The Art of Performance Marketing

Performance marketing is a model of Online Marketing in which measurable results are pursued. Profitability is measured by comparing the profit generated by the traffic campaigns with the cost we have invested in attracting that traffic.

Learning how to master this form of marketing is one of the most effective ways at our disposal to rapidly increase sales of both our own products and third party products through affiliate networks.

Results require investment

The first thing you should do if you want to use this strategy is to make sure that the traffic you get to your page through your campaigns is an instrument for the success of your business. Every penny you spend on it is an investment that can also generate a return, if you apply the techniques I’m going to talk about.

In the beginning, the return will be valuable data about your market, what I call “knowledge for success“, information that will indicate where to promote your product, who is your ideal customer and how you should formulate your offer to fit the market.

As you use the knowledge gained to optimise your campaigns, you will begin to receive an economic return; For every dollar or euro spent on attracting visitors, you will receive a quantity of sales of your product.

Little by little and thanks to the accumulated information, the sales revenue generated by your campaigns, will exceed the expenses to attract the visitors and at that time, it is said that your campaign is already in a positive ROI phase.  In other words, you are generating a profit for each visit purchased.

At this point, the money you can earn will only depend on the volume of visits to which you can expand your campaign and your financial capacity to cover that increase.

Advertising and traffic

In 1898 Elias St. Elmo Lewis, a pioneer in advertising and sales formulated the concept of AIDA.

The AIDA is a classic model that describes the effects that sequentially produce an advertising message from the perspective of our audience. The word “AIDA”  consists of the acronyms of the concepts of attention, interest, desire and action.

There are four steps that the customer must go through until they decide to buy a product (good or service).

I believe that these steps exist in the advertisement process, where each impression of that ad, text or banner competes for capturing the interest of users and for getting them to the action (click on the ad ). As well as existing on the landing page itself, after the announcement, in which it is necessary to re-pass the user through the same stages to attract attention, then arouse interest in the offer, then awaken the desire for acquisition and, Finally, cause the purchase of the product or reaction to the message.

More than a century later, this model works and can still is applied to create results-oriented online advertising campaigns. Our goal is – the income we obtain each time a user completes the “Action” step, should be Greater than what it has cost us to take that same user through the mentioned stages.

The advertising models on the Internet, unlike traditional advertising, give us the possibility of paying not only for advertising space to try and capture the attention of users (showcase model). But we have access to types of traffic that sell us visits which have already gone through some of the steps of the process. In the following articles, we’ll look at some of these types of traffic and how we can use them to create performance-oriented marketing campaigns.

Before reviewing the types of traffic, there are three fundamental steps that we must take, without which it will not be possible to apply the results marketing model to any source of traffic:

  • Select your own product or a third party product that you are going to promote
  • Define what it means for you that a user does the “Action” step:
    • A visit
    • A sale
    • A subscription
  • Define the value (in money) of each completed stock. This will normally be the income we get for each sale or subscription, individually or, if we have enough data, throughout the “lifetime” of a client.
  • Implement tracking of each sale also called conversion tracking in order to obtain the exact information about what visit has generated that sale. What source of traffic it comes from, what are the parameters of  the campaign that has generated it, among others.

Recommendations to start

I always recommend starting with an existing product, which has already had sales and tested volume so that you can focus only on your promotion.

Select a product in which the value you get for each completed action (sale or registration) is as small as possible at the beginning. Remember that at the beginning you will use your campaigns to learn and to “buy knowledge for success”. This knowledge is much more expensive for a product for which you get an income of 150 euros per sale than for a product that generates 5 euros. Once you’ve got your campaigns generating a positive return for each visit you buy, you can generate a lot of money by increasing the volume of traffic.

Work with reputable companies that have their own affiliate program or with recognised affiliate networks. Always research in relevant forums and communities before signing up for one.

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