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5 Reasons to Add Performance Marketing to Your Holiday Strategy

Last Modified: January 31, 2023


With its roots in affiliate marketing stretching back to the budding internet, performance marketing is becoming more developed as technology leaps ahead. With better ways to track clicks and engagement and gather demographic info, marketing has shifted into something more personal and specific. And if your marketing strategy isn’t striving for targeted customization, you’re missing the boat.

Enter: Performance Marketing

You need to go above and beyond simple affiliate marketing, which is just one piece of the performance-based package. By adding more results to your marketing structure, you can go further than paying for sales and start encouraging every step of the sales funnel.

Performance marketing is flexible enough to fit any industry and drive any kind of result. Whether you want to build your email list, engage social media followers, decrease cart abandonment, or all of the above, performance marketing can achieve those goals.

According to Business Insider, eCommerce sales from the beginning of November through the end of the year totaled a record $126 billion, and outperformed expected Year-over-Year growth. Mobile shopping continues to expand its impact: smartphones generated 51% of traffic and 31% of revenue — a respective increase of 25 and 34% over the year before.

Clearly, this trend in digital shopping needs to be taken seriously to make the most of the holiday rush. As brick-and-mortar stores scramble to remain viable, more companies are rolling out buy online, pick up in-store (BOPIS) programs. This order type rose by 47% for the period of November 1 to December 19, 2018, over the previous year. Retailers with a physical location would do well to capitalize on this increase and make sure consumers are aware of it.

Why You Need Performance Marketing

1 — Traditional Advertising Doesn’t Work

Roadside billboards or magazine spreads are no longer the advertising standard. Especially for web-based business, advertising has to be digital and dynamic, just like your company. Newspaper readership is declining, and many publications have gone online-only. By 2014, weekday print circulation had dropped to 35 million, down from 60 million in 1994. Advertising revenue likewise fell to under $19 billion from $65 billion in 2000, and this trend isn’t expected to reverse.

TV and radio ads are expensive and hard to target by demographic. Once you set up a TV or radio campaign, you’re locked into the full term of purchase, even if it proves unsuccessful.

Simple pay-per-click (PPC) campaigns are also risky, especially if you don’t sort out your target audience AND put a limit on clicks or payouts. Simply bidding for clicks can get you nowhere, as fashion company Fetopolis learned not too long ago when they lost $600,000 on a four-day Facebook ad campaign. Their ads fell prey to fake accounts from other countries that quickly racked up clicks with no sales.

That’s why you need…

2 — Metrics and Data

Segmentation is a crucial factor in raising your advertising ROI. By adjusting your approach based on the target audience, you drastically increase your chances of success. If Fetopolis had segmented their data going in, they could have limited the ads to reach only the US, where all of their customers reside. It would also have excluded the countries where most fake accounts are generated, like India, the Philippines, and Vietnam.

With the proper data, you can limit your ad reach to those who might actually buy your product, thus saving you money on wasted effort. Segmenting by age, income, education, and profession are the most basic categories to start with, but you can take it further. Whether or not someone is a previous customer, their current location, and other interests are all valuable data points on which to base your marketing approach.

Real-time tracking of results allows you to adjust your approach immediately, without being locked into costly spends that go nowhere. If your ads are gaining clicks but not converting to sales, you need to know before thousands of dollars have flown out the door.

Are last-minute cart upsells working better than site-wide discount banners? You need to know fast because consumer interest is even more limited than their budget. Find out what works, moment-to-moment, and take advantage of it by focusing your efforts. But you can only do that with detailed data reports that pinpoint exactly what led to the positive result.

3 — Spend Money for Performance

As discussed above, PPC ads come with a unique set of problems. You can easily hit your click ceiling, or bidding by other companies may price the ad right out of your range. PPC platforms like Google Ads can be a good investment, but only if you set your end goal. Until you know how to set the parameters of your ad campaign, you may be wasting both time and money.

A better way is to structure your advertising to cost money only when it generates revenue. The fact that affiliates are paid after a sale and not before is why they fall under the PM umbrella. But there are other performance metrics to consider.

Raising the average cart total, bringing back repeat customers, decreasing cart abandonment, and increasing your ad click-through rate are all valuable measures of increased ROI. Keep a constant eye on data fluctuations and see which channels generate not only the most leads, but the most conversions. Compare these rates with the averages for your industry, as well as your overall increase to see where you stand. Ad spend doesn’t need to be a giant mystery any longer.

4 — Better Budget Planning

What could be better than focusing on relevant spending? Spending nothing before you get an actual result. With commission-based ad spend, no charges are incurred until a sale is made, and your charge is based on the cost of the item. The sale of a lower-cost item costs you less to generate, and selling a higher-priced item costs you proportionally more. This is the basis of affiliate marketing, which has expanded into ads themselves.

No longer do you need to pay for placement or ‘reach’ as an isolated goal. You can now place ads that cost you nothing unless they generate a sale. What does this mean for your budget? Instead of allocating a lump sum to an ad campaign that may or may not have the results you hoped, the cost is taken from the profit margin of your product. Since that’s unlikely to change on a day-by-day basis, you can easily calculate exactly what commission percentage you can afford to spend.

5 — Refersion + Klickly = Performance

With the holiday shopping season upon us, consumers are looking for places to spend money. Conversions are waiting to happen, and everyone knows it — meaning that everyone is clamoring for the same dollar. While other companies waste money on static ad campaigns, you can make use of Klickly’s buyable ads.

Click-to-purchase ads capitalize on impulse buys that tend to unravel if too many steps lead up to purchase. Klickly solves this problem by getting the customer to checkout almost immediately. With their proprietary algorithm, Klickly sends relevant ads to consumers likely to buy the item and charges you nothing until you make a sale.

This pairs nicely with Refersion’s affiliate marketing network that automates affiliate onboarding and payouts. Track all of the data you need to find out which affiliates generate the most revenue, and why. Tracks sales data and consumer demographics, all in one dashboard.

And, best of all, don’t spend any money until after you make the sale.

That’s the power of performance-based marketing.

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Written by

Ruthie Carey
Ruthie Carey