How do performance marketing platforms work? Everything you need to know in 2021
Performance marketing platforms help marketers track events and provide the data they need to optimize performance over time. This is an essential component of performance-based marketing that provides the insights needed to push towards a marketer’s most ambitious goals.
So, how do performance marketing platforms work? In this guide, we cover the fundamentals of the performance marketing ecosystem, share how to measure performance, and define key terms.
How do performance marketing platforms work?
Performance marketing is the process that requires advertisers to pay for each time the desired action is completed by users. This desired action, which could be app installs or clicks on an advert (ad), is the measurable result that can be tracked. Performance marketing platforms track these events and deliver this data to the advertiser – providing advertisers with the insights they need to optimize their campaigns and push towards their targets over time.
Performance marketing involves an advertiser (with a product they want to advertise), a publisher (with advertising space), affiliate managers (tasked with connecting advertisers with affiliate networks), and third-party tracking platforms (to track events for insights and data analysis). The more data you have, the more insights you can discover and use to gain a competitive advantage.
An advantage to performance marketing is that there must be a measurable result for publishers and affiliate partners to receive payment. This is agreed upon before a campaign begins. This is a target-driven approach that requires marketers to adapt their strategy and continually optimize for best results. Performance marketing KPIs that align with your company goals can include metrics such as:
- Leads: The number of leads that have been generated as a result of your publishers’ and affiliate partners’ exposure.
- Installs: The number of users who installed the advertiser’s mobile app as a result of your publishers’ and affiliate partners’ exposure
- Churn: The number of users who have stopped using your mobile app after a defined period of time. For example, Day 1, Day 7, or Day 30.
- retention rate: The number of users who are still using your mobile app after a defined period of time. For example, Day 1, Day 7, or Day 30.
- Return on Ad Spend (ROAS): The amount of revenue generated as a result of your ad spend.
- Return on Investment (ROI): The ratio of profit or loss on your investment. Measurable ROI is critical to digital marketing so it’s important to track this KPI and optimize it over time.
Audiences will be exposed to ads depending on factors such as audience targeting and conversion rate. This means marketers can select the type of user they want to see their ads using filters such as demographic and geographical location. Audience segmentation is a smart way to hone in on your target audience and drive conversions.
Cost models for performance marketing
Cost models for performance marketing include Cost per Mille (CPM), Cost per Click (CPC), and Cost per Action (CPA). The best cost model for you will depend on your most important KPIs.
What is lifetime value (LTV)?
When learning how performance marketing platforms work, you also need to know how to measure LTV. This is another critical measurement for performance marketing. LTV is the overall value the average user has throughout the period of your relationship. This is an essential metric that helps you identify the most valuable users and which channels are delivering long-term high-value users.
For example, your data may reveal that although an affiliate partner produced a moderate number of new users, a high percentage of those users have high retention and completed in-app purchases. This measures the true value of each marketing channel.
Performance marketing platforms: How Swaarm can help
We are the first martech tracking platform that has been designed and optimized together with clients’ input to make each action more efficient. This includes making actions faster and easier to execute – giving our clients better results. There are several ways we achieve these optimizations, such as:
- Automation: We manage more than 30 billion events per day and find ways to use automation to help you optimize operations. For example, we have created tools that automatically approve offers and switch off traffic sources that are underperforming.
- Instant reporting insights: Clients can query billions of real-time events within seconds by using drag and drop actions. We also offer more advanced data science tools that enable you to run SQL and Python notebooks across your real-time and historical data – all directly within our platform with no setup time or third-party fees.
- Optimized migration process: If you want to switch to Swaarm you don’t have to worry about a complicated migration process. To make the process as simple as possible, we have adapters that fill Swaarm with your information from other platforms. We also have a team of mobile experts that are devoted to a seamless transition to our platform without any loss of revenue. This enables you to focus on managing your partners while we take care of the migration.
- Fraud prevention: Our fraud prevention technology means you can spend less time manually monitoring your campaigns. We have an integrated click and postback shield that gives you full control over your traffic. This includes the ability to filter events in real-time. Our fraud prevention is fully automated to ensure brand safety for your partners and to optimize conversion rates.
- Platform stability: We keep your data safe with the highest level of platform stability. Marketing & HR Manager Vanessa Ferreira explains that “Data integrity is at the core of Swaarm’s business, which is why we store and replicate all events so they cannot be lost. We have an event sourcing architecture that allows us to process and replay events transactionally, ensuring that no information is lost due to hardware failures or human errors. This high level of security saves our clients money and resources.”
How do performance marketing platforms work? The process requires advertisers to pay for each time the desired action is completed by users. This desired action is a measurable result that can be tracked. Performance marketing KPIs include metrics such as leads, installs, churn retention rate, ROAS, and ROI.
Swaarm is a performance marketing platform that has been designed and optimized to make actions faster and easier to execute. Clients can leverage automation to stay ahead of the curve, while also gaining fraud prevention and the highest level of platform stability. The migration process has also been streamlined to make the process as simple as possible. If you would like to know more about how Swaarm can help you with performance marketing, get in touch with our team.