A large share of today’s corporate marketing budgets is allocated for online marketing. That’s because potential customers are not only spending more of their time online, but are also actively scouring the internet for information. Several technologies have been developed in response to this trend, designed to measure and improve the effectiveness of online campaigns. We sat down with Rebecca Fraederich, founder and CEO of the Hamburg-based online marketing company Peak Value, and asked her five questions about performance marketing.
‘Traditional marketing is geared towards a specific goal, such as increasing revenue or improving brand awareness. But it’s hard or even impossible to gauge whether you have actually attained this goal. For example, you will only ever get an estimate of the number of people that your campaign has reached, as it’s virtually impossible to establish exactly how many people have seen a certain advert, let alone how many of them then went on to purchase your product. In online marketing, you can track all these different statistics: number of page views, number of banner clicks, and the number of people who ordered a specific item. That’s why we refer to this type of marketing as “performance marketing”; it’s a set of techniques that enables you to achieve a pre-established performance level by collecting, analysing and interpreting online data.’
‘I mentioned the collection, analysis and interpretation of online data. The first step in this process, collecting the data, is essential. If you want to do that properly and comprehensively, you need to use the right tracking technology. We’ve seen that numerous companies in various sectors and industries haven’t invested in those technologies yet, as they don’t properly understand how they work. There are even some very large companies with multi-million-euro revenues that neglect to collect essential data, for example on how customers use their website. The challenge for our company is to get these types of clients to see things our way, as effective tracking is vital to performance marketing.
But there are many other areas in which businesses can improve. Companies that don’t have their own online stores, for example, miss out on the benefits of affiliate marketing, one of the classic performance marketing tools. In affiliate marketing, businesses reward affiliates for new visitors or customers brought by the affiliate’s own marketing efforts. I should also mention SEO: search engine optimisation. Many companies still underestimate the importance of having a high organic Google ranking. Companies don’t invest a lot in improving those rankings, when in fact this investment really pays off in the long run.’