Performance marketing is a system or model of online marketing in which the advertiser only pays for the results obtained. An example of these results could be a subscription to a blog or newsletter. Generally, the objectives are related to obtaining a response from the public.
Performance marketing companies sign a contract with the client based on achieving specific, specialised and measurable objectives. Many of these performance marketing companies are only paid if the results are achieved.
This type of system is becoming increasingly popular among marketing and communication agencies, which is why many have included a performance department. The more traditional agencies do not guarantee results, while those that have this model do, because, as mentioned above, many do not get paid if they do not achieve results.
Advantages of performance marketing
In recent years, performance marketing has experienced growth within marketing and advertising agencies. Here are the advantages:
- ease of measuring ROI. ROI or return on investment is one of the key KPIs to measure if a company had benefits after making investments. Thanks to this marketing model this metric is easier to measure, since we know the initial investment and the benefits obtained.
- conversion-based goals: Performance marketing allows you to know what the benefit of the strategy has been. In this model you are looking for a conversion, such as a sale or the generation of leads.
- eliminates opportunity costs. This means that the client no longer has to invest without knowing what the result will be. At the beginning we told you that most companies that work with this department do not charge until the client does not obtain the previously agreed objectives. Thanks to performance marketing, the client runs less risk.
- better budget management. By not taking risks, and not paying large amounts for actions that you do not know what results will be achieved, the budget is better allocated to advertising.
- variety of channels: Performance marketing tends to use a wide variety of channels to carry out its actions, including social networks and display ads. It also includes other marketing strategies to be more efficient, such as email marketing and content marketing.
- greater optimisation: In the first point of this section we told you how this model helps you to better measure KPIs such as ROI, and by improving the measurement of actions, it allows you to better and constantly optimise campaigns. By knowing the actions that give the best results, you can invest in them and discard those that do not bring you positive results.
what can you do to succeed with performance marketing?
To recap, performance marketing is a system or model of online marketing in which the advertiser only pays for the results obtained. The truth is that, as in most digital marketing strategies, the success of campaigns cannot be guaranteed, as it all depends on many factors, but there are certain keys to help achieve it.
Any agency or company that has this model and has a department dedicated to performance marketing, we recommend the following keys to facilitate better results:
- the objectives must be clear and measurable, i.e. SMART objectives. It is essential that the objectives are clear from the beginning, as all actions and strategies carried out are to achieve them.
- choose the right KPIs. There are many different metrics in the world of digital marketing, but not all of them serve the same purpose, nor is it necessary to apply all of them. It is essential to do research to find the main and most important ones to measure the performance of your campaigns.
- monitoring is key. Campaign tracking is fundamental, and monitoring your campaigns is essential to know the data in real time. Knowing the data of your campaigns is important to know if they are working or not.
- having the best technologies helps you and makes your work easier, such as using tools for data analysis, monitoring, process automation, etc.
- Communication between the client and the company must be continuous. The conditions must be fixed at the beginning and appear in the contract. The relationship between both parties must be fluid and constant, and transparency is one of the conditions that must be taken into account. The better the relationship between both parties, the easier it will be to carry out the work.
Throughout this post we have told you what performance marketing is, now it's your turn, we encourage you to implement this online marketing model.
Implementing performance marketing actions will not only bring you the benefits we have explained above, but it will also help you to differentiate yourself. The market is becoming more and more competitive, so finding the best ways to stand out is essential.
we hope you've enjoyed reading this!
