performance based marketing 101 - clickz live jakarta 2015

Performance Based Marketing 101

by Bachtiar Rifai

Bachtiar Rifai

Now > Head of Marketing at blanja.com (JV eBay.com & Telkom Indonesia)

2012 – 2014 > Head of Digital Marketing at Lazada Group

2008 – 2012 > Founder of WireHub Indonesia

Bachtiar Rifai Click Z Live – Jakarta |Performance-Based Marketing 101

about me

http://id.linkedin.com/in/bachtiarrifai

1. What?

2. Cost & Benefit

3. Getting started

Goal & Objective

Target Audiences

Metric

Measurement, Analytics & Attribution Model

Channel & Cost component

Performance Review

Scale

4. Case study: Affiliate Marketing


table of content


Performance based marketing is type of marketing activities that focus on result.

Many advertisers have limited budgets and may not understand the most effective method of advertising. With performance-based advertising plans, they avoid the risk of paying large amounts for advertisements that are ineffective. They pay only for results.


what is performance based marketing?


7 step to start performance based marketing

Goal

Target

Metric

Analytics

Channels

Reviews

Scale

Define specific & high impact business objective

Define your main target audience/customers

Knowing what important and what to measure

Setting up performance tracker & attribution model

Knowing the right channel that most profitable for you

After campaign performance review

Scale and grow your strategy

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Goal Define specific & high impact business objective 1

In order to get maximum impact for your performance based marketing strategy, you need to know your business goal & objective. This goal need to be SPECIFIC & HIGH IMPACT.

Simple example: you are an Fashion Ecommerce. What you should do to increase your overall net profit using performance based marketing?

1. You need to identify which category on your site is having biggest margin2. Calculate category that currently having highest profit contribution3. Calculate your average-selling-price (ASP) per category4. Based on market trends, which category have better trend in term of demand

From that picture, you can see which category need to be pushed based on all condition above




Goal Define specific & high impact business objective 1

Category % Margin % Profit Share ASP Trends

Watches 10% 10% Rp. 500,000 +20%

Shoes 15% 10% Rp. 250,000 +30%

Blazers 7% 20% Rp. 750,000 -12%

Hijab 35% 50% Rp. 150,000 +55%

Jeans 12% 10% Rp. 170,000 -18%

Example format:




Target Define your main target audience/customers2

After knowing the specific and high impact goal. Now you need to know your target audiences/customers. There are several way to get the data (depend on your business model) but generally you can get the data from:

Internal customers database data (purchase history, age, gender, location etc) Customers survey External survey or statistics Channel data (Google trends, Google keywords planner, Analytics data)

Dividing audience is very important to the campaign performance because each audience have unique behavior. Some example of audience targeting:

New or returning customers Mobile or PC users ASP range Customer lifetime value Etc.




Metrics Knowing what important and what to measure3




Metrics Knowing what important and what to measure3


Important Metric by Business Model:

Impression brand awareness Visitors brand awareness, engagement, read, views Transaction orders, subscribe, click ads, upload videos, join a quiz, etc. Active users become a valid members, paying customers, validated database etc. Loyal Customers do multiple transaction within period of time

Metric Formula:

CTR = total clicks/total impression CR = total transaction/total clicks NCR = total unique users from transaction/total transaction CLV = sum of “money” or worth from user in certain period of time



Analytics Setting up performance tracker & attribution model 4


What is website tracking and how it work?

Web tracking make use of cookies “small file with information that stored in your browser” to collect information/data about you and your browsing behavior, history and action on the web pages. This information then collected by tracking server to be analyzed. The most popular tracking is UTM tracking by Google (originally come from Urchin Tracking Module)

Simple schematic figure how web tracking work




“Half the money I spend on advertising is wasted. The problem is that I don’t know which half it is.” Lord Lever

“(Web marketing) is accountable and measurable—the perfect direct-response medium. If 50 percent of advertising isn’t working, with the Web you know which 50 percent.”

Michael Kubin


To get conversion data from Analytics we need to choose and setup Analytics based on our goal & metric. The ability to accurately track our metric is paramount. Some of the leading Analytics platform:

Google Analytics Adobe Analytics WebTrekk





An attribution model is the rule, or set of rules, that determines how credit for sales and conversions is assigned to touch points in conversion paths. For example, the Last Interaction model in Google Analytics assigns 100% credit to the final touch points (i.e., clicks) that immediately precede sales or conversions. In contrast, the First Interaction model assigns 100% credit to touch points that initiate conversion paths. – Google

Clicks chain example:

Last clicks: count only for last click before conversion First clicks: count only first click (first interaction) Post clicks: count all channel before conversion Decay: Gradually assign greater value for channel path over time (exponential) Position based: users pick for position and assign weight to it Linear: flat or same value for all channel path



Channel Knowing the right channel that most profitable for you5


Some Performance based digital marketing channel:

1. Affiliate Marketing Lead2. PPC Marketing Clicks3. Real-Time-Bidding (RTB)4. Remarketing5. Email Direct Marketing (EDM)6. Organic





Search Engine Marketing (SEM)

Contextual ads based on search queries on search engine with Pay Per Click scheme

SEMSEO





Real-time-Bidding (RTB)

images: go2mobi.com



Review & Scale Performance review, scale & grow6


In order to build sustainable performance based marketing constant performance review is required. Performance review should cover:

1. All important business metric2. Cost3. ROI4. Scalability

A/B testing and multivariate testing also needed in order to know which campaign, adgroup, ads, channel, audiences, landing page, products & creative performing better than others.

Constantly doing A/B testing and multivariate testing will help you to achieve your goal efficiently, especially when you prepare to scale your performance based marketing with larger marketing budget.


Case study

Affiliate Marketing


Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate's own marketing efforts.

There is several option to run affiliate marketing. Such as in-house, using affiliate network or outsourced.

In-house: Amazon, eBay, Lazada GroupAffiliate Network: Commission Junction, ClickBank, ShareaSale, Neverblue etc.

In-house Network

- Own publishers - Publishers owned by network

- Self payment - Pay to network

- Self publishers recruitment - Ready to use pool of affiliate


Case study

Affiliate Marketing



Case study

Affiliate Marketing


Affiliate marketing is form of performance based marketing in which we pay only for result. Most common scheme used in affiliate marketing is

Cost-per-Lead (CPL) or Cost-per-Action (CPAc) Action/lead to do something Cost-per-Order (CPO) Pay per valid order Cost-per-Acquisition (CPA) Pay per new customer

Depending on the business model & type. For e-commerce typically use CPO or CPA scheme. For brands usually using CPL. The lead is depend on the business and goal. If the company need more subscribers then CPL defined for cost per subscribers.


Thank you…

Bachtiar Rifai

m : +62-812-1004-0847

e : [email protected]

ln : id.linkedin.com/in/bachtiarrifai

performance based marketing 101 - clickz live jakarta 2015

Documents

head of marketing

marketing activities

head of digital marketing

high impact goal

business goal objective

business model

maximum impact

target audiencescustomers