The term ‘performance marketing’ is self-explanatory. It is just as it sounds- marketing based on performance. This performance is evaluated on desired results such as the number of completed leads, sales, bookings, or downloads.
As a strategy, performance marketing culminates in businesses getting an additional brand and product recognition with an additional benefit of increased consumer engagements, conversion rates, higher than average order sizes, and even third-party endorsements- all leading to sales, and brand loyalty, and increased buyer retention.
Performance marketing professionals rely greatly upon paid marketing channels which primarily comprise of:
* Native advertising
* Sponsored advertising
* Affiliate marketing
* Social media advertising
* Search engine marketing
Performance Marketing Strategy
Performance marketing is all about paying for action. The various strategies most predominantly used and the actions most commonly measured are:
* Cost Per Impression: The sum an advertiser pays a publisher per one thousand times in order for their advertisement to show
* Cost Per Click: The sum an advertiser pays only when the ad is clicked on
* Cost Per Sales: The sum an advertiser pays only when a sale is generated through ads
* Cost Per Leads: The sum that is paid by the advertiser on receiving a sign-up from an interested consumer as a direct result of the ad
* Cost Per Acquisition: The sum that is paid by the advertiser in case of a specific action, for instance, a sale, a form completion, or a click happens
Benefits of Performance Marketing
There’s no doubt that performance marketing comes with a lot of advantages. It not only adds value to your growth but also enhances the online marketing mix. Performance marketing obviously helps build a brand through third partner partners with their own audiences, and budgets, and reach increasing market share, targetted traffic, and audience engagement. It also helps reduce risks, increase market reach, and decrease marketing budgets while widening a brand’s presence and revenue streams. Moreover, performance marketing is completely trackable, measurable, and transparent. Rather, brands can clearly observe the complete click-to-consume path of each and every single buyer so as to identify better where to invest more and in which partners, or which channels, in order to ensure better lucrative results.
Performance marketing involves being paid after the desired action takes place, the risks faced are much lower, and the Cost Per Acquisition is lower, leading to higher ROI for the business or brand. This in turn leaves more room for the budget for several other marketing strategies so as to expand and be tested for a business to grow in this massively competitive world.
No matter where a brand or a business stands in the market, performance marketing always offers the scope for it to grow and improve. All that is need to be done is to find approaches that will work specifically for the brand or business and what needs to be done for not only the brand but also its affiliates and partners. Once the goals are defined, all that is required to be done is to jump in and build those relationships!