Performance marketing

What is Performance Marketing? Top Channels in China

David Henriques

Whether it’s WeChat advertising, Weibo marketing, or Baidu PPC campaigning, any business that creates an advertisement wants to know how it’s received by prospective customers. As advertising becomes more apparent, businesses are looking past branding to build marketing strategies with measureable results. Performance marketing campaigns give marketers the capacity to measure any and everything from brand exposure to conversion rates.

This modern day approach to data-driven marketing has given advertisers invaluable expertise into their performance, making it effortless for marketers to fine-tune their advertising for the best campaigns that are cost effective. The digital landscape in China has radically changed in recent years and businesses need to be in the loop of understanding how performance marketing can have a huge impact on their brand.

 

What is Performance Marketing?

 

Performance marketing is a term used for any marketing strategy in which marketers only pay when a specific action is completed – not before the ad campaign starts. In other words, performance marketing only comes into effect when a marketing campaign has a clearly understood and measurable result attached to it.

There are quite a few ways that performance marketing can be utilized and the tools and processes used to initiate this framework could be specific to an industry or individual agency. The publisher can run an ad on an app, service or other product that requires a certain number of clicks, or a specific percentage of a video being watched.

 

Why is Performance Marketing Gaining Traction?

Performance marketing

Advertising in China is steadily on the rise with 79% of advertisers planning to increase their digital marketing spending this year. Many marketers and publishers view performance marketing as a win-win way of doing business. By using this type of marketing, brands only target individuals who are more likely to buy their product or service. It allows for both parties to truly target advertisement campaigns in a precisely calculated way all based on performance and execution. Businesses can get a great sense of confidence that their money is getting spent effectively considering they are converting their target audience before any payment is made. Performance marketing also allows companies to get free brand exposure and targeted clicks with little effort.

 

Top Performance Marketing Channels 

1. Native Advertising

 

Native advertising

 

This is a form of paid media that creates click-through opportunities and tends to follow the natural form and function of the site it is placed on. The most common payment models for this are CPM and CPC. (See pricing models below)

 

2. Sponsored Advertising

 

wechat sponsored ad

 

Sponsored advertising involves a dedicated post promoting a brand and/or product.  Posts can drive traffic and conversions to increase the overall online visibility. Sometimes the compensation is in the form of free products, or uses CPM, CPA or CPC based payouts.

 

3. Affiliate Marketing

 

affiliate marketing

 

Affiliates are often considered as the marketing partners of performance marketing. Affiliates come in the form of product review sites, blogs, coupon sites, loyalty websites and more. Coupon and loyalty sites are a great way to drive sales with little effort.

 

4. Social Media Advertising

 

social media advertising

 

This type of performance marketing uses social media to gain traffic and exposure, usually centered around likes, engagement, sales and clicks. You can target consumers with precision and not have to worry about challenges that come with organic posting.

 

5. Search Engine Marketing

 

search engine marketing

 

Search engine marketing works in the form of paid and organic search options, but only utilizes paid when it comes to performance marketing. Pay-per-clicks programs offered by Baidu can accelerate your brand exposure in the form of keywords on the search engine results page.

 

Price Models of Performance Marketing

  1. Cost per Thousand (CPM)

    CPM is one of the most common performance marketing payment model where you pay per impression.

  2. Cost per Click (CPC)

    With CPC, you only pay for the click of an ad. This can be beneficial for marketing versus buying impressions that may not do so well.

  3. Cost per Lead (CPL)

    The customer has to go beyond just clicking an ad. They have to take further action such as signing up for an email list.

  4. Cost per Acquisition (CPA)

    You only start paying for an ad when the customer completes a purchase. This is the most expensive model, but comes when the consumer journey is finalized.

  5. Cost per Install (CPI)

    The price for a download or install of an app or program. 

Performance Marketing Vs Traditional & Programmatic Marketing

performance marketing vs traditional marketing vs programmatic marketing

While traditional marketing is still effective in the West, it is not the most suitable way to reach your audience in China. Traditional marketing is a linear marketing approach that helps reach your target audience with various offline advertising that can’t be updated once it’s launched. Brand image is extremely important in China and not have the ability to adjust campaigns and communication can lead to major marketing shortcomings.

Programmatic marketing is the use of software to buy digital advertising.  It allows you to narrow down your audience through various means such as age, gender, location and social standing. Many marketers appreciate programmatic marketing because of its relevant and targeted approach. On the other hand, performance-based marketing is all about enhancing the performance while producing quality outcomes, which can eliminate a lot of unnecessary spending in the process.

How can you use Performance Marketing in China?

performance marketing 2

Businesses can take advantage of performance based marketing to drive action rather than awareness and optimize advertisements for goals—whether it’s viewable impressions, clicks, leads, or whatever else. By taking this approach, you can track and measure your customer’s habits down to a science from signing up for a subscription to making a purchase.

You can run a paid search engine marketing campaign on Baidu, Tmall, Sogou or other social media platforms and pivot in real-time. Tracking performances range across all stages of the customer’s decision making, from search engine content to sales and retargeting. At any particular stage of the journey you notice a higher click through rate than others, you can use that knowledge on other channels for increased user optimization.

Performance marketing can also be great for targeting hard-to-reach consumers or build up followers on Weibo, Tencent QQ, TikTok or even partnering with KOLs for blogger outreach. These campaigns are easy to budget and are great for small to mid-sized companies because marketers have to identify goals and provide an ideal cost per action at the beginning of the planning stage.

 

Businesses looking to take their marketing to the next level in China should be interested in what performance marketing can offer for their brand awareness. Unlike traditional methods, performance marketing gives marketers the chance to plan efficiently, pay only for results, track performance and find new placement opportunities, turning marketing efforts into significant ROI. If you want more insights on how performance marketing can benefit your business, contact us today!

 

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David Henriques
David Henriques

Digital entrepreneur and co-founder of Sekkei Studio, a digital marketing agency in Shanghai, Paris and Hong Kong. More than 10 years of experience in helping the communication of foreign companies in China.

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