Podcast Audio Transcript
Mimi: Hello listeners, this is Mimi; thank you for tuning in to yet another exciting and informative podcast from us at Infosys BPM. Today, we are discussing about the Impactful evaluation of performance marketing campaigns. And to talk about this, we have here with us, Sreepriya Swaminathan, Sr. Domain Principal – Digital Interactive Services. Welcome Priya. How are you?
Priya: I’m doing great, Mimi. Nice to be part of this podcast.
Mimi: Performance marketing is an important element in the marketing strategy of many organizations. It comes with several advantages as we understand. Priya, could you give us more clarity on this concept?
Priya: Of course, Mimi! Performance marketing is a type of digital marketing that focuses on “results”. It is when a brand says that they’ll pay the digital marketing service provider only when their business objective is met, or a specific predefined goal or action is undertaken. In performance marketing, we only track the metrices that have direct impact on the ROI. There are several performance-related metrics that can be monitored and tracked using digital analytics to help marketers interpret a campaign's performance and make appropriate changes to deliver maximum impact.
First let me give you the 5 base metrices that marketers use to assess a digital marketing campaign. These metrics include:
- Impressions
- Clicks
- Clickthrough rate (CTR)
- Cost
- Conversions
And then, there are 5 major metrices that marketers need to keep in mind while creating a performance marketing campaign:
- Cost per click
- Cost per impression
- Cost per sales
- Cost per lead
- Cost per acquisition
Tracking and analyzing these metrics can help marketers optimize their campaigns and achieve better ROI.
Mimi: I see, so there are several ways to measure the effectiveness of campaigns. Closely tracking these metrics will give a clear idea of how your marketing campaigns are performing.
Can you explain some of these metrics in a little bit more detail?
Priya: Sure Mimi. I will try to cover these metrics in such a way that it’s easy to understand.
- First of all, an impression is a basic metric that tracks how often an ad has been viewed by a user on a website or app. It is measured with a metric called cost per mille (or CPM) which indicates the price of one thousand ad impressions. Clicks measure the number of times users clicked on a particular ad and followed the call to action (CTA) link. It is measured with a metric called cost per click (CPC) which indicates the actual cost the advertiser has paid for each click.
- Click-through rate (CTR) adds more meaning to impressions and clicks and is calculated as the total number of clicks divided by the number of impressions.
- Cost, as you can imagine, measures the ad spend.
- Conversions take things beyond clicks and CTR, and track the specific actions taken by users who have read the ad and clicked on the call to action. For instance, when you click an ad and download a whitepaper, it’s tracked as a conversion. Finally, Cost per conversion helps marketers evaluate which campaigns are providing the best ROI on their marketing budget, and we have 3 types of cost per conversion metrics for performance marketers:
- Cost per sale is when the advertiser pays for a sale driven by an ad.
- Cost per lead is when the advertiser pays for a lead, website visit, or form signup.
- Cost per acquisition is when the advertiser pays when the target audience completes a specific predefined action. This can be a click on the ad, sharing the ad in social media, or interacting with a video.
With the way performance marketing is shaping up, we are seeing that brands are more comfortable to adopt new-age metrics like average revenue per user (ARPU) or return on advertising spend (ROAS) rather than the traditional metrics that we have been using since the dawn of digital marketing.
Mimi: Interesting, Priya. Yes, we can see a push towards more action-oriented tracking from digital marketing focused companies these days.
Could you also touch upon the benefits of implementing performance marketing for organizations?
Priya:Sure. Mimi, there are plenty of benefits in implementing performance marketing campaigns. Let me give you details of some of them.
Firstly, you pay for results: The most important benefit of a performance marketing campaign is that brands need to pay only for the results or for a predefined action identified before the start of a campaign. This is extremely useful when it comes to the lower funnel campaigns that drive purchase or signup.
Secondly, data-driven decision making: Performance metrics provide businesses with valuable insights into the effectiveness of their marketing campaigns, allowing them to make data-driven decisions on where to invest their resources and how to optimize their campaigns for the best results.
Thirdly, cost savings: By tracking performance metrics, businesses can identify areas of their campaigns that are not performing well and adjust their spending accordingly. This helps them avoid wasting resources on campaigns that are not delivering results.
And most importantly, improved ROI: By design, performance campaigns improve the overall ROI of marketing budgets, giving us leeway to experiment with marketing campaigns.
Mimi: That’s amazing. As I can see, performance marketing can be quite rewarding for corporations. Priya, thank you so much for your thoughts on this topic.
Priya: It was a pleasure, Mimi.
Mimi: Dear listeners, if you enjoyed our podcast today, please don’t forget to share and like it on social media. Our social handles are mentioned in the podcast page. The podcast will be available on various platforms like Google Podcasts and Spotify, in addition to our website.
Also, if you have any queries, do reach out to us through the email address on the podcast description. Watch this space for more exciting podcasts coming up. Once again, thank you for tuning in, stay safe and stay sharp. Have a nice day!
