What are the Limitations of Performance Marketing?

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Performance marketing sounds like the ultimate in marketing endeavors.  The term was coined early on with the advent of digital marketing, specifically around the introduction of Google Ad Words.  Performance marketing describes specific marketing tactics designed to achieve goals—defined as clicks, conversions, leads, bookings, purchases, etc.  It’s about attaining direct results tied to specific marketing campaigns.

In many ways, performance marketing is good.  It forces business owners and marketing professionals to carefully consider budgets and expenses related to advertising and promotion.  No one wants to spend money hoping that someday something just might pay off.  Return on investment (ROI) is increasingly important as companies strive to achieve more with fewer resources.

A few examples of common performance marketing strategies include:

  1. Social media marketing.  While posting general items to social media platforms is free, there are also opportunities to purchase advertising.  These paid advertisements can be costly but offer more ability to reach viewers within a defined demographic segment.  Social media platforms provide several tools to measure the effectiveness of a campaign, from viewer engagement to button clicks.  Advanced tools can trace activities to conversions and sales.
  2. Search engine marketing (SEM).  SEM uses advertising that appears on search engine results pages to drive traffic to a specific site or page.  For example, if you use Google to search for “duck shoes,” you’ll see several ads to purchase duck shoes, and you’ll also see sponsored (or paid) results at the top of the results list.  Each time someone clicks on one of these paid links, a traceable path begins to provide measurable statistics.
  3. Sponsored content.  Sponsored content is educational material written by a company to sell products or services related to the content.  For example, a company might write and sell a whitepaper to a magazine to attract readers’ attention and entice them to make a purchase.  Physical content may come with a unique “code” the reader can use during inquiry to get a special deal, while electronic versions have links with traceable clicks.
  4. Influencers.  Influencers are a human form of sponsored content.  Companies pay well-known celebrities to promote their products, from paid endorsements to creating videos showing how a product works on their social media pages.  Unique purchasing codes allow the marketing company to report how much product was sold via the influencer’s efforts.

What are the limitations of performance marketing?

What are the Limitations of Performance Marketing?It seems like performance marketing is the way to go, right?  There’s a specific activity tied to a goal with measurable results.  What more could you ask for?

Unfortunately, marketing, advertising, and promotional activities all involve human psychology.  The goal of marketing is to stand out from the crowd and make a favorable impression in the consumer’s mind.  Of course, we want conversions–meaning taking that awareness and turning it into a purchase.  Strategies and tactics used to influence human psychology and behavior are not always directly traceable.

For example, consider the process you used when your water heater or other major appliance broke.  You probably had visions of storefront logos or memories of television commercials you’ve seen in the past.  You might likely think about an advertisement you saw a year or more ago and decided to call that company for a quote.  It is probably impossible to know precisely which marketing dollars led to that particular purchase, and it may be the culmination of many strategies and campaigns over the years.

Or consider the whole aspect of trust.  Consumers list trust as one of the critical factors in making a purchasing decision.  Developing trust involves everything from good branding to repeatedly positive consumer experiences.  No amount of social media paid advertising will change the amount of trust developed (or not) in other marketing efforts. Yet, it’s impossible to tie the effectiveness of those efforts to specific sales results.

What’s the best solution?

Ultimately, companies need a blend of effective performance marketing amongst a foundation of general, professional marketing strategies.  A marketing agency that is experienced with building well-performing brands and at the same time focuses on designing campaigns with measurable results in the most optimum use of marketing dollars.  To get the results you want, you need both.

At Paradux Media Group, we know how to increase the visibility of your business online, and we’ll help you implement straightforward strategies to boost your business results.  Our team can help you with everything you need to attract customers online, from evaluating your website to creating a brand-new online presence and achieve greater search engine optimization.  Contact us today to learn more about the benefits of joining our flock.

Angela Peacor

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