Performance Marketing: Optimizing ad spend to achieve campaign goals

A digital marketing strategy that is driven by results is termed performance marketing. It is ideal for businesses looking to reach audiences at scale since results are based on how end-users interact with campaigns and content.

Moreover, performance marketing works when advertisers pay either publishers or agencies to design and place advertisements for the organization on several performance marketing channels — search engines, social media, embedded web content, CTV, videos, and more. Rather than paying for an ad in a conventional way, advertisers pay based on how well the ad performs by measuring the number of impressions, clicks, shares, or sales.

An important factor of performance marketing is determining how to optimize ad spend to achieve campaign goals. Let’s take a deep dive into some tried-and-tested tips I have discovered to do this the right way.

  • Determine your KPIs (key performance indicators) and ROAS (return on ad spend) goal

A KPI is an effective metric used to measure performance. There’re 3 main groups of KPIs.

Social engagement – Defines how content performs on social media.

On-site metrics – Defines how content influences website visitor’s behavior, for instance, bounce rate and time spent on site.

Conversion metrics – Defines how content turns potential leads and campaigns to sales.

First, determine what you need to measure and ask yourself these questions.

  1. What timespan will you measure the metrics across?
  2. What’s a realistic growth rate?
  3. How will you achieve the desired results?


After setting your KPIs goals, set a realistic goal for the average ROAS you would like to achieve. It’s essential to determine ROAS goals to evaluate the ad campaign’s performance quantitatively. Then, a mix of insights, a dash of data crunching, and research will put you on the right track.

  • Set a realistic budget

Setting a realistic budget, whether it’s based on the percentage of revenue or fixed income, makes it simpler to allocate resources effectively and measure the campaign’s results. Ask yourself these questions:

  1. What percent of the budget can be spent on marketing?
  2. What’s your CLV or LTV (customer lifetime value)?
  3. What’s your funnel/conversion process?
  4. What’s the conversion rate?


To set a realistic budget, you should know what a lead or a visitor is worth and what the customer lifetime value for the business is.

  • Target your campaign to the optimal audiences

Successful advertising is the ability to reach an audience who’ll be most interested in the offered service or product. If you need to get the right eyes on your ad campaign, you must target the optimal audiences. To do this, gather information about who your potential audience is.  What are their demographics? Consider things like hobbies/interests, age, gender, location, salary, discretionary income, and education. The more information you have about the ideal audience, the better you can target them. Knowing your audience also enables finding look-alikes of your highest performing audience segments.

  • Monitor campaign progress for effectiveness, paying close attention to burn rate of budget, CTR (click-through rate), conversions, and revenue

Monitoring campaign progress for effectiveness allows determining if the campaign is working correctly and how the marketing tactics are performing. Therefore, use elements that can be assessed and quantified easily, such as clicks, actual sales, and profit. 

Furthermore, the burn rate describes how fast a campaign is spending its allocated budget. Keep a watchful eye on the levels of spend to ensure there’s a direct correlation in conversions. Burning through your campaign budget too swiftly without results leads to an underperforming scenario in which you may not be able to recoup. Besides that, it’s also vital to monitor impressions, CTR, conversions, and revenue to determine how many users are visiting the website and performing the desired actions such as filling out a contact form, making a purchase, downloading a spec sheet, etc.

  • Gather learnings and optimize elements such as creative, copy, CTA (call-to-action)

The content builds excitement and interest, and the promo, CTA, and creative encourage the visitor to dig deeper and become a paying customer. An appealing ad with a persuasive call to action is the fastest way to generate leads and double the conversion rates. However, since every business is different, continually analyzing and testing helps determine what works best for your potential customers, resulting in a campaign that converts to leads and purchases.

Wrapping Up

Performance marketing is an effective and creative way to diversify your audience and expand reach, all while obtaining valuable data and insights. Find out the approaches that optimize your ad spend and work best for your brand and customers. It doesn’t matter where you stand in the performance marketing space; there is always room to grow!


Rolanda Gregory ©2022
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