Performance Marketing Fundamentals
Welcome to the second module of our Performance Marketing Fundamentals course! In this module, we’ll familiarize you with the lingo commonly used in digital marketing. We’ll cover terms like Performance Marketing, Advertiser, Publisher, Ad Network, Agency, Tech platforms, KPIs, different buying models, and various types of advertisers you may come across in the digital marketing industry.
What is Performance Marketing?
Performance Marketing is a sub-strategy within digital marketing. It’s called “Performance” Marketing because we can directly relate the marketing efforts to the results achieved. These results could vary from views, impressions, clicks, leads, installs, etc. For example, if a company has an app and wants to increase its installs, a Performance Marketing initiative or professional can help run digital marketing campaigns to directly measure and create these results.
Digital Marketing Lingo
Let’s delve into some common terms used in the digital marketing industry:
- Advertiser: The entity that wants to advertise their product or service.
- Publisher: The platform where the advertisement is displayed.
- Ad Network: A company that connects advertisers to publishers.
- Agency: A company that manages advertising campaigns for advertisers.
- Tech Platforms: Platforms that provide technology for managing and optimizing advertising campaigns.
- KPIs (Key Performance Indicators): Metrics used to measure the success of an advertising campaign.
- Buying Models: The methods or strategies used to purchase advertising space.
Structure of Marketing Teams
Marketing teams in big companies are usually divided into offline and online (or digital) teams. The online team is further split into brand and performance teams. The brand team focuses on communications, PR, and company-wide messaging. The performance team focuses on achieving specific results like app installs or website traffic.
Understanding the Digital Marketing Ecosystem
In the digital marketing ecosystem, there are several key players and concepts that you need to understand. Let’s delve into them:
Advertiser
An advertiser is an entity that wants to advertise their product or service. They are the ones who pay for the advertising space to promote their offerings.
Publisher
A publisher is a platform where advertisements are displayed. This could be a website, a blog, or even an app like Candy Crush. Publishers create content that attracts users, and they monetize this content by displaying ads.
Ad Network
An ad network is a company that connects advertisers to publishers. They manage the distribution of ads across various publishers.
Agency
An agency is a company that manages advertising campaigns for advertisers. They handle the strategy, execution, and optimization of these campaigns.
Tech Platforms
Tech platforms provide technology for managing and optimizing advertising campaigns. They offer tools for tracking performance, automating tasks, and analyzing data.
KPIs (Key Performance Indicators)
KPIs are metrics used to measure the success of an advertising campaign. These could include views, impressions, clicks, leads, installs, etc.
Buying Models
Buying models refer to the methods or strategies used to purchase advertising space. This could be on a cost-per-click (CPC), cost-per-impression (CPM), or cost-per-action (CPA) basis.
Different Types of Advertisers
There are various types of advertisers in the digital marketing industry. Some advertisers aim to increase brand awareness, while others focus on driving website traffic or generating sales.
Understanding Advertisers and Buying Models
In the digital marketing ecosystem, there are several types of advertisers and buying models. Let’s delve into them:
Types of Advertisers
- Business to Business (B2B): These are companies that sell their products or services to other companies. For example, a company that sells accounting software to other businesses is a B2B advertiser.
- Business to Customer (B2C): These are companies that sell their products or services directly to consumers. For example, Nestle sells its food products to consumers through retailers.
- Direct to Customer (D2C): These are companies that sell their products directly to consumers without going through a retailer. For example, Lenskart sells its eyeglasses directly on its website.
Buying Models
- Cost Per Day (CPD): In this model, advertisers pay a fixed amount for each day their ad is displayed on a publisher’s site.
- Revenue Share: This model has recently become popular among e-commerce websites. In this model, advertisers share a percentage of the revenue generated from the ads with the publishers.
Understanding User Journey and Key Metrics in Digital Marketing
In digital marketing, understanding the user journey and key metrics is crucial. Let’s delve into these concepts:
User Journey
The user journey refers to the path a user takes from seeing an ad to taking the desired action. For example, a user might see an ad for a jacket on a website like BBC, click on the ad, get redirected to the advertiser’s website (like North Face), and then decide to purchase the jacket.
Key Metrics
Here are some key metrics used in digital marketing:
- Impressions: An impression is counted each time your ad is loaded on a webpage. Even if the ad is outside of the viewport (the visible area of the webpage), it still counts as an impression.
- Viewport: The viewport is the visible area of a webpage. As you scroll up or down, different parts of the webpage enter and exit the viewport.
- Viewable Impressions: Viewable impressions are counted when at least 50% of your ad appears in the viewport for at least one second. This gives you an idea of how many times your ad was actually seen by users.
- Reach: Reach refers to the number of unique users who saw your ad. For example, if one person sees your ad three times, that counts as three impressions but only one reach. Reach gives you an idea of how exposed your campaign was.
- Frequency: Frequency is the average number of times each person saw your ad. It’s calculated by dividing the total impressions by the reach. For example, if your campaign had 10 million impressions and a reach of 1 million, the frequency would be 10.
Understanding Video Metrics in Digital Marketing
In digital marketing, video ads have their own set of metrics. Let’s delve into these:
Views
A view is counted when a user watches a video ad for a certain amount of time. The criteria for what counts as a view can vary between platforms. For example, on YouTube, a view is counted when a user watches a video ad for 30 seconds or to completion if the video is less than 30 seconds. If a user clicks on the ad before the end of the video or 30 seconds, it’s also counted as a view. On Facebook, a view is counted when a user watches a video ad for at least three seconds.
View Through Rate (VTR)
VTR, or View Through Rate, is the percentage of users who watched the video and fulfilled the conditions of a view. It gives advertisers an idea of how engaging their video ad is.
Understanding Bounce Rate and Conversions in Digital Marketing
In digital marketing, understanding metrics like bounce rate and conversions is crucial. Let’s delve into these concepts:
Bounce Rate
Bounce rate refers to the percentage of users who land on your website and leave without interacting with the page. For example, if 1,000 people click on an ad and land on the advertiser’s website, and 500 of those people leave without clicking on anything else, the bounce rate would be 50%. A high bounce rate could indicate that the landing page isn’t relevant to the users or doesn’t meet their expectations.
Conversions
A conversion occurs when a user completes a desired action on the advertiser’s website. This could be making a purchase, filling out a form, signing up for a newsletter, etc. The definition of a conversion can vary depending on the advertiser’s objectives. For example, for a real estate client, a conversion might be defined as a user filling out a lead form.
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