What is Performance Marketing?

Performance marketing is a form of advertising in which you have to pay when you get results in a specific outcome, such as a sale or lead. Performance marketers get paid for actual performance, not just the effort or time they put into promoting your product.

Performance marketing is an effective way to advertise, allowing both sellers and affiliates to build their businesses in new ways. A retailer’s campaign is tailored to fit each person’s needs, which makes it a win-win situation for all involved.

How does it work?

Advertisers use performance marketing to get their ads in front of people who will be most likely to engage with their brand. They pay the platforms based on how many times the ads are clicked, viewed, registered for, sold, or any other activity agreed upon by both parties. With performance marketing there are a few different ways to pay:

1.    Cost Per Click (CPC)

Advertisers are paid based on how many times their ads are clicked. This is an effective approach to increase visitors to your website.

2.    Cost Per Impression (CPM)

Views of your ad are known as impressions. You pay per thousand views when you use CPM.

3.    Cost Per Sales (CPS)

You only pay with CPS if you make a sale as a result of an advertisement. In affiliate marketing, this approach is also widely used.

4.    Cost Per Leads (CPL)

CPL allows you to generate leads, which you can follow up with and increase revenue.

5.    Cost Per Action (CPA)

CPA is identical to CPL and CPS; however, it is the most general term and, therefore, the most appropriate for your business. Advertisers are compensated when customers execute a specific action (which could include making a sale, sharing their contact information, visiting your blog, etc.).

Top Performance Marketing Channels

Five different types of performance marketing are used by agencies and advertisers to attract traffic.

1.    Banner (Display) Ads

2.    Native Advertising

3.    Content Marketing

4.    Social Media

5.    Search Engine Marketing (SEM)

Summary

Performance marketing is becoming more popular among e-commerce brands, merchants, and retailers. It enables marketers to reach out to, interact with, and convert new buyers in emerging markets at a lower price, with less risk, and a significantly higher ROI than any other large-scale marketing channel. It’s a way to grow your brand and raise product recognition while collecting crucial data.

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