What Actually Performance Marketing Is? Learn How It Works, Benefits & Channels.

Ever wondered why some companies get great sales overnight? Or why a startup gained so much popularity in a particular market? Or to sum up with all such doubts: Why & how do some businesses grow faster than others in the same niche and with the same working capital or the same amount of investment and resources.

Well, the answer to all of this is Performance Marketing. Yes, Marketing is one thing that can make or break the game for you while making an entry into the market even with the best products across the world. You might have the most useful or the most luxurious products all around the market but you will still lose the bet if you don’t market your product right.?

So, what is Performance Marketing?

While Marketing a product, we need to get the 4Ps right i.e., Product, Price, Place and Promotion. To under the concept of Performance Marketing we need to under the 4th P of marketing concept i.e., Promotion. Promotion Marketing is done to spread brand awareness resulting in more sales. Now, Promotion can be done online as well as offline via various methods and practices that we see in our everyday life like Advertisements, sales promotions, direct marketing's and so on. Now, when we try to promote something online using blogs, articles, social media, digital ads etc. then we are eventually driving our sales and growth via various Digital Platforms and this form of promotional marketing is known as Digital Marketing.?

Now, Digital Marketing is a very wide concept and a major part of it is Performance Marketing, wherein, the business forms strategies based on previous achievements & failures and their near future goals. To meet the revenue targets and eventually increase the brand awareness in the target markets, the companies formulate data driven strategies to improve their performance and hence try to become the beasts of their niche.

How does Performance Marketing Work?

Performance Marketing works differently for each brand based on their goals, requirements, targets and target markets. Just to give you a gist of performance marketing, here is a brief analogy:?

Let’s say, a brand needs to promote itself and spread enough knowledge about its products in the market for its potential consumers to notice and eventually be their regular customers, resulting in increased sales and growth in revenue trajectory as well as their brand awareness.?

So, this is where performance marketers step in. The marketers do a thorough research about the best strategies that can be made in order to accomplish the brand’s requirements and in return the brands pay a wholesome amount for the marketing services and the amazing results it has received after the execution of the specialized marketing plan advised by their performance marketing manager. Now these results are generated through various activities or performance of the user. These activities include impressions, clicks, sales and lead. All of these are performances that formulate separate campaigns or contracts between the Publishers and the Advertisers.

So, now a question arises here.?

Who are Publishers and Advertisers??

Performance Marketing is a teamwork between Advertisers (Brands - who want to promote) and the Publishers ( A network that helps in promoting the brand).

So, this is how it works:?

Basically, an Advertiser (Brand) connects with agencies or publishers in order to get themselves valuable promotions using various performance marketing channels.?

Another, question that pops up now is:?

What are Performance Marketing Channels????

A Performance Marketing Channel is a combination of Advertising and Brand Marketing wherein the marketing company (o r Affiliate) is only paid after a certain activity (Click, Sale, Lead, Booking, Download etc.) is completed based on the advertising programs.?

Performance marketing channels include social media marketing ( Instagram, Facebook, Pinterest, Medium etc), search engine marketing, videos, web content and much more.?

Now, performance marketing does not work on traditional terms of marketing wherein a stipulated amount was paid to the marketing company for all its strategies and results.?

Now, the advertisers pay based on how the campaigns have worked out for them.?

For eg: No matter how aggressively the marketing companies run the ads or promotional banners, they will be paid on the basis of the sales or leads generated through these campaigns and activities. Hence, it’s more rational for the advertisers to minimize the hassles and get promoted via a marketing agency or a trusted publisher.?

What are the various campaigns in the Performance Marketing Model??

The Performance Marketing Models run via multiple campaigns based on the performance or activities of a user i.e., Clicks, Impressions, Sales, Lead, Download, Bookings etc.?

Here is a brief description about each of these campaigns:?

Cost Per Click (CPC)

As the name suggests, the Advertisers pay based on the number of clicks received on their ads posted by the marketing agency on various marketing channels. This campaign is usually followed to drive more traffic on the Advertisers website.?

Cost Per Impression (CPM)?

This is probably based on the number of views on the Ad or banner run by the agency. The Advertiser pays on per 1000 views/ impression basis.?

Cost Per Sale (CPS)?

This is one of the most preferred campaigns of every advertiser. Here, the advertiser pays based on the number of sales derived from the Ads.?This form of model is also known as Affiliate Marketing?

Cost Per Lead (CPL)?

As the name suggests, this model helps in generating leads i.e., getting the data of the potential buyers and then maintaining a proper follow up with them to derive sales. This is usually done when a user signs up for a newsletter or webinar using his email Id or contact number.?

Cost Per Acquisition (CPA)?

Under this model, the Advertiser pays only when a particular action is taken by the user. It could be a sale, or sharing contact information or reading a blog etc.?

Now to run all of these models, we need to know more about the various Performance Marketing Channels to derive better results for both the advertiser as well as the publisher.?

So, let’s learn about the top performance marketing channels.?

Top Performance Marketing Channels:?

There are various types of performance marketing channels that a publisher or agency uses to drive traffic to the advertisers website. A few of the top performing channels are:?

1. Content Marketing

It is one of the most effective ways to generate data driven results. Content Marketing is about educating the consumer, it is about providing the relevant information to the consumer using various blog posts, e-books, articles, case studies and much more. The placement of just a few links of the relevant product in your content can generate sales for the advertisers. One page offering complete researched information with the link of the product makes it convenient and more convincing for the buyer to take action and drive great results for the advertiser as well as the publisher.?

2. Banner (Display) Ads?

Interactive videos, ads, graphics, informative content in a video, banners, posters, all of these are forms of Banner (Display) Ads. It is basically that digital piece of content that is used to convince the buyer to buy more or at least take an action like clicks, sales and lead. Banner Ads show humongous growth in sales because of its interactive content and copywriting in the display ads, but recently these ads have shown a little decline in its performance because of the ad blockers, also known as banner blindness. Irrespective of such issues, some companies are still successful in gaining sales and growth in revenue via display Ads.?

3. Native Advertising

Native Advertising is quite similar to Banner (Display) Ads. Native Ads are basically the ads that are seen in the recommended videos section of a particular video. It helps to promote sponsored videos in a very natural way. It is very difficult for the user to figure out the difference between the organic content and the sponsored content, resulting in the consumption of both without any doubt or preconceived notions. This derives organic traffic to the Advertisers website.?

4. Social Media?

Without a doubt, social media platforms are one the most used platforms out of all of this. An average tech friendly person spends most of his time online on various social media platforms like Facebook, Instagram, LinkedIn, Pinterest and much more. To enhance the results of performance marketing social media optimization plays a major role. It helps in creating brand awareness as well generating sales and leads via various activities such as Facebook ads, Instagram ads, LinkedIn shares, trending tweets on twitter and much more. It helps to reach a wider audience to derive more traffic to the brand.?

5. Search Engine Marketing

Most of the organic traffic is derived via organic search on various search engines like google, Bing etc. With optimized search engine marketing, the publisher can generate great results for the brand. For organic search engine marketing, content and on page SEO are the two pillars of strength to drive things further. Better organic searches lead to more clicks and better dwell time leading to better working of the CPC - Cost per click campaigns.?

Now that we are aware of how things work with performance marketing, we need to know if it is a wise decision to make or not.?

So, here are a few benefits of Performance Marketing:?

Well, investing in performance marketing is an amazing money saver deal. It gives you much more in comparison to what you spend on it. Performance Marketing is legit worth the risk. It helps to scale your business from the scratch and build a name for yourself. It makes the growth process much easier and streamlined in a way that it creates the best strategy for your business to grow as fast as possible in the least cost advisable.?

It helps to Fastrack your business journey from zero to hero in the least time span possible.

FAQs

1. What is meant by Performance Marketing?

Ans. Performance Marketing is a great way to promote a brand and generate genuine sales for them. It is better described as a relationship between the Advertiser and the Publisher/ Marketing Agency, wherein the Advertiser pays the publisher based on the result it has generated using multiple marketing channels.?

2. What are the five different channels of Performance Marketing??

Ans. The 5 top performing marketing channels are:?

• Content Marketing?
• Social Media Marketing?
• Search Engine Marketing?
• Banner (DIsplay) Ads?
• Native Advertising?

3. What are the various campaigns in Performance Marketing??

There are various campaigns to run a performance marketing model. Some of them are:?Cost per sale (CPS), Cost per impression (CPM), Cost per Lead (CPL), Cost per Acquisition (CPA) and Cost per Sale (CPS).?

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