WHAT IS PERFORMANCE MARKETING?

Performance marketing is a digital marketing strategy that’s driven by results. It’s ideal for companies that are looking to reach their audience at scale, because payment is based on how users interact with the content.

Performance marketing refers to a form of digital marketing in which brands only pay marketing service providers after their business objectives have been met or when specific actions have been taken, such as a click, sale, or lead.

Performance marketing works when advertisers connect with either agencies or publishers to design and place advertisements for their company on any number of performance marketing channels —

social media, search engines, videos, embedded web content, and more. Instead of paying for an advertisement in the traditional way, these advertisers pay based on how well their ad performs, by measuring number of clicks, impressions, shares, or sales. 

In other words, it is performance-based marketing.

businessman, consulting, business-3189802.jpg

How Performance Marketing Works?

Advertisers put their ads on a given channel and then pay based on how that ad performs. There are a few different ways to pay when it comes to performance marketing: 

1. Cost Per Click (CPC)

Advertisers pay based on the number of times their ad is clicked on. This is a good way to drive traffic to your site. 

2. Cost Per Impression (CPM)

Impressions are essentially views of your ad. With CPM, you pay for every thousand views (so if 25,000 people view your ad, for example, you’d pay your base rate times 25). 

3. Cost Per Sales (CPS)

With CPS, you only pay when you make a sale that was driven by an ad. This system is also commonly used in affiliate marketing

4. Cost Per Leads (CPL)

Much like cost per sale, with CPL you pay when someone signs up for something, like an email newsletter or webinar. CPL generates leads, so you can follow up with customers and drive sales.  

5. Cost Per Acquisition (CPA)

Cost per acquisition is similar to CPL and CPS but is more general. With this structure, advertisers pay when consumers complete a specific action (which could include making a sale, sharing their contact information, visiting your blog, etc.).

Shopping Cart