Why the discipline can do more
Performance marketing is seen as an effective tool for generating sales, but not for much else. Yet it can do more. All companies need to do is fully leverage the potential it offers and make sure they use the information collected during performance campaigns to reach the right conclusions. It’s time to look at it differently.
Data collected from performance marketing is precious. It provides insights into the desires and needs of potential buyers. The interaction between brands and people can provide companies with insights that are relevant for their business and can be used to promote their business as a whole.
Need a few examples?
Take, for instance, a home shopping channel that wants to attract new customers. It takes the knowledge gained from affiliate marketing and successfully selects only those products for its daily campaigns that are likely to turn the largest possible number of interested parties into customers – and addresses precisely those interested parties who, as a target group, offer the channel the greatest ROI in the long term.
In another scenario, search engine marketing results can help a company to optimize its supply policy. The click behavior on a textile manufacturer’s SEA ads reveals that luxury beachwear is not, in fact, ordered in the spring, but actually in time for Christmas – especially if the recipients of the gift have booked a beach vacation.
However, performance marketing insights aren’t just useful for gaining new customers and improving supply policies. They can also help to optimize internal processes by identifying trends derived from customer buying behavior sooner, for example, and making it possible to adjust purchasing, product development and logistics accordingly.
For media planning, the creative strategy and the media strategy need to run in parallel with each other. This can be optimized with the insights from the performance campaigns. In practical terms, this means that media planning will take on a three-pronged approach in the future and should be termed “media learning”: The media test is followed by media insights and media adaptation.
Indeed it does. But in order for companies to use performance marketing to generate insights that promote their business as a whole, they need an integrated setup that builds a bridge between their lines of business and targets. If we use the insights from campaigns to their full to optimize not just sales, but also the business as a whole – including the business model and business targets – only then will performance marketing reach its full potential, and only then will people rightly start to look at it differently.
A German version of the article was published on adzine.de.
About the author:
Dariusch Hosseini is Managing Partner at UDG United Digital Group and is responsible for the Media and Performance business division. He has 20 years of experience with online business at a European level and has worked with global players such as Bertelsmann and Microsoft. His most recent position before joining UDG United Digital Group was as Head of Sales for the DACH region at Facebook.