blog posts

Marketing practitioners believe that they have always wasted part of their budget on investing in advertising. Since business owners are not aware of the function and result of their advertising, they always feel that their budget for advertising is wasted. Of course, they can easily solve this problem by using performance marketing. What we are going to do in the rest of this article is to look at the concept of functional marketing and how it works. So, if you have a problem with your marketing management, be sure to read this article to the end.

What is functional marketing?

Functional marketing is a comprehensive term in the field of digital marketing and marketing programs in which advertisers pay for specific actions such as increasing lead customers, sales, number of clicks, etc. Functional marketing professionals relate to the following advertising agencies, media, publishers, or marketing channels:

• Indigenous advertising
• Sponsorship ads
• Affiliate Marketing
• Advertising on social networks
• Search Engine Marketing (SEO)

How a functional marketing platform works

Each of the advertising networks has its audience and provides different platforms for business owners to interact with them, and we will introduce some examples of them to you in the following.

• Facebook is a social network that offers many options for business owners to display ads to users on the Facebook and Instagram platforms.
• Yektant, Sabavision, Adro and advertising platforms
• Google also displays ads for various businesses on search results pages and across the Google Ads network.

In general, it can be that the mentioned channels select ads based on the following factors:

Target audience and their category

Each of the advertising platforms provides you with facilities with the help of which you can easily segment your audience.

Auction (Bid):

Modern advertising platforms allow you to pay for your ads at a specific place and time by agreement.

Quality and relevance:

The issue of trust in advertising is the most important issue for people, which is why advertising platforms prioritize the performance and quality of advertising. If the quality of the ad is not good, the platform will not be in a good position for it and as a result, its efficiency will drop drastically.

Exchange rate :

Costs associated with performance marketing are determined by the actions taken by the customer. Advertising platforms only charge you based on customer actions. For example, your banner ad may appear 1 million times on different websites but only received 200 clicks. In this case, the advertising platform will only charge you 200 clicks!‘

You can also set your bid for these actions on these platforms and fully customize your ad displays to get the highest conversion rate.

Functional marketing strategy

As mentioned earlier, you pay for performance marketing for what you do. Performance marketing platforms charge based on factors such as pay per visit (CPM), pay per click (CPC), etc. that have already been agreed upon with the advertiser.

Cost per visit (CPM):

The amount that each advertiser pays a publisher for every thousand views of their ads.

Cost per click (CPC):

The amount the advertiser pays the publisher for clicking on their ad.

Cost per sales lead (CPS):

The amount that the advertiser pays for the direct sale of the products.

Cost per lead (CPL):

The cost that the advertiser pays for the direct registration of a lead through an advertisement.

Cost per activity (CPA):

The amount that an advertiser pays for a specific activity such as selling, completing a form, or clicking on an ad.

Keep in mind that each of these activities is an advertising goal and a measure of performance marketing performance. Therefore, to evaluate or modify any of your strategies, you should consider the goals of the advertising campaign, the type of platform, the cost, and the related results.

The best functional marketing channels

Given the functionality of performance marketing, the best channels available to do so are options that allow you to measure your audience’s metrics and actions. In the following, we will introduce some of the best channels for implementing performance marketing strategies.

1- Native ads:

Most internet users are indifferent to online ads and usually block their display on web pages. Of course, matched ads are on websites where your target audience uses its content. So the click-through rate is 10 times higher than other types of online advertising. The main features of matched ads are:

• Provide quality and valuable content to users
• Clever distribution by appropriate publishers

In general, launching native campaigns involves the following steps:

Goal setting: Set a specific goal for yourself and set basic criteria for evaluating it.

Appropriate content: Focus on the type of content that persuades your audience to take action.

Preparation: This step involves selecting the content, refining the audience, and budgeting parameters.

Optimization: Boost campaign performance by analyzing information, reviewing advertisers, and adjusting budgets.

Review: Evaluate the overall performance of the campaign according to your main goal. You can boost your advertising campaign by modifying minor variables such as release time, site, or digital device type.

2- Sponsorship ads:

Sponsorship or ad reporting is another type of matched advertising that is in performance marketing. Content sponsorship increases traffic and customer conversion rates and generally exposes your ads to a wide range of target audiences.

Sponsorship content is economically profitable for both parties (advertiser and publisher) if properly prepared. Indigenous advertising expert Chad Polite describes sponsorship content as follows:

• Content sponsorship means that the publisher acts as a news medium.
• The long-term nature of editing sponsorship content sets it apart from other short-term sponsorship campaigns on social media.
• Communicating with the publisher and being exposed to the target audience increases brand awareness, website traffic, conversion rates, and customers’ chances of buying.

3- Advertising on social networks:

Obviously, with the advent of social media, users’ real access to the advertising content on these networks, as well as access to results that can be measured by business owners, has become much more difficult. Therefore, advertising agencies and experts in the field of advertising are investing in social networks to add this type of advertising to functional marketing programs.

Social networks provide you with very accurate metrics to measure different KPIs such as clickthrough rate (CTR), cost-per-click (CPC), and return on investment (ROI). This, like other performance marketing practices, begins with defining a goal.

In general, categories such as increasing traffic, audience engagement, lead generation, and sales can be considered as advertising goals on social networks. The next step for advertising on social networks is to choose the right platform and consider the following points:

• What is the level of acceptance that you have gained by working on that social network?
• How do users interact with your ads on that social network?
• What format can be for advertising on that network?

Many channels can be used to publish functional marketing ads. For example, networks such as Pinterest, Facebook, Instagram, LinkedIn, YouTube, and Twitter are among the social networks where advertising campaigns can be held.

4- Performance marketing in search engines

Search engine marketing (SEM) technically involves free and paid advertising done to make a business more visible online. Of course, in this article, the monetary type is one of the functional marketing channels.

SEM marketing is one of the best advertising channels in performance marketing thanks to Google Ads. Google Ads service revenue in 2017 is estimated at the US $ 95 billion, indicating its popularity among businesses around the world. Proponents of this type of marketing believe that this service shows your ads to users who are ready to buy.

SEM marketing is based on smart keyword selection, and this service helps you identify keywords related to your brand. Keywords such as buy, discount, discount code, or free shipping are also more competitive and therefore more expensive.

Of course, keep in mind that the advertising system in SEM marketing is based on auctions; In other words, every time a person searches for a keyword in the search engines, an auction process takes place and the advertiser has to announce his / her desired cost for one-click to enter this auction, which of course this will do. It has already been done in the Google Ads Dashboard.

5- Affiliate marketing or sales collaboration:

Affiliate marketing or affiliate marketing is another popular channel for performing performance marketing. In this type of marketing, a publisher engages with an advertiser in selling or increasing traffic. So, the sales partner sends more traffic to the advertiser and receives a commission for things like the sale of the product that they have already agreed on. In other words, sales associates, just like any other branch, introduce and sell your products and services to others through their website or web pages.

Almost anyone who has a popular website or webpage can act as a sales associate. On the other hand, most brands that are online can also be advertisers, but generally, e-commerce companies that sell their products on the web participate in these campaigns.