Do you know how well your marketing ads are performing? While attribution used to be tough for marketers to nail down, today’s digital ads are often part of a performance marketing campaign. Digital advertising has changed the game for tracking ad performance. But with ads on multiple channels, keeping track of each channel’s performance can be complex. The best way to solve this is to integrate your marketing data into one place that can report on all your ads at once. We’ll get into that in a minute. But first, let’s take a look at performance marketing.

What is performance marketing?

Performance marketing is a form of digital marketing that is driven by measurable results. In other words, marketers target specific audiences with paid ads, measure feedback, iterate, and hone in on what works best — based on metrics of how that ad is performing. The goal is to motivate the audience to take some form of action rather than just learn more about your brand.

Performance marketing is a descendant of direct response marketing (think mailers and flyers sent to a targeted list), and operates in a similar fashion. Each digital ad (used to be mailer) costs budget, so the targeted list is carefully crafted for maximum outcomes. The goal is to get the audience to do something — call, click, download, request a demo, buy now, etc. Because it’s digital, the ad’s performance can be tracked by number of impressions, clicks, likes, and more. Marketers can quickly see how well a paid ad is performing, then adjust it accordingly for a better response. Unlike in the direct response days, marketers today have a wealth of big data about their audiences available to them, which makes it much easier to craft resonant ads.

4 common types of performance marketing

  • Paid social media advertising. These run on the major social media platforms like Facebook, Instagram, Twitter, LinkedIn, TikTok, etc. To be performance-based, these ads must be used to drive conversions.
  • Paid search. Here you run ad campaigns to drive traffic from Google, Bing, or other search partners , and tailor these campaigns based on the types of keywords your customer would be searching for.
  • Influencer marketing. Popular influencers promote products and services to their followings. New influencer marketing management tools make it possible to track influence partnerships based on performance.
  • Sponsored content/native ads. This includes sponsored content and ads that you pay a publication or partnered website to host. Sponsored content is usually required by law to be disclosed as such.

Performance marketing differs from brand marketing or market validation, which strive to build broad brand awareness and validate market relevance. Both are much harder to measure.

Challenges of running digital advertising

Performance marketing sounds simple enough, but there’s a science and an art to it. Since it depends on analytics, many of its primary challenges relate to data:

  • Lack of omnichannel insights. Most marketing teams will use multiple channels and run simultaneous performance marketing campaigns. Each platform has their own reporting features, but keeping track of all those different metrics can be daunting and complex. Marketers need to be able to have a single view of their campaign performance across all channels — after all, this is where the vital, actionable, and budget-impacting data lies. To do this, you must start with the right metrics.
  • Inability to optimize at scale. Without a clear, singular view it becomes almost impossible to optimize ad campaigns at scale.
  • Wasted ad spend. A lack of insights can easily lead to misspending on ads and channels. Whether failing to recognize where ads are underperforming or missing opportunities to boost performance because the data is murky — performance marketing that doesn’t have an aggregated data analytics capacity will cost more than it should.

So how do you get the data you need to drive better performance and avoid wasting budget?

Measuring campaign performance

Performance marketing, by definition, requires metrics to gauge impact and adjust tactics. Here are some of the most common metrics used by performance marketers:

  • Cost per thousand impressions (CPM). This measures the cost to generate 1,000 views of the ad. It tells you how expensive it is to advertise on that channel, and it’s competitive. More competitive placements will have higher costs.
  • Cost per click (CPC). This gauges what it costs to get someone to click on the ad to reach your website or landing page. However, there are different definitions of this. Google uses the term “click” to refer to clicking through to your site, but Facebook defines “click” as any click on your ad, including a Like. To compare fairly, you must track “link clicks” on Facebook. Your ad’s click-through rate (CTR) will often influence your CPC. Higher click-throughs lead to a more cost-effective campaign.
  • Cost per conversion. This may be cost per purchase, customer acquisition cost (CAC), cost per lead, or cost per engagement. It’s also a highly important metric for performance marketing because if you reach your cost per sale (CPS) or CAC then you can scale your campaign and drive more sales. (Learn more about how to calculate these.)
  • Conversion rate (CVR). Cost per conversion helps determine cost effectiveness, though CVR will tell you the effectiveness of a campaign regardless of ad spend. You will likely have other metrics as well, such as big data from social media data extraction or web scraping, that gives you a broad view on a specific topic.

How is big data used in advertising?

Big data enables marketers to gain more information on their audiences so they can create targeted ads that lead to more conversions. Big data — often garnered via social media data extraction or web scraping — can provide insight into trends, hot topics, competitors, customer sentiment, and demographics to help marketers craft truly tailored ads.

However, to gain that holistic picture, you must aggregate your collection of data and then run analytics on it. To do this, you need a data analytics tool that will integrate all your marketing data, wherever it lives: AdRoll, LinkedIn Ads, Google Ads, Campaign Manager, Bing Ads, Snapchat Ads, TikTok Ads, and Meta (Facebook and Instagram Ads).

Aggregating data from your ad stack

One of the challenges marketing teams face is compiling data from all their ads into one data warehouse. Ad platforms use different APIs, different data formats, and require manual extraction or ETL processes to extract data into a spreadsheet — then it must still be loaded into a data warehouse. This process takes time, is tedious, and does not give marketers the crucial holistic view they need of all their ad data. The best way to solve this is to automate the data extraction process with a ETL tool like Stitch.

See how Stitch can help you extract your ad data

How Stitch helps solve data analytics issues

Stitch is a simple, extensible, no-code ETL tool designed to enable marketers to have analysis-ready data at their fingertips. Stitch makes it easy to rapidly integrate data from all marketing sources — including advertising channels, CRMs, email marketing, and more — into a cloud data warehouse for analysis. With zero coding, you can collect and process important performance marketing metrics such as CTR, conversions, impressions, clicks, CPM, and CPC. Stitch can integrate with over 140 partners in just minutes and continues to sync with new data automatically, so marketers can track all their performance marketing campaigns in one spot to drive better results.

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Don’t have a data warehouse solution? You can easily build one in minutes on platforms like Google BigQuery. See our data warehouse comparison breakdown and learn more about how to set up BigQuery for free.

Stitch integrates with many popular advertising partners — see all integrations we offer here.

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