One of the most underrated digital marketing techniques is performance marketing.
Almost 50% of head marketing officers in companies spend a significant portion of their budget on performance marketing. They use performance marketing software and only spend money
when viewers have taken specific actions or made purchases. In this article, you will learn everything about performance marketing, how it works and why you should use this form of marketing.
What is Performance Marketing?
Performance marketing is a form of digital marketing strategy that is result driven. It is the perfect approach for companies and advertising agencies aiming to reach their audience at scale through online course marketing strategies and other targeted methods. This is because the payment for ads is based on the action perpetuated by viewers through viewing the ad content.z
Performance marketing operates when advertisers are connected with agencies to create and place ads for the company they represent on various performance marketing channels. These channels include web content, social media, videos, search engines, and connected TV.
So rather than the company paying for ads the traditional way, they pay the marketing service providers based on how well the advertisement performed. The rate to be paid is obtained through the measurements of sales made, bought impressions, and the number of clicks using performance marketing software.
How Performance Marketing Works
Advertisers and the company’s marketing officers place their advertisements on a selected channel and then make payments based on the performance of the ads. There are various acceptable ways to pay for performance marketing, it includes:
Cost per click (CPC)
Cost per impression (CPM)
Cost per Sale (CPS)
Cost per lead (CPL)
Cost per acquisition (CPA)
Cost Per Click (CPC)
This is a method of payment where the advertisers pay based on the number of times viewers click on their content. This is an excellent method to use for driving traffic to your website.
Cost Per Impression (CPM)
Impressions are the number of views your ad gets, and cost per impression enables you to pay for every thousand views your ad gets. For instance, if your advert had 30,000 viewers, you would pay a base rate multiplied by 30.
Cost Per Sale (CPS)
Cost per sale allows you to only make payment for ads when sales have been made through the ad. This is the most common means of payment in affiliate marketing.
Cost Per Lead (CPL)
Cost per lead entails paying the marketing service providers when a viewer or visitor signs up for a webinar or email newsletter.
Cost Per Acquisition (CPA)
CPA is quite similar to cost per lead and cost per sale. But the cost per acquisition is more general than being attached to leads or sales. Cost per acquisition entails paying when clients complete an action, which could include making a sale, visiting a website, and sharing their contact information.
Performance Marketing Channels
Several channels work best with performance marketing that agencies use for driving traffic. They include:
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Display Ads
Programmatic display ads are mostly seen on the Facebook newsfeed and at the bottom or top of a web page. However, display ads are gradually going extinct because of the widespread use of ad blockers and what professionals call banner blindness. Still, many brands find display ads successful at engaging clients through interactive videos, content, and graphic design.
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Native Advertising
Native advertising is a form of performance marketing channel that uses the appearance of a website to advertise a sponsored ad. It is popular among e-commerce websites and the Facebook marketplace.
Users need help to differentiate between original content and your ad because your content stays seamlessly beside the main content. This helps promote your brand naturally.
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Content Marketing
Content marketing educates your targeted audience about the product or service you render and concentrates on giving helpful information to your audience that also advertises your brand. Content marketing includes e-books, blog posts, and more.
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Social Media
Social media is the widely used channel for most performance marketers because of the vast opportunities it offers. It helps advertisers to reach their target audiences and direct them to their websites. A viewer can also share your sponsored ads, which will give your brand a broad audience reach.
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Search Engine Marketing
Most online research conducted is done through search engines, which means having a website that is search engine optimized for marketing purposes is essential.
Benefits of Performance Marketing
There are four significant reasons brands should use the performance marketing strategy to drive traffic and sales of their products. They include:
- Performance is easily tracked due to the ability to measure results via analytics tools (performance marketing software).
- Performance marketing doesn’t require you to pay any upfront fee and payment is only made when the desired objective is met.
- Performance marketing is more result-focused. Estimated results and budget are already planned from the beginning.
- It benefits the brand’s publicity, as it helps them reach a larger audience through organic means. Furthermore, it also promotes your products and services in key market areas.
Conclusion
Performance marketing is a form of digital marketing that helps advertisers save money, track ad results, and create minimal-risk campaigns. Advertisers can decide the suitable measurement for their ad and select the best channel to use in achieving the business objectives.
To gain success in performance marketing, you will need to prepare a good landing page that has passed through A/B testing to boost your results. You can go through the data after the ad campaign to strategize better in your next campaign.
