WHAT IS PERFORMANCE MARKETING
We hear the phrase “digital marketing” used a lot in a narrow sense. In reality, there are several sorts of digital marketing, and each type’s channels and possibilities are expanding on a daily basis. Performance marketing is an often-overlooked digital marketing concept. Advertisers only pay for particular activities when using performance marketing. When a visitor clicks over to their page or makes a purchase, for example. Let us understand what performance marketing is.
Performance marketing is a results-driven digital marketing strategy. Since payment is based on how users interact with the content, it is ideal for businesses looking to reach a large audience. Advertisers collaborate with agencies or publishers to develop and display ads for their businesses across a variety of performance marketing channels, including social media, search engines, videos, embedded web content, and more. Rather than paying for advertising in the usual method, these marketers pay depending on the amount of clicks, impressions, shares, or purchases that their ad generates.
This win-win marketing approach lets both a store or “merchant” and an affiliate or “publisher” to properly target campaigns in a strategic, high-ROI fashion, all based on performance. A merchant could be certain that their money is being properly spent since they are already converting their target audience before they pay for the transaction by paying the affiliate or publisher when a specified action is done. Furthermore, because merchants are only charged once the desired action is taken, they obtain additional benefits such as free brand exposure and targeted clicks.
How Performance Marketing Functions:
Advertisers place their advertisements on a certain channel and then pay according to how well those advertisements work. When it comes to performance marketing, there are a few different methods to pay:
1. Cost Per Click (CPC)
Advertisers are paid on the basis of how many times their ads are clicked. This is an effective approach to increase visitors to your website.
2. Cost Per Impression (CPM)
Views of your ad are referred to as impressions. You pay per thousand views using CPM (so if 25,000 people see your ad, you’d pay your base rate multiplied by 25).
3. Cost Per Sale (CPS)
You only pay with CPS if you make a sale as a result of an ad. Affiliate marketing makes extensive use of this framework.
4. Cost Per Leads (CPL)
CPL works in a similar way to cost per sale in that you pay when someone registers for anything, such as an email newsletter or a webinar. CPL creates leads, allowing you to follow up with clients and increase revenue.
5. Cost Per Acquisition (CPA)
CPA is akin to CPL and CPS, however it is a more broad term. Advertisers are compensated when customers execute a certain activity (which could include making a sale, sharing their contact information, visiting your blog, etc.).
Benefits of Performance Marketing:
With the future of digital marketing becoming brighter by the year, leveraging performance marketing channels can help you optimize your advertising efforts to suit your company’s demands without spending too much money. Performance marketing is a fun and efficient approach to broaden your audience and reach while also collecting crucial data. The advantages don’t end there. It’s simpler than ever to build your business when you embrace the entire capabilities of performance marketing, from native and affiliate advertising to sponsored social media content.
Top Performance Marketing Channels:
Let us now look at which channels work best for performance marketing.
1. Display Ads
Banner or Display Ads are the most common type of ad. You have undoubtedly seen a lot of display advertising recently if you have been online. These advertisements display on the right-hand side of your Facebook newsfeed, as well as at the top and bottom of the news website you just visited. Despite the fact that display advertising is losing popularity as a result of the growing use of ad blockers and what experts refer to as “banner blindness,” many businesses are still finding success with interactive content, videos, and compelling graphic design.
2. Native Advertising
Native advertising makes use of a website’s or page’s natural appearance to advertise sponsored content. Sponsored films, for example, may show in the “Watch Next” portion of a YouTube page. Native advertisements are also common on ecommerce sites, as you may have noticed on Facebook Marketplace. Native advertising is efficient because it integrates your sponsored content with other types of organic material. Users will often be unable to distinguish between various types of material, allowing you to advertise your business in an unobtrusive manner.
3. Content Marketing
It is all about informing your audience when it comes to content marketing. It also costs 62 percent less than outbound marketing and creates three times as many leads. The goal of content marketing is to provide visitors with relevant information while also placing your brand in context. Blog entries, case studies, e-books, and other forms of content marketing can be used.
4. Social Media
Social media is a paradise for performance marketers. It not only allows you to reach consumers and drive them to your website, but it also allows them to naturally share your sponsored content, expanding your reach well beyond the initial post. Although Facebook provides the most comprehensive set of offerings for performance marketers, other networks like LinkedIn, Instagram, and Twitter also provide several ways to contact new clients.
5. Search Engine Marketing (SEM)
Because the majority of online research is conducted through search engines, having a site that is optimised for search engine marketing (SEM) is critical. When it comes to performance marketing, the cost-per-click (CPC) is paramount, especially for sponsored advertising. Several performance marketers rely on content marketing and SEO-optimised landing pages for organic SEM.
