Performance Marketing: Accounting for Advertising Costs

Performance Marketing: Accounting for Advertising Costs

Advertising campaign costs must be controlled. It is unprofitable to invest money constantly, without even understanding when and to what extent these investments will pay off. Therefore, marketing "for the result" is becoming more and more popular. Moreover, marketers have more technical capabilities: today it is easy to track which product the user was going to put in the basket or which advertisement in the search results caused a response.

But still, the traditional approach that has worked offline for years is still strong. He says that "you need to do it like everyone else" because "it works." But none of these marketers can tell you exactly how many customers a TV ad, a square banner, or a newspaper ad brings you. Therefore, the popularity of performance marketing is growing more and more. After all, in this case, the advertising rate is not chosen blindly. In addition, strict accounting of cash costs is maintained and “return” is controlled.

For example, you sell garden furniture or picnic utensils. You can develop standard promotions for shopping centers, or you can launch a creative advertising campaign, focusing on ... the weather forecast! After all, when it is sunny outside, more people go on a picnic or to the country, which means that the demand for the corresponding goods is higher. Therefore, if you activate your advertising campaign before the sunny weekend, you will get more profit.

Marketing for results - the formula for success


This fundamentally new approach has 2 main components - data collection and experimentation. Of course, any marketer collects data, but is it interpreted correctly? But it is the work with data that is important, and not their recording and accounting.

It is worth collecting data in three categories:

  1. Where did the client come from: search, social networks, ads, etc.
  2. Site behavior. The client can make a transaction or simply browse the catalog or open the page and immediately close it.
  3. How much did the client cost, what expenses were made for the advertising campaign that brought him.

Of course, all data must be systematized. Given their volume, it is not surprising that a special automated system is needed - such as Google Analytics. It has many advantages, but it may need additions in order to produce concise, visual reports, combining the information received.

When the data is available, presented in a convenient form for use, you can proceed to the experiments. They will need a lot. Lots of. And this is the main part of the success of performance marketing. All the work here is built on the principle of “guess-try-disappoint or celebrate success.” The timing of your ads, the number of words, fonts, pictures, advertising channels - you need to check everything. At this stage, there are both disappointments and discoveries.


But you need to test according to the rules, in a certain sequence. First, we select the most promising ideas, then we form hypotheses. You can assume that your target audience will like ads on a lilac background or a picture in the spirit of old pixel games. Then - the actual testing, evaluation of the result and conclusion.

Ineffective strategies should be immediately turned off. It is clear that there is no point in experimenting with a million tones, it is enough to “walk” through the base colors. The same applies to other changes. But once an effective strategy is found, it needs to be developed as much as possible. And remember about reliability indicators: it is always better to test several hypotheses than just one, but the “best one”.

And one more rule: experiment often. As often as you can afford. Once you find the very best concept that works effectively for you, you will get a “return” on every dollar invested in advertising. Performance marketing with the right approach will save up to 50% of the advertising budget.

Of course, numerous tests may seem too costly for small companies, but no one forbids using the general principles of this area in order to learn how to save money and invest only in effective advertising.

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