You might all have heard of all this buzz going around about performance
marketing. Why is that? What is performance marketing? Keep reading and you
will find all your answers.
What do you expect out of your digital marketing campaigns?
Results. Everyone wants results. Whether its sales, app installs, ad clicks or
anything else, you always have a goal in mind. So, wouldn’t it be great that you
only pay if your objectives are met?
It sounds nice, right? Well, you can do it with performance marketing.
What is Performance Marketing?
Performance marketing is a form of digital marketing where customers such as
businesses pay marketing service providers after certain objectives have been
Utilizing the potential of the digital marketing skills for result oriented
marketing is performance marketing.
No matter how much effort a marketing firm put in a campaign, it will only get
paid by a business if the campaign drives the desired results. Ultimately,
performance marketing helps in driving business growth.
Take this example for understanding how you can use performance marketing.
Let’s take PrintBlow, an online photo lab. They are using Facebook Ads to drive
users to take specific actions.
PrintBlow used performance marketing, they could pay each time for a clickthrough or they could pay whenever someone clicks these product options on
the ad’s landing page.
That’s how performance marketing works.
Benefits of Performance Marketing
Trackability and Measurability
One of the best things about performance marketing is that it’s trackable and
Unlike traditional methods, marketers can track their campaign’s
performance and optimize the marketing strategy to generate results.
Marketers benefit from quick insights into performance, so it allows to
see all the data, measure results and determine the effectiveness of the
The goals of the campaign and an ideal cost per action is determined at the
beginning of the planning. So, the proper budget of the campaign can be
For example: If a marketer has a goal of 10,000 clicks per month and expects to
pay $0.20 per click then the suitable budget will be $2,000.
Expanding Revenue Stream
Rather than relying only on existing sales channels there will be another
method for generating revenue. This will be valuable in tough times like if the
sales begin to decrease in other channels.
Performance marketing allows transparency in both ways:
Marketers know their objectives so they know what to do to meet their
While businesses know they don’t have to spend unless they get the
Pay for Results
And, the most obvious one, businesses pay only for results. Rather than
spending money in advance without getting any outcomes, pay when the
desired goals are achieved.
Also, you won’t waste money on a failing campaign so, you can boost your
ROI over time.
Some Performance Marketing Channels
Native advertising is paid media designed to match the look and feel of your
site or app. It provides a better user experience. It takes advantage of the
natural appearance of a web page or site to promote sponsored content.
For example: When reading an article, you will sometimes see a section with
links to related content and pages. These are usually to guide the visitors to
other sites and advertising. Native advertising works because it allows your
sponsored content to seamlessly blend with other content.
One of the top performance marketing channels is social media. If used in the
right manner, it can prove to be a boon for marketers. With billions of active
social media users globally, there are platforms like Facebook, Twitter,
Instagram and more to scale your campaigns and reach new users for your
product or service.
Content marketing focuses on creating, publishing, and distributing content for
your target audience online. This type of marketing may be delivered via
blogs, newsletters, e-books, videos, etc. Content marketing costs 62% less than
traditional marketing and generates about 3 times as many leads. [Source:
Search Engine Marketing (SEM)
With SEM as a performance marketing channel, you can show ads on search
engines like Google, Bing, and Yahoo, when users searches for specific terms.
Combining SEM with a solid search engine optimization (SEO) strategy for your
business helps it rank higher and make it more discoverable.
These performance marketing campaigns are successfully employed in many
cases by local businesses.
Limitations of Performance Marketing
Not good for long-term goals
It’s not much helpful for more general like building brand awareness
online. Because there’s no single metric you can use to track a long-term goal
as success depends on many factors and it takes time. It’s best to use
performance marketing for smaller campaigns that provide immediate insights
to help you inform long-term marketing strategies.
If a campaign doesn’t meet the goals that have been set, not only do
agencies and marketers not make a profit, but they also lose the time and
resources that were invested in the campaign.
For advertisers, the biggest risk they take is that of digital fraud. For example:
There is a fake agency who hires someone to fake the results without, of
course, generating any real conversions for the advertiser. Ad frauds like these
aren’t easy to detect and seriously damage your marketing efforts.
Performance Marketing is all about getting quick results. If you’re too focused
on short-term goals, like impressions, ad clicks it’s easy to lose sight of your
long-term business goals
About the author: Hemant is the Founder & CEO of branding and marketing firm ”Neeti Brand Accelerator” in Mumbai. He is a brand strategist and has worked with more than 150 brands during last two decades. He is also mentor and coach to SMEs and startups. You can visit the website www.www.neeti.biz. You can contact him at firstname.lastname@example.org