Technology has forever changed the way businesses interact with consumers. We’ve seen a gradual uptick in eCommerce marketing as online sellers adapt how they advertise and sell their products and services. US eCommerce revenue increased by 7% between 2021 and 2022.
This gives marketers an arsenal of tools and resources to gather data about their target audience. This type of transparency helps them come up with data-driven marketing techniques.
Once this data yields the results needed, advertisers pay a search marketing specialist. This is the beginning of performance marketing. Today, very few marketing strategies are as fruitful as performance marketing. This guide will familiarise you with the basics of performance marketing.
The topics we cover include:
- What is performance marketing?
- How does it work?
- Channels used for performance marketing
- Why you should invest in performance marketing
What Is Performance Marketing?
Performance marketing defines online marketing campaigns where advertisers pay a search marketing specialist money only after their desired lead generation or conversion results have been achieved.
The rate of the results counted as success is already determined by the business beforehand. Thus, the name “performance marketing” is based on marketing performance.
Another thing to note is that performance marketing is an umbrella term that refers to digital marketing techniques and advertising programs.
Simply put, performance marketing is a marketing technique that heavily emphasises customer acquisition, engagement, reach, and conversion. Furthermore, this marketing strategy allows campaigns to be targeted to ensure a high ROI.
How Does Performance Marketing Work?
Unlike other marketing strategies, when you conduct performance marketing, your company only pays for the results you get from paid marketing or advertising.
After marketing efforts have taken place, you then pay for the advertisement or campaign. This means that you get to determine what success looks like for your brand. This could be a new lead, sale, or click on an ad.
This way, you know exactly how your budget is spent and can ensure you only pay for the results you’ll see.
Channels Used For Performance Marketing
You can leverage different types of channels when it comes to performance marketing. The merchants can use such channels in their performance marketing strategy depending on their business goals.
Below are a few channels used for performance marketing:
- Social media marketing: If you want to do performance marketing with these social media platforms, you must choose between influencer marketing or paid advertisement. Currently, the size of the social media market is estimated to be worth 72.2 billion. This makes it a highly profitable channel to invest in
- Native advertising: This channel is ideal for usage during retargeted marketing as it can provide helpful information on what attracts clients to take action
- Sponsored content: This channel involves working with influencers. These people publish an article advertising your brand in exchange for payment.
- Affiliate marketing: It includes strategies like email marketing, SEM, influencer marketing, and more. Over 80% of brands have affiliate programs which means it’s something you should look into! This is where the marketing partner exchanges sales or desired actions in return for commissions.
- Search engine marketing: When discussing SEM, you must consider PPC or paid advertising. This is the most popular type of channel, with the number of advertisers using PPC surpassing 7 million. If your company relies on SEM, it works with SEO keywords and Google algorithms to rank in SERPs.
Why Should You Invest In Performance Marketing
Digital marketing is a highly dynamic industry that’s been making massive strides. As a result, performance marketing has immense potential for scaling. Below are some reasons to jump on the performance marketing bandwagon today.
Budget-friendly
The most significant upside to performance marketing is its very budget-friendly setup. Instead of having to pay a flat rate regardless of the quality of results, you only pay when you receive the results you’re looking for.
What this does is that it enables any business to take charge of its budget while avoiding the trap of overpaying for redundant leads. This way, you are adopting a cost-effective alternative.
Traceable Performance
Another significant advantage of performance marketing is that search engine marketers find it easier to measure and trace. Moreover, as a business, you can see the entire click-to-consume rate of each visitor turned buyer. This gives you a good idea of what areas to amend and invest in and which partners and channels yield better results.
Allows You To Determine The Formats Of Advertising
As we already know, performance marketing gives you much control over your budget, marketing strategies, and ads.
This also means that you get to determine the exact format and channel of advertising you want to work with. Performance marketing also gives you the autonomy to pass up on channels you don’t think will work for your strategy.
Getting Exposure To New And Hard-to-Reach Audiences
Working with performance marketing means you’ll be able to gain exposure to hard-to-reach audiences, which would be more diversified.
Moreover, since performance marketing uses several channels and comes in different formats, it also allows you to reach more markets. Thus, you will see more operating incomes, as well as more business security and broader brand awareness.
Conclusion
As marketing trends continue to grow, such as non-fungible tokens, Metaverse, and cryptocurrency, your brand should invest in all things digital marketing. Performance marketing is a great way to allow brands to avoid overspending on their digital marketing campaigns and helps ensure they get the results they’re looking for.
If you’re a business owner or an advertiser looking for digital marketing specialists in Australia, check out DMKT Performance. We can help you grow your ad campaigns through various marketing tactics, including paid Google ads, social ads, YouTube ads, and SEO.
