What is performance marketing?
Performance marketing differs from traditional marketing because it is a unique blend of brand marketing and paid advertising, that is result-driven. Like traditional marketing, performance marketing strategy includes identifying KPIs, or desired actions, including anything from click rate to conversion rate. However, performance marketing only pays out when the desired action occurs, meaning advertisers no longer pay an upfront fee for ad space; they pay based on performance. By doing this, the power is put back into the hands of the advertiser and ensures money isn’t wasted on campaigns that don’t drive results.
Performance Marketing |
Brand Marketing |
| Short-term conversation | Long-term value |
| Lead generation | Customer loyalty |
| Trackable | Credibility |
Getting started with performance marketing
With a playground of channels to choose from and ever-changing consumer behavior, it can be hard to know where to start when creating a performance marketing campaign. The key to a successful campaign varies for every business, but here are some fundamental steps:
1 Establish your campaign goal
Before you dive in, take some time to sit down and lay out your campaign goals. Your goals will determine the desired action and, ultimately, your result. When establishing your goals, keep in mind the SMART method to ensure that you’re setting yourself up for success.
2 Choose Your Channels
Once you decide what you want your business to get out of the campaign, determine what digital channels you’ll use to advertise. When narrowing down your digital channels, it’s important to keep in mind what your target audience responds to and interacts with to bring the most value to your audience.
3 MEASURE AND OPTIMIZE YOUR CAMPAIGN
Since performance marketing campaigns are only paid out when the desired action occurs, data is generated the moment they are live. Once you create and launch the campaign, it’s essential to keep track of key metrics to determine what channels are performing best, then adjust as necessary.
MEASURING SUCCESS
With any marketing strategy, it’s vital to track your success through measurements. A key element of performance marketing is measuring the return on investment (ROI), which is when every activity and action is measured, reported, and analyzed against pre-defined KPIs. Regularly tracking ROI through performance optimization tools is critical because the more data you have, the more effective and accurate your results will be. Some key metrics commonly used in performance marketing include:
Key Metric |
Definition |
| CPI (Cost per Impression) | The average cost required to generate a single impression based on total campaign spend divided by total number of impressions. |
| CPC (Cost per Conversion) | The average cost required to generate a conversion based on total campaign spend divided by the total number of prospects turned into leads. |
| CPA (Cost per Action) | The average cost required to generate an action (comments, shares, link clicks, etc.) based on the total campaign spend divided by the total number of actions. |
Whether your goal is to increase website traffic or boost brand awareness, this marketing strategy is beneficial to your company. Performance marketing is easy to track, low risk, and ROI-focused, so your business is continually reaching new heights.
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