Today I would like to present Melissa Crossman to you. She has written a guest post about performance marketing. I would love to hear your thoughts about performance marketing. Let’s discuss it in the comments…
According to Forrester Research, online shoppers in the United States will spend approximately $327 billion in 2016, which amounts to an increase of 45 percent from the $226 billion spent this year and a 62 percent increase from the $202 billion spent in 2011. Based on this data, it’s clear that customers are devoting more of their attention to shopping online than ever before, and they aren’t showing signs of stopping any time soon.
Because customers are continuing to use the Web for everything from shopping to socializing, many businesses are exemplifying the axiom “be where the customer is” in their marketing campaigns. Online marketing has become much more sophisticated now than it has been in the past, and all companies should be aware of the many new options they have to choose from for a successful campaign.
What is Performance Marketing?
Taking a revolutionary approach to advertising online, performance marketing strays from traditional methods by operating on a mutually beneficial business model. As its name implies, the technique focuses on performance, and businesses only pay for services that truly deliver results when they choose this method. This marketing technique tends to be more successful than traditional alternatives because it offers a greater incentive for advertisers to deliver an effective campaign, since they will equally benefit from the results. The “performance” of the campaign is determined by a number of different factors, including impressions, clicks, deposits, revenue, registrations, turnover or any combination of these actions.
Contrary to popular belief, performance marketing and affiliate marketing are not one and the same. Actually, performance marketing has a clear focus on results, while affiliate marketing determines a successful marketing campaign in a number of different ways. So, it can be said that performance marketing is a sub-strategy of affiliate marketing, but the latter encompasses a much broader realm of advertising techniques.
Types of Performance Marketing
There are several sub-strategies within performance marketing itself that allow businesses to more effectively match their needs with a campaign that delivers guaranteed results. One of these strategies is known as cost per acquisition (CPA), which is one of the broader techniques that maintain businesses will only have to pay for campaigns that drive customers to action. The exact “action” in question will depend on the client’s personal preference, but can include anything from a sale to signing up for an email subscription. Since this device offers more flexibility, it’s an excellent choice for companies searching for a result that may not be as orthodox.
Cost per lead is another method of performance marketing that strives toward an ultimate goal of convincing customers to sign up either for a newsletter, email subscription, phone list or other marketing tactic within the company that improves the likelihood of a sale. This option is typically a good choice for businesses whose product or service is in a higher price range– such as car dealerships and resort hotels– since customers will spend a longer time researching and weighing their options with these purchases.
Cost per click is another popular method of performance marketing where clients only pay the advertiser for ads that are clicked through by visitors. These click-through rates are often used as indicators of success because they prove that an impression was made, while generating greater interest in the company. Since this choice is much easier to cap at a set price, it would be a good selection for businesses on a budget.
Accommodating Modern Consumers
Because consumers are changing the way they interact with brands, businesses must evolve their advertising campaigns accordingly to accommodate the changing lifestyle and preferences of potential customers. With the incredible efficiency of performance marketing techniques, businesses can make a wiser investment in advertising that comes without risk. When you know your money will only go toward results, there truly is no better deal.
Melissa Crossman lives in Indianapolis with her two dogs.