26 Nov 2022

Performance Marketing

Performance marketing is a digital marketing strategy in which the advertisers pay the fees of advertising after achieving desirable results such as a decided number of clicks, leads, sales, conversions, etc. It is also known as ‘Pay for performance advertising'. 

How is performance marketing different from digital (traditional) marketing?

Unlike the most traditional forms of marketing, an advertiser only pays the fees of advertising when the measure for success has been met.

How to measure Performance Marketing?

You can measure your performance marketing with your ROI (return on investment). Other key metrics to determine the performance of your performance marketing strategy are –

CPM - Cost Per Mille, or Cost Per Thousand, i.e. the fees are paid after an ad is shown to the viewers(every 1000 times).

CPC – In Cost Per Click strategy, the advertisers pay on the basis of the number of times the ad is clicked on. It is a better indicator of engagement than CPM.

CPA - CPA or Cost Per Action is a popular metric that is used for actions like signing up or subscribing, etc.

LTV – Based on the ongoing activities, LTV or Lifetime Value metric estimates the expected spending of acquired customers.

5 quick steps of building a performance marketing strategy are –

Step 1 – establish your campaign goals

Step 2 – Choose your digital channels

Step 3 – create and launch the campaign

Step 4 – measure and optimise your campaign

Step 5 – acknowledging and handling the potential pitfalls

Benefits of Performance Marketing –

Easy performance tracking| Low-Risk | ROI focused