Your Guide to Performance Marketing in B2B: Techniques and Metrics

C-suite demand for proving marketing spend has increased, and both marketing and finance leaders are feeling the pressure. Nearly one in two CMOs and CFOs say the CMO is expected to demonstrate marketing’s impact on the bottom line more than in previous years, according to data from the 2023 B2B Marketing Benchmark report.

To meet this demand, CMOs are increasingly turning to performance marketing. While this instinct is the right one, CMOs must be careful to conduct performance marketing in a way that enables their long-term effectiveness. 

Here’s what you need to know about performance marketing to prove the worth of your B2B marketing initiatives without impeding future success.

What Is Performance Marketing?

Performance marketing is a form of digital marketing where brands buying ad space pay providers for that ad space based on their ad’s performance in a pre-defined metric, rather than paying a flat rate as they would in traditional advertising. 

For example, a brand and ad space provider agree on the campaign goal metric of earned clicks. In this scenario, whenever users click on the ad, the brand pays the provider an agreed upon rate. This is also called pay-per-click advertising.

Data analytics tools power performance marketing by tracking and measuring the ongoing performance of digital ad campaigns in real-time. For example, LinkedIn advertisers can use built-in reporting and analytics tools to near-instantly measure the impact of their ads.

Today, the way B2B marketers think about performance marketing is evolving as they increasingly view brand building as a critical aspect of (measurable) marketing performance.

B2B Performance Marketing: Techniques and Metrics

How do I define and achieve my performance marketing campaign goals?

The first step to creating any B2B performance marketing campaign is deciding what you want your campaign to accomplish. Setting these goals will also help you determine which metrics to track. 

For example, LinkedIn Campaign Manager divides marketing goals into three broad categories: awareness, consideration, and conversion. Though performance marketing campaigns are most frequently associated with conversion campaigns, because they provide more straightforward bottom-line evidence of impact, performance marketing can and should be used to accomplish all three of these goals.

Awareness: This is the high-funnel goal. You want your marketing campaign to make as many potential customers aware of your brand as possible, either for the first time or as a reminder. 

• Technique: With awareness campaigns, focus on brevity, clarity and brand differentiation. Find a fast, eye-catching and memorable way to set your brand apart in its category and in the minds of your audience.
• Performance metric: Cost Per Impression (CPM) 
  

Consideration: Middle-funnel. By now, you want your audience to be aware of what your brand has to offer and actively considering whether to purchase from you or not. These are the ads where you make the case for why they should go with you.

• Technique: Transition from generalized brand awareness to specific explanations of differentiators. Focus on a problem your particular audience has, then explain how your service or product can solve that problem better than other brands because of your differentiating factor. 
• Performance metric: Cost Per Click (CPC) or Click Through Rate (CTR)
  

Conversion: Bottom-of-funnel. Conversion campaigns are focused on generating, capturing, and converting high-quality leads, either by having the audience fill out a form directly on the ad itself or by navigating to your website. Here, you want to seal the deal.

• Technique: Consideration performance marketing campaigns often focus on answering the question “why now?” Provide a reason why the audience member should stop merely considering the purchase and act sooner by providing a special limited-time offer, a particularly compelling argument, or a guarantee of quality.
• Performance metric: Cost Per Conversion or Cost Per Lead (CPL)

How can I use performance marketing to demonstrate my marketing’s bottom line impact?

The main advantage of performance marketing is that its metrics are clear, objective and available in near real-time. Here are a few broad examples of what each common metric in performance marketing can tell you and how you can use them to make the case for your campaigns:

• Click Through Rate (CTR): Your CTR is how frequently the audience who saw your ad clicked on it, or “clicked through” to it. Calculate it by dividing total clicks by total impressions, then multiply by 100 to find your CTR percentage. The higher your CTR, the more engaging your ad is to your audience.
  
• Cost Per Mille (Thousand) (CPM): Also known as cost per impression. The lower your CPM, the more relevant your ad is to your target audience. You can use this to prove that you’re reaching the right people and making the most of your budget. Calculate it by dividing the total ad spend by 1000 impressions.
  
• Cost Per Click (CPC): The lower your cost per click, the more often your ad is convincing your audience to click on it - and the more efficient your campaign. Use this to show you’re targeting the right people with the right compelling messaging to get them interested in your brand or product. Calculate it by dividing the total spent on your ads by the number of clicks.
  
• Cost Per Conversion: Your cost per conversion refers to the average cost of the campaign per successful conversion. A conversion is when an audience member has the desired reaction to seeing your ad. To calculate cost per conversion, divide your total ad spend by the number of conversions the ad generated.
  
• Cost Per Lead (CPL): Whenever you pay CPL, it means a user volunteered information to your brand out of interest in your product or service. The lower your CPL, the more effective your advertisement is at bringing in new leads. Use this to show that your marketing is having a real impact on the lead pipeline. Calculate it by dividing the total spend by the number of leads generated.

How can I use performance marketing data to improve my marketing’s performance over time?

Performance marketing gives you the ability to monitor results in real-time and update any aspect of your strategy to finetune performance as the campaign runs.

A/B test different aspects of your campaigns to develop a better understanding of which elements are most effective for your desired goal. For example, here are a few ways you could experiment with different campaigns in real-time to (hopefully) optimize their performance:

Awareness: To lower your CPM, work to make your ads as relevant to your targeted audience as possible. The more relevant the ad, the less you’ll pay when “bidding” on ad space. 

To locate your ideal audience, try cloning your awareness performance marketing campaigns and then altering ONE aspect of your audience targeting. Monitoring the performance of both campaigns simultaneously will show you which audiences find your ads most relevant. 

Consideration: To optimize CPC campaigns, focus on experimenting with messaging first. See which arguments for your product or brand’s differentiation resonate most with your audience. You could also try swapping out key images or videos to test the clickability of your key creative.

Conversion: Optimizing conversion campaigns means decreasing cost per conversion. You do this by increasing the percentage of audience members who actually either fill out the form or take a desired action on your website after seeing your ad.

Since you’re asking the user to do more than just watch your ad or click on it, conversion ads need to be as compelling as possible. Generally, this means the best optimization approach is to gain an extremely detailed understanding of your target audience, allowing you to customize your ads to their unique pain points and interests. 

Since a conversion may take place on your website, rather than the ad itself, you should also optimize the landing page your ad leads to in order to speak to quality leads as directly as possible.

The kinds of insights you derive from optimizing your campaigns while they run won’t just help you improve your current campaigns, either. By experimenting with A/B testing and progressive optimization, you can gain a deeper and deeper understanding of your brand’s strengths and weaknesses.

What are the limitations of performance marketing?

As Tequia Burt, LinkedIn Collective and Ads Blog Editor-in-Chief recently pointed out, demand generation marketing results are easier to measure than long-term, brand awareness metrics. Consequently, performance marketers have started overemphasizing this short-term demand generation marketing at the expense of longer-term brand awareness. 

However, because 95% of B2B category buyers are not in-market at any given time, brand marketing is proven to be far more effective at generating demand in the long term than short-term demand generation marketing. This means that many marketers are sacrificing their organization’s long-term success for short-term wins that might wow the C-suite.

To circumvent this problem, today’s performance marketing experts need to find a way to make brand marketing just as measurable by performance marketing standards as demand generation marketing. 

That’s what performance branding sets out to do.

What is performance branding?

Performance branding is a means of making the results of brand awareness campaigns just as measurable as demand generation using metrics that can be measured with performance marketing tools. 

This is accomplished by measuring a brand awareness campaign’s impact on new performance marketing memory metrics proven to increase a brand’s share of mental availability. 

With the help of the new metrics provided by performance branding, marketers can prove that the brand awareness results of their high-funnel performance marketing campaigns are ultimately just as — if not more — impactful to the bottom line as their performance marketing demand generation campaigns. This will help marketers use performance marketing techniques to make a data-backed case allocating some of their budget to brand awareness campaigns now and in the future.

What are memory metrics in performance branding and how do I measure them?

There are five key marketing inputs proven to increase a brand’s mental availability, and each can be reliably measured:

• Quality creative: Define a set quality standard and then measure content against whether it meets that standard, gather user ratings of your content, or keep track of how the content performs in terms of engagement metrics.
• Quality reach: Measure a key metric of brand awareness such as positive brand mentions before and after the campaign runs.
• Quality attention: Track metrics like in-view time, exposure time, hover rate, touch rate or clickthrough rate.
• Quality awareness: Track branded search volume, social sentiment, backlink activity, social share of voice, earned media coverage and direct traffic to the brand site before and after the campaign.
• Quality lift: Add up total sales for the period and subtract your baseline sales for the same period, then divide the result by your benchmark to determine the lift percentage of an ad.

Performance marketing is an ever-evolving art, but by adopting these techniques and tracking these metrics, you’ll be well on your way to mastering it — and taking your B2B marketing to new heights.

For more expert advice and data-backed best practices on B2B performance marketing, subscribe to the LinkedIn Ads blog.