What Is Performance Marketing?

August 17, 2021
Posted in News
August 17, 2021 Camilla Hansen

The game of advertisement has transformed the entire aspect of sales and purchase. In today’s world, people are overwhelmed by digital features more than anything else that favors the marketing campaigns to come into the race.

We encounter several ads on different brands daily. Have you ever thought about why not all brands are popular? What is the discriminating factor between those earning valuable ROI and others not? 

It’s all about the strategy you opt for appropriately showcasing your services and products with the help of a progressive marketing plan. These marketing strategies help various companies to accomplish their goals and sustain their brand reputation. One of these aspects is performance based marketing that has set digital marketing on fire with its versatile attributes.

Here we will discuss detailed aspects of digital performance marketing and its drastic impacts on other marketing practices.

What Is Performance Marketing?

What Is Performance Marketing?

A marketing technique that involves payment only after attaining desired outcomes satisfies the performance marketing definition comprehensively. It supports your business through increased conversion rates.

Performance marketing involves both publisher and retailer in a strategic campaign that demands expense from the retailer after completing a specific course of action. In this way, a retailer can get a high conversion of the target audience without fear of loss.

Moreover, such brand performance marketing ensures extra brand exposure and chances of high click-through rates free of cost.

This facilitating marketing strategy aids many of the marketers to build their brand reputation extraordinarily well.

How Does Performance Marketing Work?

The whole cycle revolves around the following attributes, namely:

    • Brand, retailer, or advertiser
    • Publisher, Affiliate or partner influencer
    • Conversion goal 
    • Networks 
    • Outsource program managers (OPMs)
  • Brand Or Advertiser

A brand or advertiser is generally a retailer company that intends to generate sales by offering its products or services. The role of the brand is indispensable in leading this performance based marketing for making an online presence through different marketing channels. 

  • Affiliate Partner Or Influencer

Influencers are destined to make killer marketing techniques and strategies to facilitate brand awareness by promoting different products. The means of promotion are the social platforms through which they carry out all the activities. They also drive organic traffic using their social media accounts, blogs, and websites.

The influencers offer a discount code to their followers issued by a brand and get a percentage of sales in return whenever a purchase is made. Influencers are considered as an authority as people believe them more than a brand they advertise.

  • Networks And Third-Party Platforms

Networks and third-party platforms support the interaction of advertisers and influencers in brand performance marketing. Such entities keep track of leads, conversions, clicks, and KPIs. However, a brand doesn’t necessarily need to incorporate such platforms for brand advertisement but is used to step-up brand performance marketing. 

  • Outsource Program Managers:

These are the agencies designated to launch various marketing campaigns for those brands who don’t want to entertain in-house. Such firms present marketing campaigns, assist in affiliate partner recruitment, optimize landing pages and search engines, etc.

What Are The Measures Of Performance Marketing?

What is the legit way of analyzing the scope of any marketing strategy? A question that comes to mind when we discuss the progress of any brand. We can estimate the marketing performance through regular tracking of ROI.

However, the tracking records and obtained data give you insights into adequately optimizing your site for real-time engagement. In that way, you may gain more traffic and generate organic leads.

The most popular KPIs that can help you measure performance based advertising are as follows:

  • CPC (Cost Per Click): 

Cost per click is a cost generated whenever a viewer clicks on your ad. CPC determines the conversion rate. The higher the CPC, the more will be the conversions.

  • CPM (Cost Per 1000 Impressions Or Click):

Cost per mile measures the cost an advertiser pays for 1000 impressions on a digital ad. It mainly emphasizes the price of the displayed ads.

  • CPL (Cost Per Lead):

Cost per lead is the amount an advertiser pays when he receives a sign-up from the consumer on any advertised offer.

  • CPI (Cost Per Install):

It is one of the best metrics to calculate ROI on your marketing investments. Cost per install is a price paid on the advertisement to acquire a new customer.

  • CPA (Cost Per Action):

CPA is a pricing model that refers to the specified action of a prospect customer charged on an advertiser. It is one of the most popular metrics as it includes the action of potential customers that seems highly valuable.

  • CPS (Cost Per Sale):

Cost per sale is the cost an advertiser pays when the offered advertisement generates direct sales.

Performance Marketing Channels

Performance based marketing channels are the mediums through which you may exhibit the best status of your services and products, obtaining high conversions in return. These channels are accountable for determining the growth of your brand and gearing up the actions to acquire lead generation.

  • Native Advertising:

Native advertising is a type of organic advertising that promotes sponsored content on a web page or site. It matches the content form and function of any website where it appears and increases the click-through rate by driving the attention of site visitors.

Native advertising is 10 times more clickable than other online advertising as it offers quality content that converts leads and provides value to the consumers. The native marketing includes the following content in the form of advertisement:

  • Ads that we encounter as news feeds on social platforms like Facebook or Twitter etc.
  • Ad listings that ascend on google search results.
  • Recommended articles that appear below the papers we read.

Reasons behind the Aggressive Growth of Native Advertising:

    • Ensures increase in purchase intent up to 18% having higher visual engagement with native ads.
    • Native ads are the editorial content that never makes the audience bored, concealing brand exposure somewhere in it.
    • Native advertising is an official form of advertising that influences purchases up to a large extent.
  • Banners (Display Ads):

One of the digital performance marketing types includes display ads on a website. You may come across these types of ads daily on banners that appear on websites, Facebook pages, and other social forums as well. The most common and ancient form of digital advertising involves graphics, videos, and interactive content. Advertisers are still managing to generate sales with the help of display ads.

  • Social Media Advertising:

Social Media Advertising

Social media advertising has great significance as it is leading all other marketing aspects. This performance media marketing augments the conversion rate by driving immense traffic to your website and allowing viewers to expand reach through like, share, or comment.

Social media forms a community of over 3.5 billion users on Facebook, Twitter, Instagram, LinkedIn, etc., that may help you figure out your target audience for ultimate business growth. With the help of social media, you can seek various marketing opportunities and advertise your products in a meaningful and engaging manner to promote your business.

Why is social media advertising essential?

    • Increase your brand visibility through popular social channels
    • Offer the services and products with creativity that maximize the chances of generating leads
    • Help in building goodwill relationships with customers
    • Ensures excellent return on investment.
  • Search Engine Marketing:

Search Engine Marketing or SEM refers to the mode of advertisement accomplished through search engines. Generally, SEM encompasses using relevant keywords to rank on the top of search engines for increased brand visibility. SEM is divided into 2 main categories, namely:

Paid Search Marketing

Paid search engine marketing depends on paid campaigns like Google, Bing, and Yahoo for rankings. In this marketing tactic, advertisers pay per click on ads, mainly focusing on CPC.

Organic Search Marketing

Organic search marketing favors an unpaid search engine optimization method that assures the highest organic ranking through search engine algorithms.

  • Affiliate Marketing:

Affiliate Marketing

Affiliate marketing is the best instance to define performance marketing more accurately. It is a type of advertisement that supports the addition of the publisher as an affiliate to promote the services and leverage the sales pattern. However, it accompanies an agreement between both parties to benefit equally from the sales.

An advertiser owns an ecommerce store and sells his services with the help of a website operator to get the desired outcomes. It generates a highly profitable stream of income, minimizing the risks of loss. Moreover, affiliate marketing is giving rise to approximately 15% of the total revenue obtained from digital advertising and is considered the most efficient way of marketing.

  • Content Performance Marketing:

Content performance marketing combines content and performance marketing that refers to bespoke content production to drive the desired audience. The content is published and distributed after proper optimization and streamlining to deliver quantifiable business impact. Following are the crucial steps of content performance marketing: 

Identification Of Target Audience

This step includes a deep analysis of the target audience by advertisers to figure out where the audience should be more likely in search of their products. After encountering their needs, the time is to create tailored content following the parameters regarding their interest to drive their attention to the site.

Optimization And Distribution Of Content After Creation

It determines the techniques on how to make the content more valuable and optimized for successful conversions. Particularly incorporating the SEO components for high conversions.

Estimation Of Results

Advertisers use past content performance marketing campaigns to improve future content pieces in the light of previous learnings. They also measure results through KPIs to rectify in case an error occurs. The columns that need to be cross-checked are:

  • Bounce rate
  • Conversion rates
  • Organic traffic
  • Social shares and page views
  • Quality inbound links

Performance Marketing Strategy

All the performance marketing agencies or retailers carry out the whole cycle following the comprehensive marketing plan that includes:

  • Set A Marketing Goal

Setting the desired target before initiating any specific action can take you a long time to achieve it. The first step towards strategic marketing is the alignment of your campaign attributes.

Before setting up your campaign and creating ads, you should be extremely sure about the purpose of putting in the efforts. The digital marketing goals include brand awareness, engagement, website traffic, lead generation, and sales. These attributes can only be achieved when you have a campaign goal planned before the launch.

  • Launch Your Product Through Different Digital Channels

In performance marketing, a single medium is not enough to present your services diversely. You have to showcase your products through a variety of channels. It signifies the chances of brand exposure and ensures high reach and a higher conversion rate through this process.

  • Optimize Your Campaign And Measure The Results

Performance marketing campaigns just after the launch start to generate data. It is necessary to keep a hawk-eye on metrics to eliminate the flaws from an individual campaign to manage its performance across all channels for generating maximum traffic.

  • Geek Out All The Challenges

While getting extreme benefits from the performance marketing campaigns, retailers have to face some threats and potential challenges to sustain the brand reputation. Some of the challenges are as follows:

  • Brand safety
  • Compliance issues
  • Click frauds and publisher frauds
  • Privacy regulations
  • Placement transparency

However, uplifting resources can reduce such pitfalls to make advertising networks and platforms considerably strong to readily resolve issues like brand safety and privacy risk.

Benefits Of Performance Marketing

  • Easy Tracking And Optimization Of Post-Launch

Performance marketing campaigns track and measure the performance and identify the mistakes with the help of data analytic tools. Moreover, the tracking phenomenon accompanies the post of campaigns either.

  • High Traffic To Your Website

Launching products and services from various channels allows a high traffic rate as the campaigns are exposed to different platforms to target a specific group of visitors. Moreover, promoting varied content types to educate people about the services increases brand awareness and drives excellent ROI.

  • Low Chances Of Risk

Continuous tracking through KPIs lowers risk in terms of privacy, transparency, compliance, and brand safety. In that way, the monitoring of the campaign leads it towards successful results and boost sales and leads.

Wrap-Up:

Performance marketing has transformed the sense of advertisement, bringing more advancement and facilitating the retailers, influencers, and consumers at the same time. The reduction in expenses and increment in resources make it easy for the people who want to launch their business but lack resources.

Whether you are starting a small business or scaling an extensive one, the advertisement plans with progressive development have made this venture a piece of cake.

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Camilla Hansen

Originally from Denmark, but graduating with honors from the Vrije Universiteit, in the Netherlands. Camilla studied Literature and Journalism and is passionate about writing and researching all things content and online marketing. Entering the Performance Marketing realm as an Affiliate Manager in 2020, her career at VIP Response took off. She combines both aspects in drafting helpful content and insightful articles and tips to the affiliate and online marketing sphere.