We hear a lot of buzz about performance marketing these days along with video marketing, podcasting, and content marketing. But most of us are confused about what is what?
Let’s dive deep into the aesthetics of Performance Marketing.
By definition, it is nothing but an online advertising strategy that is performance-based and is subsequently making a bigger mark in the digital marketing world with every passing day. Digital Marketers continue to raise their stakes in performance marketing while adhering to goals like new customer acquisition, customer reach, engagement, and conversion strategy.
So ideally, this performance that is tied to this kind of marketing can be an array of executed desired results, like completed lead, sale, booking, or download.
Most people confuse it with affiliate marketing. But Affiliate Marketing is an interchangeable term and a piece of a larger “performance marketing” umbrella. This includes other online marketing initiatives like Influencer Marketing, Email Marketing, Search Marketing, and any other form of marketing where the marketing partner exchanges sales (or completed desired actions) for commission payouts.
So naturally, you’d be wondering: How does Performance Marketing actually work?
Basically, Performance Marketing consists of four distinct groups:
1. Retailers or “Merchants”
2. Affiliates or “Publishers”
3. Affiliate Networks and Third-Party Tracking Platforms
4. Affiliate Managers or “OPMs” (Affiliate Management Companies)
Benefits of Performance Marketing
Performance Marketing can bring a plethora of benefits to your brand. There are many benefits that this can add to your growth and online marketing mix.
Besides the obvious benefits that are out there like building your brand through different third partners with their own audiences, budgets, and engagements, increasing your market share, targeted traffic, and user-base. Performance Marketing can also reduce your risk factors, increase your market reach, and substantially decrease budgets while sky-rocketing your brand and revenue streams.
Let’s look at a few of them:
Better Planning - These campaigns are easy to budget and account for because marketers simply have to identify goals and come up with an ideal cost per action. One other excellent benefit of performance marketing is that outcomes are a priority throughout the campaigns which directly means that ads will be optimized for goals in all regards, be it viewable impressions, clicks, leads, or whatever else.
Pay for Results - One of the most obvious benefits of performance marketing campaigns is the fact that marketers will only pay for accountable results without any undefined overhead.
Track performance- And the best part is this: Performance Marketing is sufficiently trackable, specifically measurable, and completely transparent. In the current times, brands can also see the entire click-to-consume path of different sections of buyers, and then they can further go on to identify where to invest more and which partners, which channels, and produce better results.
All in all, because performance marketing campaigns are paid off after the desired action takes place and the goals are achieved, the risks are comparatively lower, the CPA (Cost Per Acquisition) is mostly lower and the ROI is relatively higher