The digital era has opened up a whole range of new practices to the marketing landscape. Knowing what type of marketing strategies you can do that fit your purpose and goals is crucial to propelling your business forward. With the right tactics, you can reach the right audience, establish and build brand awareness, and influence consumer behavior.
Apart from paid advertising, content marketing, and SEO, there's a marketing discipline called performance marketing. It's revolutionizing how it impacts the way brands promote and sell their products and services. Here's a breakdown of what it is and how it works.
What is Performance Marketing and How Does It Work?
Performance marketing is a type of online marketing where businesses or brands work with and only pay marketing companies when their business goals are met or when specific actions are accomplished, like a click, sale, or lead.
As the name implies, it's marketing based on performance. You may not know it then, but you've probably encountered a performance marketing campaign while browsing websites or social media apps.
What makes performance marketing different from other disciplines is that it's not restricted to one marketing channel. Plus, it gives the advertisers the power since they specify which actions they want their target market to take and how much they're willing to pay for every fulfilled action. This allows them to spend their marketing budget only on successful campaigns.
To execute a successful performance marketing campaign, the four groups involved in the project must work together.
Retailers or Merchants: These are the companies that sell goods and services, looking to promote them to achieve specific goals, such as generating sales and leads, with the help of affiliate partners.
Publishers or Affiliates: These are the companies that operate media channels and advertise or promote digital ads, such as websites, blogs, or social media accounts. They use various online strategies to promote brands and their products or services.
Networks and Platforms: These third-party platforms connect brands and publishers. They offer resources and tools, including campaign performance tracking and payment management, as a means to keep brands and publishers in the same boat when it comes to monitoring and tracking metrics.
Outsourced Program Managers (OPM): These agencies provide full-time performance marketing services for brands that don't have their own team to execute it in-house.
Different Channels Used for Performance Marketing
Native advertising
This is a type of paid ads media designed to blend well wherever it's published. They don't appear like ads, unlike display ads and banner ads. For instance, if the user reads a blog post, native ads follow the natural form of the page and appear contextually relevant to the content.
Performance marketers use this tactic mostly for retargeting opportunities to capture users and encourage them to perform a specific action.
Sponsored content
Sponsored content involves working with prominent names in an industry, like influencers, content creators, and known personalities, depending on the platform. Performance marketers will ask them to publish an article, video, or image advertising the brand's products and services in exchange for a payment.
The compensation can be free products, services, experiences, and a cost-per-click, cost-per-mile, or cost-per-action-based payout.
Social media marketing
Facebook, Instagram, Twitter, Pinterest, LinkedIn, and TikTok use these platforms for performance marketing campaigns involving influencer marketing or paid advertising tactics. You have to determine where most of your target audience is to determine which channel would best work for your campaign. The metrics commonly tracked for social media marketing include likes, shares, comments, and sales.
Summing It Up
Now more than ever, brands can collect, process, and analyze consumer data and metrics to help reveal their behavioral patterns, such as whenever they read an article, like a social media post, or buy a product. Such market research is deemed essential for businesses. If you're looking for a strategy that helps build your brand, boost product and service awareness, and allows a pay-as-you-go approach, performance marketing is an excellent solution.