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Relevance of Performance Marketing in E-Commerce

Written by J. Barenbrock

Grade 1.3

Paper category

Master Thesis

Subject

Business Administration>Marketing & Sales

Year

2020

Abstract

Master Thesis (Masterarbeit): Performance Marketing In the theoretical part of the first section, the related areas of performance marketing are carefully studied to provide a broad overview of the topic. The term performance marketing is defined and differentiated, customer journey model evaluation, network analysis theme analysis, the most key indicator definition and performance marketing channel presentation. 2.1 Definition and differentiated performance marketing is part of the digital media marketing mix, using intelligent network analysis and tracking technology to achieve measurable responses and/or transactions with users. Various performance marketing channels are used to control, manage and enhance organization-specific indicators and key performance indicators. The strategic goal is to acquire new customers, increase customer loyalty, and increase “return on investment” (Kamps and Schetter, 2018, pages 4-8). The application of data-related marketing models is not a new trend. In 1979, Little (1979, p. 11) began to discuss the use of "marketing decision support system", which is defined as "a coordinated collection of data, models, analysis tools, and computing capabilities. Organizations use these systems to collect information from the environment and It is transformed into the basis of action". In 2000, Google launched the first integrated digital advertising tool, which allowed advertisers to place ads in their search engines, monitor statistics in real time and optimize ads (Google, 2000). The first mention of the specific term "performance marketing" dates back to 2009. Thomas Eisinger, Lars Rabe, and Wolfgang Thomas (2009, p. 18) defined this term as "interactive direct marketing on the Internet." Direct selling is characterized by a method of communicating directly with pre-selected customers and providing a direct response method (Desarbo and Ramaswa mine, 1994, p. 8). Usually, customer-customized messages and coupons or promotions are used This has a positive impact on the organization’s revenue (Lund and Marinova, 2014, p. 104). Performance marketing is a similar approach that uses online marketing channels to provide instant, accurate and differentiated performance measurement and control. It is purely based on success Oriented, aiming to obtain effective sports elements and optimize or eliminate invalid elements (Eisinger et al., 2009, p. 22). In addition, there are various similarities with the concept of “data-driven marketing.” In data-driven marketing , Big data is combined into an overall data set to achieve consumer-centric advertising throughout the purchase channel (Busch, 2016, p. 57). Big data is defined as “in terms of quantity, speed, variety and accuracy Sexually large data sets” (Dam et al., 2019, p. 1). Compared with traditional marketing, data is accumulated as a by-product to some extent (Jeffery, 2010, pages 4-5). The characteristic of classic marketing activities is that they can reach a large number of recipients. The impact of advertising campaigns can only be measured imprecisely. In performance marketing, the more activities carried out, the greater the amount of data about the receiver's reception and response that can be stored and interpreted. This applies in particular to online companies, and therefore also to e-commerce companies, where most business processes are processed online (Holtforth, 2017, pp. 29-30). The tracking of performance marketing has been further developed in the past decade. It has changed from a purely technical measurement process to an interconnected tracking process. In the early days, the success of performance marketing campaigns was completely measured by cookies. The conversion is tracked by assigning the last advertising contact to the purchase, so the overall success of this operation is assigned to a channel. Today, a more comprehensive approach has been established, which considers all touch points related to sales success. Only by looking at the complete customer journey can an organization investigate which channels are effective and how effective budget allocation is needed (Bernecker, 2019, p. 4). Micheaux and Bosio (2018, page 3) claim that customer journey mapping is an important step in achieving performance marketing. The digital customer journey is made up of consumer experiences that become tangible through computer-tracked interactions, providing companies with a context for what is happening every moment. Tools such as personas and customer journeys and stakeholder maps can help marketers better understand customer behavior, feelings, and needs (Stickdorn, Lawrence, Hormess, and Schneider, 2018, pages 14-21). The process behind performance marketing follows the six steps that must be taken: define measurable goals, determine channels and budgets, export key performance indicators, track implementation and network analysis, permanent tracking and optimization, and continuous monitoring and tracking (Berneck, 2019 Years, p. 13). 11-12). Figure 1 below illustrates this process. First, the organization's goals and scope must be defined. Performance marketing actions can only be executed if the objectives are fully managed. In addition, performance marketing channels and corresponding budget allocations must be determined. Different channels have different advantages and disadvantages. Priority should be given to the performance channels that are most suitable for the current situation and established goals. Read Less