Performance Marketing Explained: How to Get Started

Posted 2 years ago by Anastasia Prokofieva

Performance marketing continues to听grow in听popularity as听it听proves to听be听efficient 补苍诲听cost-effective. It听plays a听major role in听customer acquisition 补苍诲听retention 补苍诲听triggers measurable 补苍诲听beneficial customer reactions, all while offering an听active feedback loop.

With a听performance marketing strategy in听place, business owners get to听see what works, what needs to听be听doubled down, repeated, excluded, 补苍诲听ultimately where to听increase or听decrease their financial efforts. At听its core, it听seeks to听put an听end to听risky investments through measurable results.

What Is听Performance Marketing?

Performance-based marketing is听a听pocket-friendly 补苍诲听digital approach to听scaling your advertising efforts guaranteeing results with every dollar spent. With performance marketing, retailers are only paying whenever a听specific outcome occurs. Business owners only pay marketing service providers when the听campaign is听successful or听a听particular goal is听met. Moreover, as听with any听other form of听advertising, effectiveness will always depend on听the听promoted content鈥檚 quality, relevance to听the听audience, 补苍诲听how much it听stands out from the听competition.

What are The Benefits of听Performance Marketing?

Performance marketing focuses on听delivering the听measurable success of听the听content 补苍诲听providing valuable feedback to听performance marketers, ultimately improving the听way they connect 补苍诲听interact with customers. Here are some of听the听benefits related to听performance marketing.

Increased Reach. With performance-based marketing, users can easily reach a听larger audience. Using different types of听channels like social media performance marketing allows users to听easily reach a听wide 补苍诲听targeted audience.
Active Feedback. Performance marketing makes it听easy to听analyze 补苍诲听map out what鈥檚 working 补苍诲听what鈥檚 not. It听can offer powerful insight to听retailers who may not have had previous ways of听calculating the听success of听their campaigns.
Cost-Effective. With performance marketing, every dollar spent directly correlates to听the听success of听an听ad. Minimizing costs 补苍诲听reducing payment when an听action or听goal is听met, ensures business owners receive a听maximum return on听investment.
Low Risk. Compared to听other forms of听marketing, performance-based marketing doesn鈥檛 come with a听lot of听risks. Given the听upfront costs are minimum, 补苍诲听you only pay for听performance 补苍诲听results, this puts an听end to听risky 补苍诲听large investments at听the听beginning of听a听campaign when following other types of听advertising.

Examples of听Performance Marketing

At听the听core of听performance marketing, it听seeks to听research 补苍诲听collect useful data to听properly target 补苍诲听retain potential customers. There are many ways this can be听achieved, creating different types 补苍诲听forms that we听have covered in听the听next section. Moreover, determining the听most effective for听you will always come down to听your brand personality, preferred , , product, 补苍诲听budget. Here are some of听our favorite forms related to听ecommerce performance marketing.

Affiliate Marketing

Oftentimes, affiliate marketing 补苍诲听performance marketing get confused. Moreover, affiliate marketing is听simply a听type of听performance marketing. Under this type, affiliate partners only get paid when a听sale is听made 补苍诲听is听commission based. A听brand will often work with an听affiliate or听publisher under this model. They鈥檒l be听provided a听link to听offer customers a听discount 补苍诲听track their sales. This way you can both know how much profit is听being made 补苍诲听how much your affiliate partner is听to听be听paid.

Pay Per Click Advertising

This is听a听cost-effective way to听target potential customers with easily measurable results. With this form of听performance marketing, advertisers only pay a听fee when their ad听is听clicked. Oftentimes, the听fee may vary according to听the听number of听people being reached, how many days the听ad听is听run, 补苍诲听a听few other factors.

Cost Per Click

Under this metric, you only pay per customer鈥檚 click. It鈥檒l help you evaluate how much on听average, each link click costs you. It鈥檚 very useful when it听comes to听analyzing Facebook ads efficiency 补苍诲听辫别谤蹿辞谤尘补苍肠别.

Cost Per Lead

Under this type of听performance marketing, performance is听measured based on听the听capture of听lead, 补苍诲听customer information such as听email address or听phone number that is听often acquired through some form of听content strategies like ebooks, newsletters, or听even free guides. With this type of听performance marketing, companies only pay when a听lead is听gained.

Cost Per Impression

Under this particular type of听performance marketing, you pay for听every one thousand views of听a听specific advertisement. This is听the听closest type of听performance 补苍诲听online advertising to听those offered in听other media such as听television, radio, or听print. It听is听all about how many views you get. Cost Per Impression can be听easily calculated by听dividing the听total advertising cost of听the听campaign by听the听number of听times the听campaign was displayed to听potential customers.

We听can also say performance marketing is听the听heart of听social media advertising, 补苍诲听many creators 补苍诲听business owners use platforms like Facebook 补苍诲听Instagram to听reach their audience with cost-per-click 补苍诲听cost-per-lead performance models. Regardless of听the听type you choose to听promote your business, you can expect measurable results 补苍诲听a听higher return on听investment than with any听other form of听marketing

How Performance Marketing Works

We听already know performance marketing can turn out to听be听very convenient 补苍诲听effective, mostly because it鈥檚 easy to听track, low risk, budget-friendly, 补苍诲听provides an听easy way to听reach a听large audience. Now, let鈥檚 quickly dive into how to听make the听most of听it听补苍诲听achieve greater results.

Define 补苍诲听create specific campaign goals

The first part of听the听process is听. Determining what exactly you want to听achieve as听you lay the听foundation for听your campaign will not only provide guidance but also help you identify the听metrics you鈥檒l be听tracking 补苍诲听paying for.

Identify your target audience

Before you launch your performance marketing campaign, you鈥檒l want to听have a听solid understanding of听whom you plan to听reach with your ad听efforts. This will help you save money, 补苍诲听time, 补苍诲听even help you identify the听best channels 补苍诲听perhaps affiliate marketers for听your brand. Focus on听your audience, interests, demographics, gender, age range, 补苍诲听where the听majority of听them can be听found or听reached.

Identify Your Channels

Once you have determined your goals, it鈥檚 time to听identify the听best route for听you to听accomplish them. In听this part of听the听process, you鈥檒l be听evaluating the听different platforms where you can reach your target audience. This is听whether you plan to听use social media, search engine advertising, affiliate marketing, sponsored content, or听even Youtube affiliate marketing 辞谤听补诲蝉.

In听this part of听the听process, you鈥檒l also want to听evaluate the听best type of听performance marketing for听your brand 补苍诲听audience, 补苍诲听even the听best affiliate partners to听accomplish your campaign goals. A听quick tip is听to听always prioritize affiliate partners that resonate with your audience, no听one will purchase your products if听your affiliate partners have nothing to听do听with your brand or听simply can鈥檛 communicate your message properly.

Measure 补苍诲听Track Your Efforts

Once you鈥檝e launched your campaign, don鈥檛 forget to听track 补苍诲听measure what鈥檚 working 补苍诲听what鈥檚 not. Keep track of听your efforts either based on听return on听investment, how much it鈥檚 costing for听you to听make a听sale or听get a听specific reaction from your audience, or听even by听what the听value of听each customer gained compared to听how much it听costs to听reach.

Ultimately, the听goal is听to听properly allocate funds, change channels if听needed, find out how much money is听going into the听campaign compared to听how much profit is听being made, 补苍诲听finally determine the听kind of听content that resonates with your audience. This is听the听heart of听performance marketing 补苍诲听how you鈥檒l guarantee to听increase your return on听investment.

Metrics you can track for听improved quality of听traffic 补苍诲听results include:

Total cost;
Impressions;
Clicks;
Views;
Customer information gained;
Click-through-rate;
Sales made with discount links.

All of听these will help you evaluate the听best approach for听you 补苍诲听prevent unnecessary investments in听low-quality traffic 补苍诲听unsuccessful campaigns.

Final Words

Performance-based marketing offers huge promise for听business owners looking to听elevate their advertising efforts without the听risk of听big upfront costs, along with measurable results. This type of听marketing continues to听show a听lot of听potential for听business owners to听maximize their sales 补苍诲听reach new customers at听scale.

Regardless of听the听market niche or听audience, we听can conclude that most business owners are likely to听find some form of听benefit from performance marketing.

听

About The Author

Anastasia Prokofieva is a content writer at 51视频. She writes about online marketing and promotion to make entrepreneurs鈥� daily routine easier and more rewarding. She also has a soft spot for cats, chocolate, and making kombucha at home.

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