Understanding Performance - Based Marketing
Written by Isabella Boston.
What is Performance-Based Marketing?
Performance - based marketing is a digital marketing strategy driven by results. It’s when an agency or publisher places an advertisement for your business on a performance marketing channel such as social media, embedded web content, search engines, and more. It’s ideal for anyone who is looking to reach their target audience at scale, because payment is based on how users interact with the content.
How to Drive More Traffic to Your Business Using Performance-Based Marketing
With performance marketing, advertisers place their ads on a channel and pay based on how the ad performs. Here are a few different ways to pay when using performance marketing:
1. Cost Per Click (CPC) ~ This is an excellent way to drive traffic to your site. Advertisers pay based on the number of times their ad is clicked.
2. Cost Per Impression (CPM) ~ Impressions are the number of views associated with your site. CPM, also known as cost per mile, is a marketing tool in which you pay for every thousand views. For example, if 25,000 people view your ad, you would pay a base rate times 25. Or if the CPM is $20, then you would pay $20 per one thousand times the ad is viewed.
3. Cost Per Sales (CPS) ~ CPS is commonly used in affiliate marketing, and you only pay when you make a sale that was driven by an ad. Freelance writers and copywriters can make excellent affiliate partners as this is a “win-win” situation for everyone.
4. Cost Per Leads (CPL) ~ With CPL, you pay when someone signs up for something such as a newsletter, webinar, or an email. It generates leads to your site so you can increase sales, develop your brand, and follow up with customers.
5. Cost Per Acquisition (CPA) ~ This is like CPS and CPL but is more general. With this system, you only pay when consumers complete a specific action such as sharing their contact information, visiting your blog, or making a sale.
Top Channels for Performance Marketing
1. Content Marketing ~ Content marketing is when a sponsor or affiliate educates your audience with useful and informative information to put your brand in context. For example, a skincare company might have an affiliate write a series of informative articles or blog posts about the benefits of using organic skincare products, with a link back to the brand they are promoting. This type of marketing is used in blog posts, social media platforms, email newsletters, articles and more. It is usually long form and uses storytelling to bring your business to life.
2. Social Media ~ With social media performance marketing, you can reach users and drive them to your site. In doing so, users can also share your sponsored content organically and extend your reach way beyond the original post. Pinterest is an excellent platform for this type of marketing because your “pins” can be shared thousands of times with a link attached to your brand name, website, and company.
3. Native Advertising ~ Native advertising promotes your sponsored content by taking advantage of the natural appearance of your site or web page. An example of this is using sponsored videos on a YouTube page in the “Watch Next” section. This kind of advertising works well because it allows your sponsored content to appear next to other organic content. Users will not be able to tell the difference between these kinds of content which allows you to promote your brand in a more natural way.
4. Banner or Display Ads ~ These ads appear on the side of a social media newsfeed or at the bottom or top of a web page. Because of their ability to provide interactive content and engaging graphic design, many companies find them highly effective. However, they are losing popularity due to today’s ad blockers.
5. Search Engine Marketing (SEM) ~ Because most research is done through search engines; performance marketers depend on SEM and will usually use content marketing and SEO-optimized landing pages. This type of marketing is essential to the success of a business and primarily focuses on cost per click (CPC), especially when using paid advertising.
Benefits of Using Performance Marketing
The future of digital marketing is looking more promising each year. Performance-based marketing is an effective and creative way for you to increase your sales, develop your brand, and drive more traffic to your business. It is “result-based” marketing proven to work.
For more information on how you can get started with performance-based marketing, please click here.
*Disclosure: I am an affiliate marketer with the brand(s) mentioned in this post and if you click on some of the links or banners, I may receive a commission from my partners should you decide to purchase from them now or in the near future.
Isabella Boston is a multi-talented writer and the Founder of Bella’s Attic Studio. She has several years of experience in content writing, copywriting, and social media strategies. She is the author of the romantic and rare memoir, Passion of Flames. Isabella is currently working to spread awareness on the dangers and inhumanity of human sex trafficking. She has special interests in fashion and beauty, health and wellness, and natural healing as it pertains to the body, mind, and soul. When Isabella is not writing, she enjoys playing the violin, learning new languages (currently Italian), and reading books of substance.