What is Performance Marketing?
It is important to clearly understand where your marketing budget is spent and if it provides a positive return to the business. To maximize results, you want to gauge the success of your marketing efforts and make necessary adjustments.
This is a capability that you can’t easily afford with traditional marketing—and even utilizing tracking mechanisms that most profitable organizations already have access to are somehow limited in directing outcomes. Sure, traditional marketing works, but digital marketing does a way better job at tracking ROI with pinpoint precision.
One crucial area of digital marketing discussed in this article is performance marketing—how it works and why every business should use it. It’s one of the channels that guarantee your money is spent exclusively on successful campaigns.
An Introductory Guide to Performance Marketing
Performance marketing is exactly as it sounds—marketing based on performance. It is a comprehensive term referring to a marketing scheme whereby an advertiser pays a marketing company (an affiliate or a publisher) when a specific objective is completed.
This is a win-win opportunity for both involved parties. Whether you’re looking for new leads, sales, bookings, site traffic, or app downloads, this means that you are only paying your marketing partner after these goals are achieved, not only for the effort exerted. This is unlike most traditional forms of advertising, wherein you pay an upfront fee for ad space without a guaranteed conversion.
Performance Marketing by the Number
There’s a rising interest in performance marketing as a means for customer acquisition, engagement, and conversion. Due to its high success rates, it quickly distinguished itself in the digital marketing industry.
- Performance marketing accounted for 16% of US e-commerce sales. It is on par with email marketing and display advertising in driving online transactions.
- Social media (69%) is the most effective channel for performance marketing. According to a 2020 study, other channels marketers use for performance marketing are search engines (49%), e-commerce marketplace ads (37%), partnerships/sponsorships (34%), and display ads (27%).
Businesses allocating much of their budget to performance marketing goes to show how effective it can be in delivering results. These results may be in various forms like clicks, leads, and most of the time, a sale, all of which marketers can measure using third-party performance marketing platforms or software.
Now, this is the part where it can get confusing. We have said earlier that performance marketing is a broad term. It means several digital marketing strategies fall under its umbrella, as long as the payment is based on performance or tangible results, such marketing channels are as follows:
4 Types of Performance Marketing
1. Social Media Marketing
Performance marketing can take place on various social media platforms such as Facebook, Instagram, Twitter, LinkedIn, and TikTok. However, these campaigns may also cross over as influencer marketing when you tap an influencer relevant to your business to promote your brand or host a giveaway.
2. Affiliate Marketing
Affiliate marketing works by recruiting affiliates—an individual or a business—to promote and sell your products to others. You would then compensate them through commissions on every sale they make or any other goal you may have agreed upon.
3. Sponsored Content or Native Advertising
Sponsored content is an article or content dedicated to promoting a brand or a product in return for some form of a payout. Influencers often use sponsored content on social media—functioning as an advertisement but disguised as regular content, except that you would see it tagged as sponsored content.
4. Paid Search Marketing
Traditionally, performance marketing is only tracked and measured by CPC (cost-per-click). But, today, it goes beyond engagement or CTR (click-through rates) and includes other metrics such as impressions or views on a CPM (cost-per-thousand).
No More Guessing with Performance Marketing
Performance marketing can guarantee that your marketing budget is spent on campaigns that deliver tangible results. When done successfully, it can grow your business exponentially and in ways that you wouldn’t usually achieve with other strategies.
The key to success in performance marketing is finding the right partner, setting clear and realistic goals, and monitoring your progress, ensuring that you’re on the right track. Sure, you can run your campaigns yourself, but it will take some time and effort to generate results.
As a digital marketing agency in the Philippines, we are experts in optimizing your performance marketing efforts. Leave this part of your process to us and do your business as usual.
Ready to get started? Contact us today at Createmoto.
