Performance marketing – what does it actually mean?
Performance marketing is a type of marketing, where we pay only for results.
Traditional advertising campaigns mean investing your budget first and then waiting for effects that do not always come. That is why advertisers are looking for solutions that guarantee effectiveness. Preferably those where you pay only for the delivered results. Performance marketing meets these expectations.
Performance marketing – focused on results
performance = efficiency = effectiveness
It is an advertising model that differs from other forms of marketing only in the way of accounting. In performance marketing, you do not pay for the number of views or clicks on the advertisement. You pay only for specific actions that occur as a result of clicking on the advertisement (logo, graphics, active link, etc.). That is, if the user clicks on the ad but fails to perform the specified action, the advertiser does not bear the costs of these marketing activities.
Performance marketing is marketing focused on delivering specific results. There is no room for any ambiguities here. The advertiser only pays when the consumer performs a specific action, e.g.
- registers on the site
- subscribes to the newsletter
- will make a purchase in the online store
- fill in the questionnaire
- will join the brand’s fanbase on social media
- will go to the selected page (e.g., landing page) and leave their data
Performance marketing – the main goal
The main goal of performance marketing is to translate the already developed image into the desired actions of the recipients. Characteristic in performance marketing is the so-called an efficient model of settlements, i.e., payment for achieving the desired share.
The essence of performance marketing are long-term activities, especially when it comes to selling products (the Cost Per Sale model). This, in the perspective of many years of cooperation, results in constantly growing revenues. The affiliate program is the best tool for conducting long-term campaigns in the performance model. By launching the affiliate program, we aim to build and constantly develop our own loyal network of publishers who commit their time and potential to achieve the set goals. In the Cost Per Sale model, publishers are rewarded with commission for successfully completed sales that were made through their work.
Performance marketing – billing models
CPS (Cost Per Sale) – commission for selling products in the online store
CPL (Cost Per Lead) – a fixed rate for acquiring contacts to potential customers
CPA (Cost Per Action) – a fixed rate for any action: subscribing to the newsletter, registering on the website, completing the survey, etc.
CPO (Cost Per Order) – a fixed rate for placing an order in the online store
Hybrid model: e.g., CPC + CPO, CPC + CPL and others – combinations of all efficiency models with the Cost Per Click model (payment for a unique click on the ad)
Performance marketing – advertising forms
There are no restrictions on advertising forms when you get paid for effectiveness. Each promotional campaign, regardless of the advertising method, may be accounted for its effects. The measure of campaign success in efficiency models is the conversion rate (i.e., the ratio of actions performed to the number of clicks on the advertising medium). This allows you to find out how many of clients have completed the activities expected by the sender. In order to be able to provide specific data containing the conversion rate, the condition is connecting the traffic tracking system and the generated actions from this traffic.
After attaching the tracking codes to any advertising media, each campaign and promotional activity can be billed for specific effects:
- banner campaigns
- entries on blogs and other websites containing affiliate links
- campaigns in social media: Facebook, Instagram, YouTube
- integrating the offer with product search engines or price comparison engines
- offer on discount websites
- and any other activity that can be measured with the tracking codes
Performance marketing – become an advertiser in the affiliate network
The best option for the advertiser is to use as many tools as possible and only account for the effects. So, it is best to work with as many different affiliate publishers as possible in the performance model. Thanks to this the advertiser will not only increase sales, but also brand recognition. The fastest way to achieve this is to join an affiliate network. The network allows access to a wide database of publishers and a variety of tools to support performance marketing activities.
The affiliate network ensures the achievement of sales growth thanks to a wide base of publishers who are willing to act in efficiency models. Thanks to affiliation, the advertiser has a chance to act effectively through cooperation with selected publishers offering various forms of advertising. The advertiser’s offer appears on hundreds of websites at the same time. The advertiser does not have to independently acquire publishers for cooperation, which is one of the greatest advantages of working with an affiliate network.
In the world, performance marketing is consciously used and developed. In Poland, it still has untapped potential, although there is a growing awareness of marketers, companies and publishers who want to see concrete results and care about being effective.
Performance marketing – if you want to know more about affiliate programs
Affiliate programs are part of affiliate marketing, which is accounted for only for results. As the name itself suggests, they are created to enable various entities to cooperate with each other. In effect, it generates profits for each party involved. There are three entities involved in this type of solution: publisher, advertiser and affiliate network.