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A Simple Guide to Avoiding Pitfalls of Performance Marketing

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01 “Low ROI” Problem in Performance Marketing

The growth of the global economy is expected to slow down by the last two quarters of this year because of the gradually easing internet development and the post-pandemic atmosphere. Under this circumstance, the competition in the advertisement industry has become fiercer than ever.

According to Chinese Digital Marketing Trend Research in 2022, the expense spent on the advertisement will keep growing. In 2021, the growth rate was 17% and it is expected that it will continue the growth up to 19% this year. (Chinese Digital Marketing Research, 2022)

For advertisers, it is inevitable to increase marketing budgets because of the fierce competition, however, the efforts and pay might not be proportional to the return as expected. Therefore, advertisers and marketers must implement performance-driven marketing strategies in the digital marketing and advertisement industry.

However, executing a well-performed performance marketing campaign is easier said than done. How to improve the ROI of your performance marketing campaigns? What are the key indicators to evaluate the performance of these campaigns? And most importantly, how to take control of the fragmented marketing journey and optimize every touchpoint of prospecting customers?

Bar chart showing challenges of performance marketing


According to the research on marketing trend, the difficulties to increase the ROI of Marketing communication is the biggest challenge for brands and advertisers


Fig 2

With the yearly continuous growth in marketing expenses, the concerns on inefficient low ROI campaigns have relatively emerged.


But one thing we shall not deny is that there are still numerous successful cases of performance marketing with a high ROL performance, so in a nutshell, what exactly could advertisers learn from these successful examples? How should advertisers prevent themselves from making mistakes on the aspects of the closed loop marketing and data utilization?


02 Solving Strategy-Execution Gap Issue and Building a Sustainable Closed Loop Marketing Ecosystem


Many advertisers and marketers are only focusing on driving “performance” when executing their performance marketing campaigns without considering the importance of creating closed loop marketing procedure for this objective. If one performance marketing campaign increases brand awareness but does not bring corresponding sales or sustainably continuous purchases, advertisers or marketers may need to rethink whether their marketing progress fail in any specific steps.


Besides, many advertisers and marketers are too eager to execute performance marketing without thoroughly considering whether the entire marketing loop is “tailor-made” for successful performance marketing. Here are some common pitfalls of performance marketing:


  • Directly promote an E-commerce website without considering the possible facts that using in-app ads or Ecommerce marketplace ads might be more appealing to customers.
  • Directly promote a lead form but neglecting the importance of product or service training and education before collecting users’ personal data.
  • Directly promote a game download link and assuredly believe that the potential gamers are willing to download the game when they see the advertisement.
  • Other negligence: slow speed of loading the landing page, lack of sufficient payment methods; lack of online customer service; the selling points of SKUs are not outstanding enough etc.


For the advertisers and marketers who are accustomed to brand marketing, the above problems are easier to arise when they operate performance marketing. Directly using the advertisement materials and landing page of brand marketing is not effective anymore. One thing advertisers and marketers need to know is that brand marketing and performance marketing have their own goals – brand marketing focuses more on the creation of touchpoints and building of brand image, etc., while performance marketing emphasizes more on “performance and sustainable sales” in the marketing loop. Therefore, advertisers and marketers should thoroughly plan and allocate their marketing assets.


Many successful cases of online performance marketing are executed through targeting the consumers’ “impulse purchase”, it could be a landing page, a lucky draw page, an interactive page, a page with discount promotion activity, or a page with products’ outstanding selling points, etc.


Apparently, not all performance marketing campaigns should follow the same guidelines and structures in order to improve their own advertisement materials and landing pages, brand marketing is still inevitable in order to drive actual performance. Although the conversion rate may be low, it indeed brings us direct conversions, and even brings us indirect conversions in the long run. Brand marketing can work as the “prelude” of performance marketing to devote to bringing more conversions.


In addition, executing performance marketing should be associated with practical strategies of closed-loop marketing, conversion funnel, brand marketing, influencer marketing (KOL), etc. to consider the synergy of benefits.


In terms of how to operate “brand marketing & performance marketing” and we will discuss this in our following articles.


03 Without Full Data Utilization Would Simply Be a Regression of Performance Marketing


In the era of traditional advertisement and marketing, it is rare to learn the concept of performance marketing. It is because advertisers and marketers could not track the “performance” that is accurate enough to track individual’s activities or their preferences. Therefore, brand marketing is the main choice for advertisers and marketers.


Currently, compared to the traditional advertisement or marketing campaigns, digital marketing campaign could accurately track every impression, click, and conversion. This can help advertisers and marketers analyze the conversion data and the targeted data to carry out the next step of optimization and adjustment.


Taking one of our long-term serving clients who is a well-known cross-border e-commerce based in Europe as an example, by installing the Smart Pixel Code (Advertisement Tracking Code) of EternityX platform to the client’s website, activities of potential customers such as  “Add to Shopping Cart”, “Add to my wishlist”, “Purchase” will be tracked as “Conversion” and those data would be converted and recorded in EternityX’s platform and other media database, hence, EternityX could cross-analyse the data log and the converted customers, further optimize the oCPM through precise  algorithm. On the other hand, the report dashboard of EternityX also provides insights for manually adjusting clients’ marketing deployment.

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Furthermore, the algorithm can combine with DPA (Dynamic Product Advertisement) which is popular in the e-commerce industry to make use of the insight of conversion data to help the advertisement accurately retarget every customer. For instance, David was a visitor to an e-commerce website by clicking on ads for apparel category. But what he finally bought might be jewelry products instead. Hence, through data and algorithm analysis, the brand could advertise jewelry related ads to him more accurately next time.


By using this method, EternityX delivered over 118% quality traffic to this brands’ platform, approach 75% of the targeted audience and increase sales by 5.98 times because of the EMT’s advertising service and orders from Chinese market generated from our DPA campaign has increased 20% accordingly.

EternityX campaign's achievements
Fig 6

Besides from the bespoke ad retargeting and the index of oCPM and precise retargeting, data utilization could be applicable in so many different aspects of marketing. EternityX is also developing “Predictive Marketing” based on the data-driven RTB advertisement resources – to cite an instance, by accumulating the first party data from advertisers and EternityX’s DMP accumulation, EternityX can do the real-time analysis of RTB traffic connected on EternityX Trading Desk, thus, to predictively provide the users different advertisement materials and landing pages in different formats and with higher chances to drive conversion. Meanwhile, it can also help advertisers and marketers to achieve cross-platforms and cross-device marketing.


Many advertisers and marketers are committed to start performance marketing, however, without the professional knowledge or without the restrictions of internal policies,  platform restrictions  and technological capabilities, it is just a pure luck for marketers to perform a successful marketing campaign without  them to identify the leads that are attracted from marketing campaigns and they would not be able to perform an accurate performance-driven campaign most of them cannot effectively track and transfer the conversion actions happening in the marketing ends. Eventually, the efficiency of their performance marketing will become pure li/whether their performance marketing ­­is successful or not is depended on their luck.


04: The Arising Dilemmas of Data Utilization Under the Tightening Regulation on Personal Data Protection Law


The gradual transformation to performance marketing will always be a long-term goal for advertisers and marketers. Its related advertising technology will also progressively evolve as well based on the needs of advertisers and marketers. For example, to protect the data and personal information, methods like joint training may replace the current one – accurate return and optimization methods.


For industries with sensitive data such as finance and medical companies, marketers might be fearful when it comes to collecting users’ personal data or even transferring them to external parties for analysis. In the last article of “How China’s Personal Information Protection Law (“PIPL”) May Refashion the Digital Advertising Industry”, we discussed about the establishment of PIPL and how uncertain it becomes when it comes to the tightening control on data utilization.


What does it imply? It simply indicates that direct identification and attribution of the prospects will be replaced in the field performance marketing, and it is happening very soon.


As the paradigm of distributed machine learning, joint training will be beneficial in solving the data security issues. Because it allows the participants involved to jointly model and analyze the value of data without sharing the original data. For instance, there are still some cases in which the advertisers and marketers corporate with some bid media to seek interception of both parties’ data (one party provides the data about the audiences’ action, while one party provides the related audience’s label.). By protecting each other’s form of original data and also effectively seeking interception of two parties’ data to get the attribution results that are “partially unclear, but overall convincing”, advertisers can acquire more insights about the converted audiences, and the media side can also receive the performance feedback of different audience labels. This will allow the optimization algorithm to continue working and help advertisers and marketers to increase their ROI.

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05 Epilogue


Successful performance marketing is becoming hard to achieve in this era, on the bright side, we are also in the era of restructuring our brand values. What about we firstly “cool down” our passions for performance marketing, and focus on the fact that both brand building and effective use of data are also equally important? Desire for a high ROI is an addiction that may potentially drive advertisers and marketers to only focus on short-term benefits. However, it is more important to keep the brand maintaining long-term influence and awareness. Making effective use and return of data can let the advertising and marketing technology and algorithm be fully applied. Combined with the two methods, brands could truly find the answer to maximize the value of data only if they could think out of the box and stop fixating on ROI.


[MAMS] 2022 Chinese Digital Marketing Trend Report:

QuestMobile 2021 Chinese Internet Advertising Market Insights Report

Media Contacts:

Kelly Chan

+852 3711 3025