With a defined brand and a messaging that resonates with your targeted audience, you will have some of the elements needed to get started with performance marketing.
Our PPC & Paid Social expert, Louis Austin, defines performance marketing as "marketing where you've got a clear goal that you need to hit, and you're using paid channels to do that."
Once your product is launched and you are ready to enter an extensive go-to-market phase, determining the right channels for your growth will be one of the main objectives. So how shall paid channels be explored?
Part 1: Defining the objective
"You need to start understanding the mechanics of your business."
- Kim Connor Streich, a consulting commercial marketing strategist
It all starts with an objective. Once your product is launched, you'll be able to gather enough insights on your business from initial testing with your first users. Following this understanding, you can start defining your objective with performance marketing. Some objectives can be generating leads or selling a product.
Kim Connor Streich, a consulting commercial marketing strategist at Launch Mappers, has over 10 years of experience across the digital and organisational landscapes. He shares that "you want to proceed with caution, and you want to be testing channels or specific aspects of your product rather than just spending money to acquire new users."
Early-stage companies' main objective often is to acquire new users, no matter the cost. But by only focusing on the volume of new users, you can quickly lose money and therefore not understand how your marketing investments can be profitable. Understanding the mechanics of your business, such as the cost of acquiring users vs how much they will cost you, retention, churn.
For example: if it's costing you £100 to get a new customer who will be worth £1000 over the next five months, that's probably a good investment. If it's the reverse and it costs £1000, and they're worth £100, that's a bad investment.
So, you'll need to determine the area you will focus on and how much you can spend for this investment to be profitable in order to get started.
On top of that, you might want to leverage paid channels for different objectives, such as growing an email database or selling other products. You might also want to reach numerous various kinds of audience personas.
It is better to focus on the most important element you need to grow with the right audiences to get started.
Part 2: Defining the audience
One of the undeniable benefits of performance marketing is being able to reach new audiences that are beyond your organic or owned audiences. But you shouldn't reach anyone just because you can as soon as you start.
Defining your audience is something you've most probably done as part of your growth strategy. One part of the equation is how to position your solution within your marketplace. You also need to determine, alongside, the customers who will benefit in the most significant way from the value of your solution.
If your key messages were also crafted for each of your ideal customer profiles, you're ready to start defining the approach to which online advertising platforms are more suited for your audience. For example: if your audience is purely B2B and your solution is geared towards professionals, LinkedIn could be interesting to look into.
The more you understand your audiences, the easier this next step will be as well as everything that will follow.
Part 3: Defining the approach
There are many platforms to advertise your solution on. You might have heard the following: Google Search, Google Display, Facebook, Instagram, Youtube, Snapchat, Tiktok….
We're going to break down the main channels with the following explanations:
- What are they most suited for?
- Which objectives should you attribute to which platforms?
- Google Search Ads:
This format should be leveraged for products with an existing search base. If your product is something that people will be searching for because they know about it, need it or want it, then that's the place to be first.
If there is no search intent there because they don't know your solution exists, or you need to generate awareness for your product first, then Paid Social is more suited.
- Paid Social (includes Facebook Ads, Instagram Ads, Tiktok Ads, Snapchat Ads, Twitter Ads)
You will disrupt people whilst scrolling through their news feeds or stories on such platforms. You can reach your audience based on keywords found in their tweets, for example.
Social media platforms gather a lot of data about users' demographics, such as their interests, dislikes and likes. You'll be able to generate that intent and leverage it to move them away from the platform onto yours to convert them into paying customers.
- Google Display Ads:
Similarly to Paid Social, with Google Display Ads, you will also be reaching people by disrupting them whilst they're looking through other websites. Just like Paid Social, you can also leverage this disruption with retargeting ads to remind people about your product or your service and that you're there.
Overall, most of the time, Google Ads, Facebook and Instagram Ads generate new leads because they are geared primarily towards driving conversions cheaply. Some other platforms are also, but they can be more expensive, depending on your industry and product (think LinkedIn Ads). So for early-stage startups with a limited budget, Google, Facebook, and Instagram are usually the go-to platforms.
Part 4: Measuring success
You might feel that there are many things that you still need to understand, especially from a financial point of view, before getting started. It's worth noting here that your hypotheses will be confirmed or not by your metrics.
Since it's highly data-driven, you'll be able to understand precisely what is going on. As Louis shares: "with paid media and performance marketing, it's backed up by data, so you know exactly what you're getting with your spend providing everything's tracked properly.
Data is your trusted source of information. There are two kinds of metrics you'll want to focus on, traffic-focused ones and conversions-focused ones.
Key traffic-focused metrics across all platforms are clicks, impressions, cost per click, and click-through rate. There's usually a correlation between click-through rate and CPC; the higher your click-through rate, the lower your CPC, and the better generally it will perform. As you go, it's essential to work on improving your click-through rate as much as possible.
In terms of conversions, you want to focus on cost per acquisition and then Return on ad spend (ROAS). For example: if you've got a week where the cost of acquisition is higher because there's a dip in conversion rate, they usually all kind of link.
So you essentially want to work as hard as possible on your conversion rate, to improve your cost per acquisition and your ROAS.
There are many more key metrics you could focus on. Still, your business metrics will also provide many insights, such as the average order value. Sometimes if that's lower, it can impact your ROAS, for example.
The overarching best practice is to continuously ensure your tracking is set up correctly before launching any campaigns. As we've stated previously, performance is data-driven, so the more the data you can gather, the better you'll be able to improve your campaigns continuously.
Summary on performance marketing:
Performance marketing can be a daunting project to kick off, which is why one of your most significant assets is to have the right skills accompanying you throughout this project. It could be an external provider or an internal talent.
From there, you'll be able to leverage your brand and highlight your USP in a cohesive way that speaks to your audience to meet your objective in performance marketing.