The global annual expenses on digital advertising skyrocket to billions of dollars. So it’s not surprising that different online marketing approaches are surfacing and becoming available for all. One of these approaches is performance marketing, also referred to as digital performance marketing or performance media marketing.
Performance marketing is one way to build and establish your brand. It’s also a means to boost your product awareness while interacting with customers without budget limits or clashing marketing channels.
Performance Marketing – What Is It All About?
Performance marketing is basically marketing according to performance which can be a collection of implemented desired results. These can include a fulfilled lead, booking, download, or sale.
In addition, it’s a comprehensive term for both online advertising and marketing programs. Here, advertisers only pay when a necessary action takes place. Various players in performance marketing include merchants, advertisers, networks, retailers, solution providers, OPMs or outsourced program managers, and more.
Performance and Affiliate Marketing: Are These the Same Thing?
Generally, affiliate marketing is a term that appeared before performance marketing and is still being utilized today. Yet as time passed, the meaning of affiliate marketing changed. It became a term describing a bigger image of performance-based marketing outside the classic coupon and loyalty partnerships.
To note, these include native advertisers, social influencers, geo-targeting search partners, mobile app creators, email marketers, and more. Just as it sounds, the term is linked to brand and product marketing. It has evolved into a more dedicated and innovative performance-based strategy that has become a driving force for the following:
- New customer procurement
- Incremental sales
- High ROI campaigns
- Market expansions
- Customer segmentation targeting
When it comes to performance marketing, it includes a more classic “affiliate marketing”. This is known to drive sales via coupon sites and cashback alone. Yet over the past few years, it has become more than this. Technically, affiliate and performance marketing is somewhat the same. However, each of these has different approaches.
To put it simply, performance marketing is also affiliate marketing to a certain degree. Yet, it comes with fresh new technologies and partnerships as part of its mix.
The Difference of Performance Marketing from Other Types of Advertising
Compared to other types of classic advertising, performance marketing only pays for every successful transaction. When it comes to traditional advertising, upfront fees are required, and they don’t depend on an ads’ success. Performance marketing has adequately shifted the traditional value scheme of advertising. Plus, it has also allowed real-time calculations of ROI.
What’s So Special About Performance Marketing?
It becomes something special since it’s a mix of innovation and advertising that helps affiliates and retailers grow their businesses. Campaigns are often targeted for each retailer where the goal is to make everyone successful. So when it’s done right, performance marketing establishes a win-win situation with positive opportunities for affiliates and retailers.
As a strategy, it allows merchants to acquire extra products and brand exposure without the extra cost. It even comes with added benefits of greater consumer engagements, boosted average order sizes, higher conversion rates, and 3rd-party endorsements. All these lead to brand loyalty, sales, and greater buyer retention. It’s also special because performance marketing aids in scaling reach, conversion, and engagement of potential customers in new markets. This can be achieved at lower risks, lower costs, and a great ROI, unlike with other marketing channels at scale.
How Does It Work?
Technology is a huge advantage for performance marketing. It allows apps to recommend other brands/products within other applications to potential buyers using these. When transactions are made, commissions are earned each time.
Here are some examples of how performance marketing works today:
- Tools for conversation optimization
- Influencers that have huge mailing lists
It also works with plug-ins that create an entirely personalized and customized shopping experience for customers. Here, they’re charged only after completing their purchase. This is basically a new trend of marketing based on performance, and it’s done across devices both offline and online. It’s accessible across various marketing channels, which increases marketing exposure and value.
Channels that Utilize Performance Marketing
Different channels use performance marketing, and these are the following:
You can readily set ads on search engines, making them great for boosting online visibility. This is because over 90% of online experiences start with the search engine. Ads on search engines appear right at the top of the SERPs (search engine results pages). These ads are often text-only, but Google Shopping ads that include images can appear on SERPs too.
With search engine ads and performance marketing, you’ll only pay when people click your ads. Then, they’ll convert on the landing page or take another positive action.
These include banner ads and other kinds of visual advertisements. These appear on websites that your audiences and customers visit. Display ads often feature visual elements with copy-and-link to landing pages. Here, users can readily convert into customers or leads. Platforms like Google Ads let you target ads to people whose demographics, interests, or online activities match your target audience.
Sponsored content mixes elements of content marketing and online advertising. It involves making content like videos or blog posts. From there, you pay for its presence on a site that regularly provides similar content. A sponsored content will appear like the rest of the website’s content. However, there will be an indication that it’s sponsored. A predetermined amount will be paid when a person clicks your sponsored article or clicks through to your site from the article.
Social media ads allow you to reach a wider audience on social media. There are also various ad formats, targeting opinions, and payment models. Social media advertising is just like other kinds of online advertising. You can target specific users using the ads and reach more of your followers and users who aren’t following you.
Affiliate marketing is another form of online marketing. Here, an individual or a company receives payment for sending new customers or leads to a business site.
The individual or the company is also referred to as an affiliate or publisher. In this type of marketing, the affiliate promotes another business’s product or service by linking to them. Another way is by placing ads for the other company on the affiliate’s website. When a person visits the site, they will stumble upon the ads. If this results in a click, lead, or sale, the affiliate receives a commission.