Performance marketing – A detailed guide | Pay only for what you get


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Performance marketing – A detailed guide | Pay only for what you get

Why pay for marketing campaigns that didn’t even deliver the desired results? Consider paying only for successful campaigns with performance marketing. It is a popular subset of digital marketing where the advertiser pays only for achieved results.


When we talk about digital marketing solutions, what is the first thing we expect from them? Results right! But sometimes, you don’t get the expected results, face marketing failures, and pay for campaigns that didn’t deliver the desired results.


To be free from such methods, why not consider paying only for successful campaigns? Yes, it is possible if you have the correct performance marketing strategy.


What is performance based marketing?

People often search for performance marketing meaning while looking for ways that drive good marketing results. It is a popular subset of digital marketing that is caused by impacts. In simple terms, whenever a company pays for its digital marketing efforts for every goal completed, it is called performance marketing. The activities are related to anything that can be measured in a marketing campaign—for example, sign-ups, clicks, downloads, purchases, etc. Unlike any traditional paid marketing technique where a brand delivers for every campaign, performance marketing involves payment of only the successful ones.


How do performance marketing methods work?

In paid advertising, advertisers connect with popular agencies or publishers to publish their company’s advertisements on multiple performance marketing channels like search engines, web content, social media, videos, etc. Instead of paying for every campaign, advertisers pay only for the successfully delivered goals. There are multiple ways to pay as you check your marketing performance. Below is a list of some popular ones.

  • Cost per click (CPC) – An excellent strategy to drive traffic to your site. Here, advertisers pay as per the number of times their ad is clicked.
  • Cost per impression (CPM) – It lets you pay for every thousand views to your ad.
  • Cost per sales (CPS) – CPS lets you pay when you make a sale, driven by your ad. CPS also works in other types of marketing, like affiliate marketing.
  • Cost per leads (CPL) – CPL is much like CPS. It allows advertisers to pay when someone signs up for an email newsletter, webinar, or anything else. It helps generate leads which can let you drive sales.
  • Cost per acquisition (CPA) – CPA is similar to CPS and CPL. Here the advertisers pay only when the consumer completes a specific action like visiting your blog, making a sale, sharing their contact information, etc.


Pros of performance based advertising

Many digital marketing tools have proved extraordinarily beneficial for businesses to make a prominent name in their industry. Out of which, brand performance marketing has taken over the entire paid marketing scenario. Below are four significant ways to show how result-based marketing benefits businesses and marketers.

  • Measurability – Marketers can effectively measure their campaign success and optimize their strategies accordingly. Business owners can interpret the actual data and identify their focus of marketing efforts,
  • Core insights – While analyzing the benefits of digital marketing, one should know that a good performance marketing agency like SkyTrust IT Solutions can let you provide a comprehensive view of your marketing strategies. A more significant amount of data availability increases the chances of long-term growth and accuracy.
  • Less risk – Only a good performance marketing consultant knows how to best use data gathered from marketing campaigns. Accurate data allows us to make sensible and profitable future decisions and strategies that reduce the probability of financial risks.
  • Transparency is the key – Being a leading social media marketing and website marketing agency, the SkyTrust team knows the importance of transparency for a marketer or a business owner during performance marketing. As a marketer, transparency in your objectives and actions lets you easily meet client expectations. If you are a business owner, transparent payment terms are beneficial when making transactions.


Cons of performance based marketing

Although performance marketing advertising is a great social media marketing strategy, as it is said, every positive aspect has a downside too. Similarly, this result-based marketing also has some disadvantages, which might affect your growth strategies if not dealt with efficiently. Below are some common cons that every performance marketing manager might face.

  • Fewer chances of long-term profitability – Performance marketing allows advertisers to experience accomplished short-term goals at a fast pace and higher ROI. But this might affect your long-term business profitability if not dealt with strategically.
  • Risk of ad fraud Whenever talking about the importance of digital marketing, performance marketing holds one of the primary places there. But it might often lead to questionable practices, which may increase the chances of ad fraud. Companies might use unethical practices of performing ad clicks with bots and generate false impressions. It can hamper your marketing efforts and make you pay for fraudulent clicks.
  • Delayed results lead to monetary wastage – Performance marketing definition says that the digital marketing agency has to pay only for the successful results. But sometimes, these results get delayed, hampering the entire marketing strategy. Paying for successful but delayed results is similar to wasting money.


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