Why performance always matters
Marketing only makes sense if the investment pays off. That is why it is so important to have a marketing strategy in place and clearly defined goals from the outset. Only then can you select the appropriate advertising formats and channels based on your goals and target audience. For example, if you sell products aimed at mothers of young children, you cannot advertise on Snapchat, which is the domain of the younger generation.
I WOULD LIKE ADVICE ON MY MARKETING STRATEGY
How can marketing be measured
We measure each online channel slightly differently. With content, we’re interested in whether people have read the article and clicked the button; with PPC and banner ads, we track their click-through rate in relation to cost.
Generally, we can define a metric called ROI – Return on Investment. We surely agree that this metric is absolutely crucial. It is expressed as a percentage and follows a simple formula.
ROI = (net profit – initial investment) / initial investment * 100
The higher the ROI, the better, of course. An ROI lower than 100% means a loss. What is the ratio of money invested to money earned from advertising?
How effective can marketing be?
Performance marketing is how marketers work. Its aim is precisely to maximise campaign performance. It focuses on optimisation so that more users click on your banner and as many of them as possible are converted (i.e. purchase a product, submit a form, and so on). Performance marketers primarily address the allocation of investments and strategies so that performance meets your expectations.
In marketing, it is not the size of your budget that matters, but performance. Even a small campaign, if it is of sufficient quality and effective, can yield interesting business results. However, with a smaller budget, you will reach fewer users. Performance-focused marketing helps you grow above all else.
How performance marketing works in practice
Imagine you’re selling vegan cookbooks, which is a fairly niche product for a fairly niche target audience, and you can invest 5,000 CZK a month in marketing.
Thanks to an initial study, you know that your target audience across the whole of the Czech Republic will be, say, 60,000 people; to reach them all, you’ll need to invest 15,000 CZK a month in marketing. But you’re just starting out and don’t have that much money available. Such a large investment puts many entrepreneurs off. Performance marketing, however, is a great way to reach users even on a limited budget.
First, you choose the most relevant channels for your business. In the case of vegan cookbooks, these will be social media platforms where vegans meet and interact. It’s always worth investing in quality content and SEO. Your investment allocation might look something like this.
You continuously monitor the results and optimise your campaigns to ensure they perform as effectively as possible. As the ads are effective, your customer base grows, and with it, your turnover. You can then gradually invest larger sums and, over time, reach the entire group of potential customers.