Performance Marketing: What is it, and why should you be doing it?
Marketing proves to be one of the most impactful business services. The ability to engage publics to market services, products, or any other initiatives is crucial to a business’ viability. In order to remain successful, new marketing efforts are being developed to fully maximize success while remaining financially responsible. One way this is being accomplished is through performance marketing. So what exactly is performance marketing, and why should you be doing it?
What it is:
Simply put, performance marketing is a branch of digital marketing where brands will only pay marketing servers after their objectives have been met. This practice is used to drive actions, track and measure those actions, and analyze the results of them. Success is often measured by collected data on either clicks, activity, purchases, page views, comments, etc. A defining point of performance marketing is the emphasis on ROI, return of investment. By tracking activity, one can evaluate the efficiency of the investment. The more data that is collected, whether it be CPM, CPA, CPC, or LTC, the deeper the insights will be. These insights are all used to calculate the ROI, and the success of the marketing efforts. Overall, it places emphasis on the performance of the marketing efforts.
How it is different:
Traditionally, fees are paid upfront for marketing services regardless of outcomes. Because of this, there are times when up to thousands of dollars are spent on services in return for a poor ROI. This strategy allows for payment to come after the data determines the desired outcome was achieved. It allows for money to be well spent, not wasted.
The access to data in today's age has also contributed to the success of performance marketing. Data transparency now allows marketers to optimize their campaigns to reach their full potential. Even just 10 years ago, we didn't have access to the data we have today- so we might as well use it to our marketing advantages!
Why you should be doing it:
Performance-based marketing places the power back in the hands of the advertiser. The advertiser is able to set their desired outcome, and only pay when that action has been met. This allows businesses to appropriately exercise their budget in ways that will be beneficial. In short, you’re only paying for what you want, a concept we can all get behind!
In summary, performance marketing is both beneficial to the marketer as well as the customer paying for marketing services. The marketer is able to tailor their efforts to reach a desired end goal, and the customer is setting appropriate goals and staying financially responsible.
At this point in time you have read in depth about the ins and outs of performance marketing. Now’s the time to put it to use.