Performance marketing has been storming the marketing industry and communities for the past few years, which drove the interest towards that approach in a rebellious gesture.
The approach has changed the way companies advertise and promote what they sell, and it also has changed the way we examine the measurements of the success of any marketing campaign, from nearly impossible determining the ascriptions to the ability to measure EVERYTHING from the reach to conversion rates.
In this article, we’re going to explore why performance marketing is such a hit to every marketer and business out there.
Isn’t it marketing based on performance?
In principle, performance marketing is putting power back in the hands of the advertisers, Because it’s a data-driven marketing model that aids advertisers to collect valuable insights into their performance which assists them to improve their campaigns according to the best cost (whether its Cost Per Acquisition, Sale, Lead or Click).
That said, the Business Insider’s 2016 report stated that nearly three-quarters (74%) of shoppers in the US click on more than 3 to 4 websites before continuing to explore or shop in the intended site. This statistic shaped a massive endorsement on how effective the performance model is and how a lot of huge numbers from what we see in the global ecosystem resulted from applying it.
Evolution of Performance Marketing
But isn’t that the same as digital marketing and affiliate marketing?
Digital marketing includes all channels and efforts that affect business leverage. And according to the anatomy of digital marketing, performance marketing is a model that falls under its umbrella since 1993 when the first Web ad banner was launched.
In spite of that, Digital and performance marketing aren’t the same on many levels.
- When it comes to Payment
In traditional digital marketing, the procedures include CPC and CPM standards which aren’t efficient because your company will have to pay for results in advance starting from salaries to operations.
In performance marketing, especially affiliate, it’s the opposite. It’s a free-risk model that makes you pay only when you receive the action or generate sales.
- When it comes to fixed costs per actions
In traditional digital marketing, it’s challenging and almost impossible, to expect the fixed cost per new customer on a daily basis.
In performance marketing, the affiliate and performance marketing’s base is situated on expecting the fixed cost per new customer daily.
- When it comes to Hyper localize your campaign.
In performance marketing that is a big advantage, as hyperlocal marketing focuses on limiting the targeting of the ads to highly specific geographical areas, further you can track keywords and set a hyper-social marketing campaign using Google Ads.
This will generate free awareness and reach which isn’t available in traditional digital marketing.
Back to affiliate marketing. When it comes to affiliate marketing, it originated before performance marketing, and despite that, performance marketing includes it and much more as a model.
Affiliate marketing in itself might not guarantee the Consumer will buy what you’re selling. But the latest technologies and digital marketing strategies allowed taking a closer step towards completing priority action. And now affiliate marketing has evolved to the extent when sometimes you pay the affiliate only for sale or download. Accordingly, performance marketing goes far beyond the affiliate model.