If your B2B performance marketing engine feels unpredictable, stretched too thin, and like a big ball of chaos, you’re not alone. Performance marketing is stalling out everywhere. It's failing to gain momentum as campaign costs increase and more brands enter the fray.
What the hell is going on? Why, all of sudden, are B2B brands struggling to drive tangible results? Are we finally seeing the effects of broken marketing frameworks that have been used for years—as passing fads, rather than sustainable strategies?
Yes, performance marketing has potential to drive compounding growth. But most marketers are done paying for tactics that can’t generate long-term results. And honestly…most don’t have extra resources and cash to throw around these days.
Want a breakdown of what performance marketing is and how it should be working in your favor? Let’s talk about an entirely new way to approach B2B marketing this year.
What is Performance Marketing?
What if you did not have to spend money on marketing that is not working and every dollar you spent on marketing got you results? Dream scenario, right?
B2B performance marketing makes this all possible. But what is performance marketing?
Performance marketing is one of 5 Distribution Methods. Performance marketing refers to reinvesting money back into ad performance as ads generate a specific action such as a click, lead, or sale, and is driven by ad performance.
Performance marketing differs from any other type of marketing in that you don’t pay upfront and hope for results. Instead, you spend money based on how ads actually perform.
So the question is—what would you do if you had back all of the money you’ve wasted on ads that fall flat?
H2> How it Works
When you think of how performance marketing works, consider the typical ad cycle:
- Marketers and advertisers spend money on ads →
- The ads generate an action such as a sale →
- Those sales generate revenue →
- Marketers and advertisers to reinvest back into ads →
- The reinvesting process offers sustainable and compounding gains →
But, just because performance marketing by definition yields results, there’s no guarantee that it’s going to yield results for your business at all or every time.
H3> The 4 Variables of Performance Marketing
Performance marketing typically works well in the B2B space (performance marketing B2B) when the following four variables hold true:
- Demand. There’s in-market demand for the product or service that is being sold. Performance marketing can plateau fast if product/market expansion does not exist, making moving prospects closer to buying, harder. When you do have product demand, KPIs need to be looked at that can assist with achieving your desired goals.
- Pain awareness. Buyers are aware of their pain from not having the solution. The messaging you create can drive this awareness.
- Value proposition awareness. Buyers understand the solution’s broad value proposition. You can also drive this awareness.
- Messaging. Strategic messaging problems are the reason that so many B2B brands are stuck with their wheels turning, yet going nowhere. B2B marketing teams need to hold onto messaging that works (and has been verified through in-depth experiments).
Why is Performance Marketing Important?
With so many other types of marketing (social media marketing, content marketing, search engine optimization), why should B2B marketers care about performance marketing?
Because for years, marketing “experts” have sold the idea that more ads, more creative, more landing pages all equal better results. Unfortunately, brands have fallen for that ineffective playbook hook, line, and sinker.
Quick fixes aren’t working anymore. Brands need a single marketing program that creates demand for the long haul. Modern performance marketing should center around your unique brand narrative to create Sustainable Demand.
1. Scalability
Performance marketing is scalable as a result of more capital. You can reach a wider audience simply by increasing your budget and spending more, plus expanding keywords, targeting, and adding more channels.
This makes performance marketing super powerful, but as you scale, there’s risk with moving up the funnel and CAC increasing.
2. Low-risk
Since this type of marketing can focus on in-market buyers the risk becomes lower when spending money. You only pay when your ad is live and the actions you’ve selected such as a click or conversion, have been achieved.
3. Targeting the right people
You choose the exact audiences you want to reach to and can get granular, ensuring your ads and campaigns are reaching the right people. Narrow your reach down to the exact job titles, ages, locations, gender, interests, and other variables. Effective targeting enables you to become laser-focused on your ICP, a win-win for long-term brand awareness.
4. Measurability
You can directly measure the output of performance marketing in Google Analytics and on the advertising platforms you use (AdWords, Linkedin Advertising, etc.). At any given time, you’ll know exactly how many clicks, website visits, impressions, and so on that your campaigns are getting.
Getting Started with Performance Marketing
Before you jump into performance marketing, there’s some foundational homework that needs to be done. Follow these steps.
Step 1: Hypothesis build Distribution method understanding
Many companies haven’t made a decision on how they’re going to grow. You guessed it— this becomes a marketing challenge because marketing continually tries to do more to outgrow the competition instead of better more impactful marketing. Cue the growth hypothesis.
Before running any campaigns, you need to position yourself in a lane with laser precision. Developing a proven growth hypothesis helps your team learn where marketing efforts are most impactful. You’ll focus less on the outcome of marketing and more on getting as many buyers to experience and understand the core value of the product or solution you’re selling.
Buyer experience + core values + company DNA = growth hypothesis
When building your hypothesis, consider:
- Are you a sales-led organization and your job is to generate leads via performance marketing?
- How do buyers want to experience our core values pre-purchase? Ie. listening to trusted advisors or doing a Google search to find products.
- What is my company’s DNA? Ie. sales-heavy or product heavy organization. It is difficult to go against a company’s DNA. If you have a sales-heavy organization, transitioning over to any other kind of marketing program is going to be difficult.
- Does your company believe in content and education and you want to leverage education via performance marketing to build awareness on the category and pains?
Remember: If the COMPANY strategy doesn’t align to performance marketing, then it almost never works. Your foundation here matters.
Step 2: Distribution method understanding
First, you need to understand that performance marketing is a distribution method. It’s one of 5 primary ways a company can drive growth with the others being content, sales, partnerships, and word of mouth.
Performance marketing leverages paid ads to get your message to your market in a targeted way.
Step 3: Choose your performance channels.
What are the most common types of performance marketing? The following channels.
1. Social media advertising
Facebook Advertising, LinkedIn Advertising, and advertising on other social media channels can all be effective social media performance marketing channels. Since Facebook and LinkedIn Advertising are typically the most effective social media advertising channels for B2B companies, many businesses start here.
Don’t forget that the content itself should be native to the platform. This means ensuring that buyers are truly consuming the content in their feeds.
How does social media fit in with your compelling brand narrative? Determining the answer to this question is vital, because demand starts to taper off extremely fast. You can use the steps below to keep your growth engine churning.
2. Search engine marketing
Search engine marketing leverages search channels such as Google and Bing when buyers are searching for solutions. These channels work best to capture high intent. As an example you can target buyers that are actively looking for solutions, software, and pain.
As you capture intent you can work on moving up the funnel to more awareness driven terms around your category such as “How To” but this will increase the customer acquisition costs of these channels.
3. Partner/affiliate marketing
As it relates to performance marketing, partner/affiliate marketing is done through affiliate networks and third party platforms. The best way to get started with this is to contact affiliate marketing networks such as Partnerize, Impact, or AWIN, just to name a few.
4. Native advertising
Native advertising gets set up through social media or AdWords. They are ads that are placed on other publisher websites. To set these up, select Linkedin Audience Network under Linkedin Ads Placement. On Google Ads Manager, select Delivery Native.
5. Programmatic media buying
Programmatic media is sold across ad exchanges and is an automated way of buying advertising space. Google AdX is one of the largest programmatic media buying platforms and it’s where we suggest getting started. It can be accessed within your Google Ads account but you’ll need to be running Google AdSense.
The channels you use need to depend on two factors: where your audience is and channel resonance. Assuming your audience is on all of these channels, there are going to be some channels where they respond better to your messages than others—those are the channels you’ll invest the most budget in. In order to determine which channels are best, first identify which channels your audience is using and then run small tests across each.
Step 5: Validate your campaigns.
In this step, you’re running campaigns, starting with one or two channels using a smaller budget. We typically suggest running each campaign for about three weeks as three weeks is an adequate amount of time to collect enough data to validate campaigns to see if your hypothesis is correct.
5. Scale your approach.
After validating which channels work, it’s time to scale your marketing across the channels that work best. Increase your budget. Run more tests with different messaging. Continue to evaluate performance and validate channels.
Performance Marketing for B2B
Performance marketing for B2B is different from B2C because it targets businesses instead of consumers. B2B targets heavily depend on job titles and companies instead of interests like B2C targeting heavily uses. B2B companies typically need to be sold to with logic and value that shows how solutions benefit their organization, while B2C targets can be sold to using copy that strikes up emotions for personal interests and gain.
Performance marketing for B2B also typically has a much longer buying cycle than B2C. With B2C, consumers don’t need to contact a series of people to make their buying decisions—they can make them on their own. With B2B, there’s typically a chain of staff who have to evaluate said solution before permission to purchase can be granted. Let’s recap.
Performance Marketing for B2B vs. B2C
| B2B | B2C |
| Targets: Job Titles and Companies | Consumer Interests |
| Multiple decision makers needed to approve purchase | One person approves the purchase. |
| Longer sales cycle - one month or longer | Short sales cycle - instant to less than one month |
| Sell heavily with logic and value | Sell with emotions for personal interests and gain |
B2B vs. B2C Advertising Example
| B2B | B2C |
 Value is clearly shown stating how the solution can make users’ life easier: automate and personalize to save time and get insights. |  Who does not want to feel better? This ad can easily evoke consumers to make an impulse decision, especially with the FREESHIP promo code. |
How Do You Measure Performance Marketing?
If you don’t measure performance marketing, you’ll never know the impact it’s making and where improvements need to be made. Here’s what to measure and how to do so.
Cost Per Click (CPC)
A lower cost per click means you can spend more money to gain more website traffic, but we’ve found that these metrics don’t align with real growth and revenue results. As we improve Google Ads for SaaS companies in most scenarios, reductions in cost per click are associated with broader keywords and broader targeting within social channels. In harsher words, the clicks you’re getting are essentially useless, but, higher-ups like to see them at times, so you could include them in your reports.
How to measure: Online advertising platforms will automatically provide this number.
Cost Per Thousand (CPM)
CPM works by expressing the price of 1,000 advertisement impressions on a single web page. This variable helps you understand your advertising costs per number of impressions.
How to measure: Use a calculator like the one ClickZ offers.
Conversion Rate
Conversion rate indicates your ability to acquire new contacts in the database and is often measured through each lifecycle stage, but it often becomes a metric that marketing teams tend to obsess over. When you try to optimize for conversion rates by stage, the easiest lever is to reduce lead volume by improving lead quality, but this becomes an issue for some marketing teams that are measured on total leads generated per month.
How to measure: Take the number of people who interact with a particular piece of content, like an email or a page on your website, and divide the number of conversions by that total. The total you divide by depends on the type of content you want to find the conversion rate for.
Cost Per Conversion (CPC)
As its name suggests, cost per conversion is the amount of money it costs you to convert a prospect into taking an action such as a website click, demo sign up, or becoming a customer. LinkedIn ads offer Cost Per Result but you want to take this one step further.
How to measure: Using a CPC calculator is the easiest way.
Marketing Payback Period
Most B2B SaaS companies spend heavily on paid acquisition, but rarely focus on how long it takes back to get their ad spend back.
We actually break this down three ways to help us understand campaign efficiency: blended payback period, as well as branded vs. non-branded. We lean heavily onto branded and blended as growth indicators. When you focus too much on measuring one channel specifically, you can make the wrong decision.
How to measure: Add the total of all customer acquisition costs in any given period. Divide that number by the revenue contributed by new customers for the period of time that directly follows. It’s easiest to measure on a quarterly basis.
Lifetime Value (LTV) / Customer Acquisition Cost (CAC)
This is a great metric to help prove the profitability of your campaigns, but it needs to be analyzed carefully in a full-funnel approach, especially where your customers have large expansion opportunities that are not always factored into a LTV:CAC calculation.
How to measure: Break these results down by branded vs. non-branded and blended. Then, multiply the value of the customer to the business by their average lifespan, or a select amount of years such as five.
Conversion Rate
Conversion rate indicates your ability to acquire new contacts in the database and is often measured through each lifecycle stage, but it often becomes a metric that marketing teams tend to obsess over. When you try to optimize for conversion rates by stage, the easiest lever is to reduce lead volume by improving lead quality, but this becomes an issue for some marketing teams that are measured on total leads generated per month.
How to measure: Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period.
Pipeline/Revenue
This one is simple. Pipeline and revenue metrics are the amount of sales that are in your pipeline.
How to measure: Calculate the amount of sales in your pipeline/revenue generated.
Further Reading: 16 Most Important KPIs to Measure in Your B2B SaaS Marketing Campaigns
Performance Marketing at Elevate Demand
We know…there’s a lot of information to process here.
Here’s the #TLDR: performance marketing is something you should absolutely use for your B2B company, if it aligns to the companies Growth Hypothesis. It’s time to stop wasting money on needless performance spending when there’s a more promising path.
Don’t get tricked by agencies that won’t solve your foundational messaging problems first, Scalable, sustainable performance strategies are the only way to feel confident.
We specialize in Sustainable Demand Creation. It’s a different way to build brand messaging that truly hooks and captivates your ideal buyer.
>> Learn about our approach. <<
Frequently Asked Questions
Is SEO part of performance marketing?
Some sources say yes, we say no. This one can be tricky.
SEO can be a complimentary strategy, but it’s an entirely different distribution method, and these are two different ways to grow. Our recommendation is to start by focusing on one and then adding another as complimentary. Setting two in motion at one time can be a major challenge especially if separate tactics don’t align with the growth hypothesis.
Don’t forget—marketing chaos happens when you’re doing too much and lacking focus.
SEO and performance marketing require two different mechanisms to grow. Performance requires ad spend, and SEO requires content. Both are different forms of capital.
What is the difference between performance marketing and digital marketing?
We’re here to help you not get lost in the lingo. Yes, performance marketing is a type of digital marketing, but it’s also a specific niche for growth. To make it work for your brand, you need marketers who are in the weeds every day, learning about trends and messaging that hit the mark.
In a general sense, digital marketing uses online channels to engage audiences and create product/solution interest. And even though performance marketing is carried out across digital channels, you’ll miss out on the nuances if you simply think that “doing digital marketing” will solve intrinsic problems in your growth engine.
How do I implement a performance marketing plan?
The same principle you would use to implement any kind of marketing campaign plan applies to creating your performance marketing gameplan. At ElevateDemand, we think of it like this.
1. Align performance to the growth hypothesis
2. Build a data model to fully understand the new opportunity
3. Build a list of experiments to validate that specific opportunity
4. Run experiments in a core channel to learn and gather data
5. Compile learnings, build a new list of experiments
Here’s another way to think about the journey you’ll be taking your brand on.
- Validate: Can we generate revenue at a healthy payback period?
- Commit: Understand and influence core product roadmap AND messaging strategy
- Scale: Scale resources by adding more ad spend and channels
Looking for a general take on digital marketing strategy this year? Forbes offers a helpful guide on how to create a digital marketing strategy that generates results for your business.
- Explore the landscape and analyze your results.
- Map out your strategy.
- Define your target audience.
- Build your content strategy.
- Choose your channels and tactics.
- Set key performance indicators and benchmarks.
- Execute with best practices.
- Analyze and adjust.
Can I do performance marketing myself or should I hire an agency?
It might sound cliche, but just because you can do something, doesn’t mean you should.
If you didn’t have an internal problem in the first place, you might not be looking for outside help. But unfortunately, plenty of agency engagements fail because typical agencies are just telling brands to do more with less resources. That’s not the solution anyone needs or wants for sustainable growth.
If you’re not well-versed on all the performance marketing channels, then yes—let’s talk about making an investment that sets you up for the future (without wasting thousands on guesswork). Get unstuck with a growth agency that builds sustainable performance marketing with brand narratives that target your ideal customer best