Performance marketing is the term given for online marketing campaigns where advertisers pay marketing companies or advertising platforms for results achieved, such as clicks or conversions, or leads. The usage of the internet and the way consumers browse various websites have changed the world on a major scale. This has also changed the way of marketing and the marketers are constantly looking for different ways to advertise their product and sell. In this era, marketers have got a way to gather data over the internet, analyze it and perform better. Marketers now optimize their campaigns using these data and perform better in the market. Therefore, it is called “Performance Marketing”. To know more about Performance Marketing and how to use this to grow your business, connect with Online digital marketing course.
WHAT IS PERFORMANCE MARKETING?
You may have come across various performance marketing websites and links while scrolling through various links, videos, and websites. performance marketing is a type of digital marketing where a combination of paid advertising and brand marketing is put together. But the payment is done only when the transaction takes place i.e. the desired action occurs.
This is a win-win marketing opportunity for both the merchants and the publisher. It allows both parties to target the specific audience using strategy and is all based on performance. This type of marketing gives power to the advertiser as they would pay only after a successful transaction takes place. This would give more confidence to the advertisers as this would keep a check on their marketing budget and would pay only for successful campaigns.
Now many people ask if affiliate marketing, social media marketing, native advertising, and other various marketing techniques are the same? Let us take a brief look at some of them. To know more about them in detail you can join Digital Marketing classes in Pune
- Affiliate Marketing: Many people consider performance marketing and affiliate marketing to be the same, but it is in fact not the same. We can say that affiliate marketing is a form of performance marketing. With affiliate marketing, a commission is earned for the online promotion of various products or brands of other companies. An affiliate marketer advertises on behalf of the merchant to drive the consumers towards the merchant’s website by clicks and sales. The affiliate only receives payment for successful actions such as clicks, sales or leads.
- Native Advertising: Native advertising is a type of ad content that is designed in such a manner that it blends with all the contents surrounding it – in layman’s language, it doesn’t look like ad. Native ads appear on the content being read by the reader and seem contextually relevant. Some studies suggest that native ads bring in about an 18% greater lift in purchase intent and 9% for brand affinity responses compared to banner ads.
- Social Media Marketing: As the name suggests, this type of marketing involves social media platforms where influencer marketing or paid advertising strategies take place. To get the utmost promotion a target audience needs to be selected before launching the campaign, for e.g. LinkedIn caters to the professionals whereas TikTok attracts young generations, and Facebook and Instagram have a huge user base. This type of marketing enables the marketers and agencies to reach the consumers and attract them on a massive range. Social media platforms have a clear metric system to calculate KPIs such as click-through rate (CTR) and cost per click (CPC).
- Sponsored Content: This is another way of performance marketing that emerged during recent times where marketers and merchants pay social media influencers and celebrities to endorse their products or brands and are paid accordingly. This type of marketing usually involves dedicated posts or articles by these influencers and celebrities in return for compensation.
- Search Engine Marketing: This type of marketing can be divided into two parts, paid search marketing or organic search marketing.
Paid search marketing is simply when an advertiser is paid when the consumer clicks n the ads on various websites such as Google, Yahoo, or others; whereas organic marketing is the opposite as it uses unpaid methods such as search engine optimization and depends on the search engines algorithm to rank in the top.
These are some of the most used forms of performance marketing techniques and we can say that they are a form or a subset of performance marketing but not the same.
What are the Benefits of Performance Marketing?
Now you may ask why should we use performance marketing? How is it useful and beneficial? So now let us discuss some of the benefits of using performance marketing:
- The most obvious benefit is that it will you grow your business by presenting yourself to the world on a daily and worldly basis. Also, you will have added creativity from your advertising partners.
- It is easy to track. Thus, making the calculation of payment much easier as you only need to pay if the transaction or the lead is successful.
- With the help of various data analytic tools now we can track the consumers and display our ads to the targeted audience. You can even adjust your ads as per the shift in the market.
- Marketers generally know about their performance campaigns and hence adjust accordingly. This helps them reduce the risk and puts them in a better position.
- Since it is easy to track you can easily manage your advertisement budgets.
What are the Different Modes of Payment used in these types of Marketing?
As we have already discussed earlier the various types of marketing now, we will see what are the different ways in which these marketers are paid for the advertisements shown on the websites.
- Cost Per Impression (CPM): This the amount an advertiser pays a publisher per one thousand times that their advertisement is shown.
- Cost Per Click (CPC): This refers to the amount that an advertiser pays only when their advertisement is clicked on.
- Cost Per Sales (CPS): This refers to the amount that an advertiser pays only when a sale is directly generated by an advertisement.
- Cost Per Leads (CPL): This is the amount an advertiser pays when they receive a sign-up from an interested consumer as a direct result of their advertisement.
- Pay Per Sale/Cost Per Acquisition (CPA): The amount an advertiser pays when a specific action, such as a sale, a form completion, or a click, occurs. This is the most common mode of payment in eCommerce.
Therefore, looking at the different types of performance marketing techniques, their benefits, and the mode of payments we can safely assume that the future of advertisement is Performance-Based Marketing. Marketing techniques may revolve around Performance Marketing in near future. As the world continuously moves on to the digital platform these advertisements would prove to be beneficial to the marketers and merchants as they would keep the markets afloat and help the business to reach the masses. You can also learn about these marketing strategies in detail and practice them by enrolling yourself in Digital Marketing Training in Pune Because of its data analysis methods and payment methods, it gives confidence to the marketers and provides a check on their advertisement budgets.