In today’s competitive world, it’s important for brands to create successful digital marketing campaigns that bring in desired results for the company.
However, with every organization fighting to make an impact in the same space, digital marketing can become a very expensive game.
While some big brands can afford to spend millions to dominate the digital ecosystem, smaller brands struggle to afford the digital advertising and marketing campaigns that work.
That’s where performance marketing comes in.
Performance marketing can help brands get the most out of their digital marketing campaigns by helping them take control of their budgets and only pay for results.
In this article, we’ll look deeper into performance marketing, how it differs from traditional digital marketing, different types of performance marketing, and the benefits it brings to small businesses.
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What is Performance Marketing and How Does it Work?
Is there anything worse than spending a significant amount of money but not getting anything back on it?
For years, this has been a danger associated with digital marketing campaigns. You research your keywords, put in the time and effort, but after the campaign runs you don’t get the leads or conversions you were looking for.
In performance marketing, you only pay for the results you get back from paid marketing or advertising.
You get to determine what success looks like for your brand, whether it’s a new lead, a click on an ad, or a sale with your business. After the determined action has been taken, you then pay for the advertisement or campaign.
For example, if you set up a digital ad you don’t pay a flat fee up front, but instead pay for every click that the advertisement has.
That way you know exactly how your budget is spent and can rest assured that you don’t pay for results you’ll never see.
What is the Difference Between Performance Marketing and Digital Marketing?
Digital marketing and performance marketing go hand in hand. You might even say that performance marketing is a subset of digital marketing.
However, in traditional digital marketing, you might still end up paying for campaigns that don’t produce results.
Performance marketing ensures that you only pay once your predetermined result has been achieved.
What is the Role of Performance Marketing?
Performance marketing is designed to drive growth within a brand.
The methods in performance marketing are able to help companies and partners get clear, direct, and easily understood demonstrations of their investments in different campaigns.
You can get a clear picture of how every dollar in your efforts is spent, which leads to less waste overall.
It also allows you to take advantage of different partnerships and associations with other marketing companies, agencies, and channels in order to make sure that you are leveraging your resources in the best possible way.
It allows you to expand your scale and distribution while building and strengthening these mutually beneficial relationships.
This allows performance marketing to have a unique role within your other digital marketing efforts and helps you connect to more people using more channels with a wider range of resources.
What are Performance Marketing Channels?
There are many different channels that you can use in performance marketing, depending on who you are partnering with and what your goals are.
Those could include Google for advertising and even your own website if you’ve optimized it for performance marketing.
However, the most effective channels tend to be social media based.
The most common channel for performance marketing is social media.
These sites and platforms are powerful tools with large audiences.
Many times they will also have built-in tools for advertising and creating sponsored posts, allowing you to format things and create campaigns easily.
You can also get metrics to support your efforts directly from the platform.
Some of the best platforms for your ads include:
Is SEO Part of Performance Marketing?
While SEO plays a role in every marketing campaign to some extent, it’s not as important when you are building out performance marketing campaigns.
That’s because performance marketing is so hyper-focused on results and SEO tends to be more gradual and less quantitative in nature.
There isn’t enough visibility in getting more organic results through SEO to be relevant to performance marketing.
Instead, performance-based mindsets and campaigns tend to focus on paid results and advertising.
Examples of Performance Marketing
Performance marketing is an umbrella term that can cover many other different types of marketing.
Here are a few different examples of performance marketing in action and how they can help to benefit your strategies.
LinkedIn is a great platform to use when you are creating performance marketing content like native ads and sponsored posts.
Brands like Upwork use LinkedIn in order to achieve their performance marketing goals and create campaigns.
LinkedIn sponsored or promoted posts are designed to blend into the scrolling feed users see when using the site.
That allows the sponsored posts to avoid sticking out like some other types of ads do, and, as a result, they get more reads and clicks.
VAVAVOOM, a fashion retailer, used performance marketing to boost their interactions and increase their brand reputation.
They used YouTube video ads and an agency partner to help get more viewers on their channel and increase their return on investment in the campaign while exceeding their initial goals.
This fitness training program brand was able to use native advertising in the form of videos to leverage performance marketing success.
With an agency partnership, One&Done created native videos that blended seamlessly into the platform they were displayed on with a focus on the CTA to increase conversions. This strategy had amazing results and increased the number of subscribers to the brand.
What are the Types of Performance Marketing?
Performance marketing has many different types and channels through which it can be achieved, some more useful to your brand than others.
Here are some of the most common ways you’ll find performance marketing in action.
Banner (Display) Ads
Display ads, also known as banner ads, are advertisements that a visitor will see on the top, sides, or bottom of web pages on the websites they frequent.
Usually display ads focus heavily on an image or video with some supporting text and taglines to drive home a message.
These ads, however, aren’t as commonly clicked as other types of ads.
That means that applying performance marketing to your banner ads is a great way to avoid overpaying with no results.
You can target the specific sites you think your audiences will visit the most and only pay when someone takes the desired action on the ad, like clicking or converting on the landing page.
Native advertising is often thought of as an opposite approach to display ads.
While a display ad is clearly an advertisement and stands out from the regular content on the page, a native advertisement tries to blend into the environment and almost appears as though it isn’t an ad at all.
Native ads can also be created with a predetermined outcome in mind, so that you can use performance marketing to ensure that you only pay for your native ads when they get you a result.
Performance marketing can also be used in content marketing, specifically in sponsored content.
You’ll partner with an affiliate like an influencer or other content site, and they will have a dedicated post, article, or promotion for your brand.
You would then pay the affiliate after you see the results of your advertisement.
Social media advertising helps you achieve brand recognition and increase your visibility by placing ads in the feeds of those who are not your followers.
By predetermining the demographics you want to target in your audience, your ads have specific groups they will appear for.
These ads are often structured in a model where you only pay after a click on the ad.
Search Engine Marketing (SEM)
Search engine marketing, often referred to as SEM for short, ads will appear when a user types a specific term or phrase into a search engine.
These types of advertisements will appear at the top of the search engine results page before non-advertisement links.
These ads are typically set up as a pay-per-click or PPC ad model, which fits right into performance marketing.
What are the Benefits of Performance Marketing?
Performance marketing has incredible benefits for small brands and businesses that want to take back control of their advertising and marketing budgets.
Let’s take a look at a few of the major benefits of performance marketing that can positively impact your brand’s initiatives.
The biggest benefit of performance marketing is the clear budget-friendly setup.
Rather than paying a flat rate without any guarantee of success, you instead pay when you receive the results you are looking for.
This helps brands of all sizes take control of their budgets and avoid overpaying for campaigns and ads that don’t bring in results.
This not only helps things be more cost-effective, but it also helps digital programs receive support from management and leadership in the organization.
Easy Performance Tracking
Performance marketing helps you easily track the performance of your ads.
Because you only pay for a specific result like a click or a lead, you know exactly how many of each you get out of every campaign.
You Can Establish Your Goals
Performance marketing also allows you to pick your own goals for success.
You get to decide if you want to focus on establishing new leads, getting clicks on ads, or even closing more sales.
This helps you plan out each step of your campaign and create a strategy that fits the goals you want to see.
Allow You to Determine the Formats of Advertising
As with the other benefits, performance marketing is all about taking back control of your budgets, your advertisements, and ultimately your digital marketing strategies.
That means that you get to determine the exact formatting and channels of advertising you want to utilize.
You can pass up on channels that won’t give you back what you are looking for or don’t follow a performance marketing model.
How Do You Leverage Performance Marketing?
Now that you understand what performance marketing is and why it’s important for your brand to invest in, let’s take a deeper look at ways you can leverage performance marketing to get the most out of your efforts and apply it to your digital marketing strategies.
1. Focus on a Good Landing Page
If you want your goal to be focused on conversions, or want the clicks to get to convert into usable leads for your brand, you need to have a great landing page.
A landing page is the page that an advertisement will lead to with more details about your offer and a chance to receive it.
Landing pages often have forms that need to be filled in to be converted to the next stage.
They need to be informative and compelling. After all, you want your offer to be worth enough that a lead will happily give you their information in exchange.
You want the user experience to be seamless and helpful for your audiences.
2. Promote Your Brand in the Right Channels
Picking the right channels is important in performance marketing.
While you don’t want to pay without getting results, you also need those results to be successful.
Find the channels that your audiences spend the most time on and where you’ve seen success in the past.
3. Perform A/B Tests
A/B tests help your brand determine which formats or messaging resonates best with your audiences.
Testing is key to success in performance marketing, as you need your ads to be compelling to your audiences.
Performance marketing helps brands avoid overspending on their digital marketing campaigns and ensures that they only need to pay for the results they receive.
This helps brands take back control of their budget and find success in their digital marketing initiatives.
There are many factors involved in creating a great marketing budget.
If you are a digital marketer who wants to find success in your budgeting techniques, click the link to check out our marketing control budget kit, a free resource to help you accurately create a marketing budget!