What do you get when you combine an increasing reliance on marketing to build pipeline and the longitudinal goal of ROI?
Performance-based marketing is marketing’s response to an increasing need for output that can be traced to objectives and ROI. A performance mindset pushes marketing from individual actions to linked objectives and metrics that span departments to pursue ROI.
What is performance marketing?
Performance marketing is a data-driven approach to marketing planning that leverages historical ROI and benchmarks to inform targets, plans, and strategies.
Let’s split performance marketing into two aspects and analyze them to gain a nuanced understanding of all the implications; naturally, these aspects are performance and marketing.
Performance deals with measurement. It allows marketers to show why strategies work and apply those outcomes to new decisions and endeavors. Performance marketing requires criteria to benchmark performance against growth targets and previous strategies.
These performance indicators are tailored to the actions of your marketing team, ranging from a completed lead to a download. At the end of the day, performing is simply mapping an outcome to your marketing organization’s goals.
As we will dig into later, performance marketing requires tracking of all aspects of spend and denoting activities to their targets. Marketing Performance Management or MPM allows customers to control their marketing investments and organize metrics with impact goals. MPM spans from planning to results analysis and results in more informed decisions by marketers.
And what about the marketing part? These are the actions we are tracking: a download requires site traffic, and a completed lead requires demand generation. Marketers must be cognizant of both their actions and the outcomes they’re attempting to measure. It’s easy to get lost in the thrill of executing marketing activities, instead remain aware of the performance measure you have in place. As for the specific activities, the marketing part is what you’re good at, so we leave that to you.
Why is performance marketing important?
It prevents your teams from unclear goals and eventual underperforming. A failure to discuss and set criteria for performance results in multiple roadblocks as your marketing team strives for growth.
A performance marketing strategy protects company interests. Marketing efforts are applied with the precision required to support whatever your team has placed as their top interest.
Today especially, basing marketing actions on performance allows marketers to be meticulous in their actions. Running a performance-based marketing strategy supports success no matter your marketing bandwidth.
Did we mention ROI? Because it seems like everyone else is. If your team is expected to show ROI, and statistics say you are, performance marketing is imperative. Those same metrics that support performance marketing apply to demonstrating ROI. Performance marketing isn’t just beneficial to report ROI, it is ROI.
Performance marketing allows us to take control of our success indicators, avoiding vanity metrics and staying laser-focused on ROI, and pursuing high-level company goals. Harnessing performance as a means to shape strategy allows marketers to connect actions and targets without getting lost in a labyrinth of plans and ideas.
More than anything, performance marketing pushes your team to align with more than the baseline. Instead, use every small action to drive your team and your company towards long-term growth through identifiable ROI.
How Does Performance Marketing Work?
It’s time to embrace the power of performance marketing. After consulting our customers and industry research, we’ve collected some tips to make sure your marketing team has high-performance prowess.
It seems with every opportunity or issue within the marketing realm, finance alignment, or lack thereof, is always the touchpoint. Seeking efficient metrics to track marketing spend and progress towards KPIs is best done with a finance brain on your side.
Step one is agreement. What does success entail? What does a return actually look like? Marketing metrics must extend to become company metrics so marketing can show impact in a common vernacular.
With understanding comes better collaboration and the oh-so-coveted budget increases we marketers need to keep driving ROI.
Use ROI to make marketing plans
Without a target to orient your marketing team around how will anyone know where they’re headed? Or how to optimize activities? Marketing plans should be based upon ROI targets that are both accurate and anchored in company objectives.
ROI targets are determined using a minimum of the following:
- Industry Benchmarks
Always keep an eye on the competition. Mapping your ROI goals against other players in the industry ensures that you are staying competitive and taking the right approach.
- Historic Returns
Decisions should always be based on data, and there is no better data to determine ROI targets than previous ROI numbers. Plot your trajectory using historic data points to keep your target growth rate in mind and thinking of sustainability.
Once targets are determined they must be applied to marketing plans. Remember the metrics we discussed above, they’re embedded here to ensure that marketing goals have actionable targets and are measured at every step of the process.
Plans must attempt to account for every resource needed to carry out actions and measure success along the way. However, perfection can be an enemy of progress as seeking a golden marketing plan can result in wasted time and resources. In other words, don’t wait too long to execute your plans or they’ll cost you a fortune and never get out the door.
Driving ROI with performance
Performance marketing requires your team to be firing on all cylinders. Goals must be determined, plans must be set, programs must be executed, and ROI must be measured.
Building off a strong operational foundation, budget visibility, and clean data will make measuring ROI easier. Marketing actions should be derived directly from an ROI-based marketing plan.
Even further, visibility into budgets is essential for moving funds and adapting to new opportunities. Clean and automated data collection will support this agility as well as give marketers confidence in their decisions.
What is performance marketing software?
When it comes to performance marketing software, integration is everything. And who better to demonstrate how to leverage performance marketing software than real-life customer integrations. Let’s take a look at how Autodesk, Talend, and Trimble rely on Allocadia to increase their ROI through performance marketing.
First up is Talend, a data-based software company that wanted to turn marketing spreadsheets into actionable ROI statistics. Allocadia stepped in to provide budget visibility and clear data they needed to show ROI. For Talend, performance marketing required data, and Allocadia was prepared to deliver, allowing them to gain insight into their own performance metric, pipeline to spend data.
Performance marketing software in the case of Talend was a vital integration to their tech stack that unearthed connections between jumbled data and company objectives.
What else does performance marketing software do? Aligning ROI to plans and marketing activities removes the potential for wasted marketing resources as Trimble learned when they integrated Allocadia into their tech stack.
Allocadia provided visibility into budgets and a clear path from marketer activities to company objectives. The end result: 10% of redundant marketing spend saved. The ability to compare marketing performance across divisions allowed Trimble to allocate budget more efficiently.
Autodesk adopted a performance marketing strategy in response to a classic issue of modern marketers: siloed execution, a lack of spend tracking, and incoherence in performance reporting.
Using Allocadia as the foundation, Autodesk launched a marketing performance management program to combat their issues and provide long-term visibility to their marketing processes. Performance marketing software was critical for Autodesk to easily measure and report impact metrics while remaining in complete control of their marketing spend.
Autodesk made performance a marketing priority and can now see ROI in real-time to make informed marketing decisions and continue to see incredible growth. Allocadia integrated seamlessly into Autodesk’s tech stack to help turn their marketing data from a random set of numbers to a clear ROI indicator geared towards performance and bolstered by a goal-driven marketing plan. We can see their integration of Allocadia into their tech stack here:
This commitment to performance drove AutoDesk to win a program of the year award at the Forrester conference as they continue to impress with their high-performance marketing operations platform.
Performance marketing is the backbone of any team seeking to maximize impact and accurately measure ROI. Turn your marketing strategy into a high-performance, impact-making, growth engine with performance marketing.