Importance of Performance Marketing


In the fierce market, proper marketing of your business has become more important than ever. The marketing strategies can be expensive, and their return is also not fixed. However, performance-based marketing is one such effective way that requires the advertiser to invest less on marketing and ensure that there is a positive return on investment.

Performance marketing is term is used to represents to the online marketing and program in which the promoter such as merchants, retailers, etc. and the marketing organizations such as publishers, affiliates, etc. are paid when a particular action is executed like lead, sale, or click.



Performance-based marketing is basically an amalgamation of innovation and advertising that helps the advertiser and to grow the business into broader ways.

Types of performance marketing


  1. Cost per Thousand (CPM):

When an advertiser buys advertising space on the basis CPM, he/she has to pay a certain amount of money per 1,000  views of their ad. An advertiser gets views when their advertisement is displayed on the web page.



  1. Cost per Click (CPC):

If the advertisers go for cost per click or CPC advertisement, they would have a better chance of optimizing their conversion rates and sales as compared to the CPM methodology. In CPC advertisers get paid only when the visitor clicks their ads. The calculation of an advertiser’s CPC rate differs from platform to platform.


  1. Cost per Lead (CPL):

Cost per Lead or CPL is the next level performance marketing. With CPL, the visitor doesn’t just click on the advertiser’s ad for them to get paid. The prospect has to take a further step for the advertisers to get paid. This might include filling the contact form, signing up for the email list, etc.



  1. Cost per Acquisition (CPA):

This is one of the most expensive performances marketing ways. In this, the advertisers only get paid for their ads when the visitor actually makes a purchase from their ads. Whether it is a product or service, they don’t get paid until the deal is sealed.



When do the advertisers use performance marketing?

The advertiser used digital performance marketing for the following reasons:

  1.  When the advertiser aim at driving action rather than driving awareness
  2.  When they want to measure the result of their advertisement
  3.  When they want to optimize their advertisement in real-time as per the measurement.


What makes performance based advertisement stand out from other advertisement methodology?

  • Contrary to the conventional marketing forms where payment is made up front without the assurance that the advertisement will be successful. Marketing performance, on the other hand, only lets the advertiser pay for the successful transaction.
  • Performance marketing has managed to successfully overturn the conventional advertisement proposition and also allow fast measurement of return on investment (ROI). This is especially great advertisement technique for small business owners who fail to promote their business because of the high marketing cost and worry about the positive return.


What are the companies that utilize performance marketing?

  • Performance marketing strategies are used by the companies that need the internet to drive customer towards their website. The companies can range from fashion retailer to insurance company to car dealership to all those sellers who are looking for customers online.
  • At the same time, performance-based marketing is quite popular among the small business organizations that have a limited budget. By investing in cost per action (CPA), this organization can be sure that every ad would result in an effective return on investment.
  • Along with generating a unique and valuable proposition for the advertiser, performance marketing is on the progression of mobile applications, content development, niche marketing, and social media.


How one can measure the return on investment (ROI)?

  • Performance based digital marketing is measurable and trackable through the clocks. Advertisers are able to measure everything from the acquisition cost to incrementality.
  • Traditionally, marketers used domain advertisement just like ones that you have on the right side of Facebook. But, Facebook has various formats of ad that helps in getting better results.



  • The most common place to advertise is a news feed. When you place your ads in the news feed section, it will get you 8 times the engagement on the page. It is recommended use Facebook link post advertisements along with conversion pixels to attract the traffic and also measure cost per action (CPA) or cost per sale (CPS) of each advertisement.

When it comes to performance marketing, the advertiser pays for only the transaction that has been successful completed. Each transaction is defined by the consumer’s action like signing up for subscription or making a purchase. Rather than blindly spending money on the immeasurable campaign, invest in performance marketing in which you are able to track every click.


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