Performance marketing refers to online marketing programs where advertisers and marketing agencies are paid especially when a specific action is performed; i.e. a sale, lead, or a click. The price of this performance-based marketing model is managed by the sponsor and the agency on a cost-per-acquisition (CPA) or cost-per-lead (CPL) base.
This kind of marketing can be practiced by third parties, including influencers or affiliate retailing bloggers in order to promote brands and products.
How does it work?
Performance marketing helps build a partnership between two crucial parties: the sponsors and the publishers, i.e. affiliates or agencies. This marketing scheme calls for the merchant to pay the publisher when a specific action is completed.
Types of performance marketing
Performance marketing incorporates a wide range of performance marketing styles, the common ones being the following:
Affiliate marketing is a means where an online retailer pays a commission to an affiliate when the affiliate’s referral traffic leads to a purchase or completion of a particular action.
Native advertisements are specially designed to resemble a website’s theme, and are placed among regular content to offer a higher conversion rate.
Online publishers often embed content that closely resembles editorial content but is sponsored by promoters. The content is typically classified as “paid” or “sponsored".
Social Media Marketing
Social Media Marketing is the act of marketing a brand or its products or services on social media to obtain traffic and engagement. Its a major driver for e-commerce.
Search Engine Marketing
SEM is an effort to gain brand awareness through online search engines like Google or Bing. With SEM, brands use search advertising software to choose target keywords and build ads that appear at the top of search engines above the organic results.