your advertising efforts down to the click. On most ad platforms, you can access campaign metrics and reports that will help you determine in real-time which tactics are working and which you should consider changing.
When it comes to your digital advertising, you want to make sure you get the most bang for your buck. With performance marketing, you ensure you only pay when you receive some sort of value in the form of an impression or a click. It's the best way to optimize your marketing budget in a way that enables you to avoid paying for ad campaigns that don't generate engagement.
If you'd like to learn more about what performance marketing is all about, and how to begin implementing it, reach out to our team of experts today.
Adept at communicating and connecting with people of all backgrounds, William brings more than 10 years of experience leading, developing, and implementing digital marketing solutions for B2B clients. He’s worked with a variety of clients, from large multinational corporations with multiple business units to local small businesses. William previously served as the Director of Digital Strategy and Insights for a Portland, Oregon-based B2B marketing agency, helping it grow from a team of 3 to a team of more than 40. In addition to leading analytics, marketing automation, SEO, paid media, and business intelligence, William also focused on mentoring and providing team members in his department with a clear professional development path.