What is Performance Marketing? Types, Benefits, & Top Strategies

One of the biggest strategies businesses use to grow themselves is Digital Marketing. It has now become a proper umbrella term. That’s the reason why many people overlook its types. Performance Marketing is one of them.

It is a Digital Marketing strategy that is a blend of paid advertising and brand marketing. In this strategy, the business pays the marketer only for received results. This makes it efficient and budget-friendly.

This article is going to cover this topic in detail. We will discuss what is Performance Marketing along with the benefits it offers.

Put simply, Performance Marketing is a strategy where marketers get paid according to the results it provides to the business. You can call it a performance-based marketing. Experts work on different aspects of digital marketing of a brand. Once they achieve a specific goal or result, they get paid accordingly.

These results can be different according to the applied strategy. It might be a lead, a sale, or a click, for instance. This term is frequently confused with Affiliate Marketing. But they are different. Actually, Affiliate Marketing is a subset of this strategy.

This strategy is very effective. That is because marketers put their complete focus and energy into the work. They’re only going to get benefitted if they deliver results. On the other hand, the companies only pay for what they receive in return.

The functional process of this strategy is very simple to understand.

Business analysis:

First, a business hires a marketer. It can be a company or an individual. After that, the marketer starts the business analysis. This includes analyzing its current standing.

Goal setting:

After the analysis, both of them set a specific goal the company would like to achieve. It can be receiving clicks, getting leads, etc. They also set a price rate accordingly.

Strategy application:

Now, the marketer starts applying the required strategies to market the brand. Relevant marketing types and channels are used here.

Results measurement:

In the end, they both measure the received results. The company pays the marketer their decided rate if the results are according to their requirements.

This is a basic model of how this all works. It’s important to understand that the process can be tailored according to the business nature.

There are several types of Performance Marketing. Some of the top ones are listed below:

Social Media Advertising:

Billions of people have access to social media. This makes it an ideal channel for Performance Marketing. Marketers run different types of ads on it. They are targeted to a specific audience. The main goal can be to engage the users with the ads. The business pays according to the received engagement and clicks.

Affiliate Marketing:

This is a collaborative type of Performance Marketing. You hire a marketer or an influencer in it. They partner with your brand to sell the products. After that, they advertise it on different channels. They earn a definite amount of commission on each sale they make.

Search Engine Marketing:

Search engines are also being widely used for this marketing. That is because most people use them to look for a product or brand. The strategies involved in it include SEO and Pay-Per-Click.

The goal of SEO can either be ranking the site in top results or bringing a certain amount of traffic to the site. Pay-per-click is rather simple. Money is paid only for the clicks you get on an ad.

Display Ads:

These are banner ads that are displayed on different relevant websites. The goal stays the same. The marketer has to get the required number of clicks in order to get paid.

Content Marketing:

This is a very uncommon type of Performance Marketing. That is because measuring results is a little complicated in it. Its basic purpose is to share valuable content with the audience. So, the required result may be the engagement of the audience with the brand. Marketers may also try to increase brand awareness through it.

Besides knowing what performance marketing is, understanding its benefits is also important. There are several of them.

• It is a good way to measure your Return on Investment. Traditional advertising doesn’t offer this luxury.
• Your brand gets to reach the right target audience. Marketers focus on a specific type of people in order to get the required results.
• It’s a much more cost-effective strategy compared to normal marketing.
• It is a very flexible and scalable strategy. This means that you can mold the campaigns according to your needs.

Here are some top strategies you can utilize for this marketing type:

• Make sure to personalize your content. This will help you get more engagement and clicks.
• Use influencers to directly sell your products. In this way, you only pay for the sold goods.
• Focus on getting clicks and sales rather than brand building. That is because these things are very easily measurable.
• Although this strategy is scalable, having a proper plan can be useful.
• Try to hire experienced marketers. This will help you get the results much quicker.
• Keep tracking the progress continuously. This can be helpful in pulling the stop button when you have reached the target. In this way, you can avoid spending extra money.

Brands are using Performance Marketing to increase their engagement and sales. It is a strategy where you only pay for the results. They can be in the form of clicks or sales. The term is a little hard to understand for several people. That’s why we have discussed what is Performance Marketing in detail in the information given above.

This strategy has different types. Each of them is suitable for different types of businesses. Since it is a results-driven approach, it offers a lot of benefits. There are some useful strategies that you can use to apply this approach properly. We’ve listed them above as well.