From billboards to radio, then to TV and telemarketing, and now digital media, marketing has certainly evolved at an unbelievable pace. Among all the innovations, marketing leaders are consistently hunting for cost-effective ways to acquire and retain customers. The constant strive to optimise marketing ROI has now raised the concept of performance marketing. As exciting and modern as it sounds, you will be surprised to know performance marketing could help you save a lot in your pockets. In this blog, we will explore the entire whereabouts of performance marketing and how it is disrupting the digital marketing space. Make sure you keep reading till the end for a comprehensive insight.

What is Performance Marketing?

Performance marketing is, in simple words, marketing based on performance. Performance is measured by your desired results — it can be a lead, a sale, or a download. In performance marketing, you basically need to pay per result. It’s gaining immense popularity lately because of obvious reasons. 

As a marketer, why wouldn’t you run a highly targeted marketing campaign that delivers the most optimistic ROI?

How Does Performance Marketing Work?

      • Performance marketing essentially functions by collaborating with third-party affiliates and advertisers (e.g., Google Ads). 
      • Performance marketing campaigns are run by paying advertisers only for desired actions. 
      • Another major advantage with performance marketing is that marketers are now more confident than ever as they know their budget is well spent.
      • It’s an ideal investment as business owners only need to pay for actions that lead to conversions.

All thanks to the innovative systems brought up by modern advertisers that are trackable, measurable, and transparent, performance marketing is the most efficient marketing practice. 

Business owners can now keep an eye on the entire buyer journey for their customers and leverage generated insights to refine their performance. Put simply, no other customer acquisition methodology or strategy is better than performance marketing at the moment!

How to create a Performance Marketing Campaign?

Creating a performance marketing campaign is very similar to other marketing campaigns. Let’s go through the steps you need to follow:

      • Finalize a specific goal and marketing platform: Research and decide who your audience is, what’s their behavior, and plan your budget accordingly. Analyzing and deciding on all these parameters will help you determine what marketing channel to choose for executing your campaign. 
      • Curate your marketing content: Once you decide on the platform, then you will need to create relevant content for your performance marketing campaigns. Your content can be of any type – like a blog, a graphic, a video, etc. 
      • Optimize your campaigns by constant monitoring: You must monitor and analyze your marketing campaign. Not only will that lead you towards valuable insights, but it will also make the campaign more effective.
      • Evaluate the results: When your campaign concludes, evaluate the performance through results and compare them with your earlier expectations. Try to discover more ways that could have made the campaign more successful.

Performance Marketing Pricing Models

Subject to the ad agency or marketing service provider you’re working with, your campaigns and pricing models will vary. Performance marketing is mainly about paying as per the action. Some commonly used strategies for these actions include:

      • Cost per Impression: This refers to the cost the marketers pay to the ad publishers per thousand times their ad is shown. 
      • Cost per Sale: Businesses need to pay the ad publishers per sale generated through the advertisement.  
      • Cost per Lead: Cost per lead is the charge taken by the ad publisher per sign-up the business receives through the advertisement. 
      • Cost per Acquisition: This is the cost the marketer pays the ad publisher when a specific action like a sale, a form submission, a click, etc. happens. 
      • Cost per Click: The most commonly used strategy is PPC (pay-per-click). It refers to the expense charged by the ad publisher when the audience clicks on the ad.  

What are the Top-Performing Marketing Channels?

We all know there exist numerous channels for advertisers when practicing performance marketing. Let’s discuss four of the most popular marketing pathways that can be used to reach your target audience.

      • Affiliate marketing: This refers to an arrangement when a business offers commission to affiliate partners against traffic and sales generated due to their exposure. More than 94% of publishers use multiple affiliate marketing networks, and 65% of affiliate marketers generate traffic by blogging.
      • Social media advertising: One of the most trending marketing tactics involves leveraging social media to boost-up installs and revenue. Interestingly, social media offers vast audiences that advertisers can target. Social platforms like Instagram, Twitter, and LinkedIn gained almost 1.3 million users every day in 2020. More importantly, 90% of people with access to the internet use social media.
      • Search engine advertising: Search engines like Google, Bing, and Baidu also offer paid advertising services. This implies that your products will appear at the top for search terms or keywords related to your services, enhancing exposure and increasing installs.
      • Influencer marketing: Influencer marketing has grown up exponentially in the last five years. It is basically the process of collaborating with popular/influential people in your niche and having them promote your products and services. Why is this gaining so much popularity? Influencer marketing is one of the fastest and most powerful ways to get brand exposure and create a compelling presence.

There exist several supporting reasons why you should opt for performance marketing campaigns. Let’s discuss them in brief:

      • Trackability – Performance marketing is comprehensively measurable, and most of the affiliate platforms or technology you utilize collects your campaign metrics. Further, those statistics help you determine when the traffic is converting or if your affiliates are leading low-quality traffic to your site.
      • Extended advertising reachPerformance marketing facilitates merchants to gain from extended marketing methods like:
          • Banner ads
          • Blogging
          • Email marketing
          • Product reviews
          • YouTube videos
          • Engaging with Facebook groups
          • Pay-per-click ads
      • Limited risk – Apart from optimal tracking of your marketing campaign, online performance marketing is a very low-risk strategy. The payments simply aren’t finalized until the sale or conversion.
      • High ROI – Most importantly, performance marketing campaigns deliver a huge Return on Investment (ROI), which involves relatively low risk for the merchant. Businesses only need to pay for what they request, and performance marketers can always predetermine an estimate with the profit potential.
      • Third-party validation – It’s always great to have someone from the audience say how fascinating your brand is rather than to claim it yourself. Performance marketing exactly does that, and it effectively incorporates third-party validation when influencers and affiliates promote and recommend your products.

92% of B2B buyers are more likely to purchase after reading a trusted review.”

Performance marketing has undoubtedly evolved into a sophisticated, multidisciplinary field of marketing and advertising.

At its core, it still stands on the principle of charging businesses only when their targeted action is taken by the consumer or when their expected performance is somehow met. However, performance marketing now encompasses many creative spaces and has become the most powerful strategy to advertise online.


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