Performance marketing has revolutionized companies’ marketing strategies and changed the way brands can now advertise and sell their products. It has helped companies and their customers determine how true a brand is to its word and if what it is selling is really worth it.
What Is Performance Marketing?
Performance marketing is what it sounds — marketing based on performance. It is like regular online marketing and advertising, but the advertiser only pays when a certain action occurs, such as a click, a sale, or even a lead to a potential sale. It is a combination of paid advertising and brand marketing but only paid out once the completed desired action takes place. Thanks to performance marketing, companies can now measure their brand reach and figure out which customer to target. With the advancements in technology, marketing your brand has become incredibly effective and efficient. Brands can now optimize their marketing campaigns in a better way and maximize the derived benefit.
One of the key benefits of performance marketing is that such marketing campaigns can be measured in more detail. Even though performance marketing involves some risks, they are shared between the brand itself and the marketing campaign publisher, respectively. For instance, in a scenario of cost per impression, the brand would take all the risk. In the case of cost per download, application, or lead, the risk is shared between both the publisher and the brand. Similarly, in the case of cost per acquisition, the publisher is the one highly at risk. However, this risk also works as an incentive so that the publisher does the job right and targets the right audience.
How Does Performance Marketing Work?
Performance marketing consists of four groups: Retailers, Affiliates, Affiliate Networks and Third-Party Tracking Platforms, and Affiliate Managers. All these groups are vitally important for performance marketing to take place, and they work in tandem to drive the desired result. Below is the breakdown of each group:
- Retailers or “Merchants”: Also known as Advertisers, these are the companies that want to sell the goods and services by Affiliate Partners. The affiliate programs that perform best in performance marketing are those who already have an established online brand or presence in the marketing channels, with an already engaged audience and a website that has a proven conversion rate.
- Affiliates or “Publishers”: These are the marketing partners that come in many forms such as artificial intelligence, influencers, product review websites, blogs, and more. These partnerships have a high value as they go beyond the sale with additional brand exposure and loyalty between the affiliate and the brand.
- Affiliate Networks and Third-Party Tracking Platforms: These platforms are where strategic partners issue bonuses, send out newsletters and track returns. Such platforms include Partnerize, AWIN, and PepperJam. Different affiliate platforms have advantages and disadvantages, and it will depend on you to pick the one that suits you best.
- Affiliate Managers or OPMs (Outsourced Program Management Companies): These are the main drivers between the merchant and affiliates. The affiliate managers can be either in-house or outsourced. It is vital to work with an experienced affiliate management company as they can scale the brand’s performance marketing program more efficiently and with a faster/higher ROI.
Challenges & Performance Marketing Solutions in the Healthcare Industry
While historical best practices such as word-of-mouth marketing, referrals, and phone book listings are still relevant in their broadest respects, these medical marketing strategies look quite different than what they did in the past as healthcare marketing has gone mainly online. In a changing healthcare environment, it is vital for businesses to stay afloat and understand how performance marketing can play an important role in helping healthcare professionals to create, communicate, and provide value to their target market. Challenges that the healthcare industry is experiencing now and solutions that performance marketing can bring are the following:
Challenge: Higher Costs
With increasing healthcare costs, the general public has started to look for other ways to access healthcare. People are now choosing less burdening ways that don’t cost them more than what they earn. The financial pressure has forced the patients to look for options outside their insurance network. This could hurt the healthcare industry, but this is also the opportunity that healthcare brands should grab to gain the patients’ attention.
Patients choose to check reviews of the doctors that they are going to visit. To make sure that your healthcare brand shows up first in people’s minds, you need to make sure that you have access to what a patient reads about your healthcare brand. Referral programs, impressive guest content, and local partnerships can increase your brand awareness.
Challenge: Insurance Business
Patients are looking for insurance-free ways, whereas hospitals are more focused on getting insurance to compensate them for their services. Insurance companies and doctors of such hospitals have a lot of control over what healthcare services are accessible to which patient, which is one of the reasons why people are tired of their insurance networks.
The explosion of healthcare data requires a new ecosystem built around the individual — one that will accelerate affordable and accessible healthcare. While keeping the importance of the doctor-patient relationship in mind, it is essential that marketers develop strategies that are beneficial to both the healthcare brand and the patient. Getting a little personal, such as sending customized messages or gift boxes, can help a patient connect with healthcare businesses on a more personal level. Standing at the center of the future ecosystem, the individual should become the focus for a hyper-personalized approach to health and wellness.
Challenge: Digital Hindrances
A number of innovative solutions are changing the way that patients interact with healthcare brands. Healthcare brands are usually assessed by patients based on their reviews that are available on the internet, and most of the patients fully rely on those reviews. A large number of patient populations choose their doctor based on the reviews they have gotten from past patients, which gives the patient room to be pickier and sets back the business of healthcare brands.
Brands of the healthcare industry need to be more aware of the technological advancements that can help them bring more business. Using the right channels to target more customers can really be a game-changer for healthcare brands, and using the right tools can help them project a positive image of themselves.
How Leading Healthcare Brands Adopt Performance Marketing
There are a number of healthcare brands that are already successfully using performance marketing. Here are a few of them:
New York-Presbyterian Hospital (Campaign: Patient Stories)
A seemingly common but incredibly effective marketing strategy is patient testimonials. These expressions of appreciation really change the way people think about you or your brand. The New York-Presbyterian Hospital remains ahead of the curve with this tactic by creating video content to promote their brand. The New York-Presbyterian Hospital has been distributing video content with testimonials from different patients. Using storytelling, these videos introduce a heart-warming touch and allow the viewers to understand how much care and attention they’ll get at the New York-Presbyterian Hospital.
Dana-Farber Brigham & Women’s Cancer Center (Campaign: You Have Us)
Through confidence-inspiring web videos, the Dana-Farber Cancer Institute shows its personal approach to cancer treatment and state-of-the-art facilities. One of the most comforting and supporting slogans used for this campaign was, “Right now you may have cancer. But what your cancer doesn’t know is that ‘You Have Us.’” By sharing these videos on social media and beyond, the cancer center epitomizes what it means to build trust with your target audience. These videos touched millions of hearts and helped the Dana-Farber Brigham & Women’s Cancer Center in spreading their message on a wide scale through social media, television, and radio.
UnitedHealthcare (Campaign: We Dare You)
“We Dare You” by UnitedHealthCare is an award-winning campaign that encourages its patients to take part in its “dares” and quizzes to win prizes on the website. This campaign engages its patients in making one small change every month and motivates them to share it on social media.
This interactive campaign proved to be a successful strategy that brought significant change and led to healthier habits in patients while also promoting a community of loyal patients.
Healthcare Marketing & Advertising Regulations
Keeping patients well-informed is a core principle of American healthcare policy, and advertising plays a vital role in sharing important information with the public. Promotional activities by healthcare stakeholders are subject to the general rules and regulations enforced by the Federal Trade Commission (FTC). The FTC is clear that before disseminating an advertisement, the advertiser must substantiate any and all claims that the ad conveys to consumers. The FTC has established a three-part standard for the determination of a deceptive advertising practice:
- There must be a representation, omission, or practice that is likely to mislead the consumer. Practices that have been found misleading or deceptive in some cases include misleading price claims, failure to perform promised services, failure to meet warranty obligations, and more.
- The practice is examined from the perspective of the consumer acting reasonably in the circumstances. If the representation or practice affects or is directed to a particular group, the FTC examines reasonableness from the perspective of that group.
- The representation, omission, or practice must be a “material” one. The basic question is whether the act or practice is likely to affect the consumer’s conduct or decision with respect to the product or service.
Pros And Cons Of Available Advertising Platforms
Facebook is the leading social media channel and has now become an essential part of the overall marketing plan. It offers a variety of options to show your ads to people visiting Facebook or Instagram. The biggest advantages of using Facebook marketing are microtargeting and the retargeting of the visitors that you targeted previously. There is a chance that your content could go viral when you’re advertising on Facebook. When people share your ad with their friends, this increases the likelihood of your ad going viral. Facebook advertising focuses heavily on the advertiser’s bid, ad quality and relevance, and estimated amount of actions.
Unfortunately, Facebook marketing is only good as long as you’re paying for it. With Facebook, it’s all about money and the race to increase your investment if you want your content to be seen and noticed. While mid-sized and larger businesses should have little to no issue paying for ads, small businesses may feel left out due to budget limitations.
Google Ads is an intent-driven channel and allows you to bid on keywords. When a customer Googles a particular product, Google provides them with the most relevant and authentic results possible. However, to get your website to the top of the results page, you have to advertise or/and be really good with SEO (Search Engine Optimization). Google Ads lets you measure every detail of your ad and be really detailed when measuring your advertising results.
When using Google ads, you pay for each click leading to your website. That means that whenever someone clicks on your ads, you will get charged regardless of whether the user converts or not. As a result, you might get clicks from users not interested in your product or service. Additionally, the healthcare industry is a competitive industry that generally has a higher cost per click. If your competitors are already using Google Ads, this might be the reason why you need to start your own campaign. The competition can be fierce and lead to higher campaign costs as a result.
With a large number of users, LinkedIn features all kinds of audiences, such as business owners, corporate sharks, influencers, etc. If targeted right, the LinkedIn audience can really make a significant change to your business because you can reach the right segment by mastering targeting, giving you the chance to target people with specific educational backgrounds, salaries, and attitudes.
On one hand, LinkedIn offers access to a high-value audience, but on the other, it comes at a high price. Compared to other social media platforms, LinkedIn is one of the most expensive social media advertising platforms. With the overall costs higher than usual, so is the minimum daily budget for your campaign. Ideally, LinkedIn is suggested to companies with high available capital.
YouTube advertising is cost-effective as you only pay when someone clicks on your ad. Apart from this, you can also choose exactly how much you are willing to pay when someone clicks. This means that you will never waste money on advertising space. Moreover, YouTube is highly targeted as it allows you to target an audience based on demographics, customer match, similar audiences, video remarketing, (custom) affinity audience, in-market audience, and life events.
YouTube offers sophisticated targeting and it’s a great place for viral content because users love sharing videos. However, the targeting is sometimes poor, and the follow-on content can be off-topic to what you are advertising for. Moreover, with the “skip” button that appears with your ad on the screen, it’s really challenging to figure out how to get your audience hooked to your ad within 5 seconds or less. If you can’t achieve that, ads that can’t be skipped are a great option as your audience will get to watch the entire ad while you can hope people don’t find your brand suddenly annoying.
Reasons Why You Should Choose Performance Marketing
Most advertising campaigns have a goal attached to them such as increasing website traffic, getting leads, or conversions. Performance marketing makes it easy for marketers to optimize campaigns to lead to the desired results. Unlike traditional marketing, advertisers only focus on specific actions that contribute to their end goals. Here are five key benefits of performance marketing over traditional marketing strategies.
- Better Planning: Performance marketing campaigns are easy to budget as marketers need to identify goals and an ideal cost per action at the beginning of the planning process. As an example, a $10,000 budget would be appropriate if a marketer expects to pay $0.50 per click and has a goal of 20,000 website visits.
- Pay ONLY for Results: The most obvious benefit of performance marketing is that you only pay for the results. It is important for marketers to identify their end goals and stick to them as campaigns may underperform if the goal is changed on the way.
- Track & Measure Performance: With metrics such as impressions, clicks, click-through rates, and conversions, marketers can track the performance of the ads, ad groups, and campaigns to determine the return on investment. If a campaign isn’t meeting expectations, marketers can make optimizations or pause the existing campaigns to create new ones, so that the budget can be reallocated somewhere else.
Every marketing strategy has its pros and cons, and performance marketing is no different. It offers multiple benefits to the brands that are willing to adopt it. Performance marketing has also made things worry-free for the advertisers and brands as they can measure every step of the advertising process. Marketing professionals can now precisely determine the right audience for a brand and send them a message at the right time through the right medium.