Performance marketing has emerged as an inbound marketing buzzphrase as the internet and tech have rapidly evolved. Outside of the marketing realm, most people are unaware of what performance marketing is all about. There are plenty of incorrect assumptions and half-truths about performance marketing since it’s often used as a catch-all term.
The time has come to provide a clear definition of what performance marketing actually means. Let’s take a quick look at performance marketing, why it is so important, and how to maximize its impact on the bottom line.
Performance Marketing Defined
Your business’s performance marketing strategy
plays a major role in its success or lack thereof. Performance marketing is a broad term encompassing different forms of inbound marketing with measurable results.
Performance marketing aims to expand the company’s reach to engage with coveted prospects who have the potential to become paying customers. The success of performance marketing is gauged by specific metrics including:
- Lead engagement
- Ensuing conversions
- Resulting sales
Keep your finger on the pulse of the latest TV-watching trends
, alter your marketing strategy accordingly, and reevaluate your approach moving forward to maximize revenue. Combine performance marketing with conventional outbound advertising spanning a plethora of mediums and you’ll connect with target prospects at every opportunity.
The Ins and Outs of Performance Marketing
Let’s shift our attention to the functionality of performance marketing. Ads are placed on channels to connect with a specific audience. Each unique channel provides its own options for ad presentation, display frequency, and other subtle nuances. Examples of platforms companies use for performance marketing include Google, Facebook, Instagram, and Taboola.
The target audience along with the segmentation of the audience ultimately determines which ads are shown, the frequency at which they are displayed, and the viewers they are displayed to. An advertiser bids, often based on programmatic advertising calculations
, which determine the amount paid to display ads to target audiences. The bid, ad relevance, and even the quality of the ad ultimately shape its display frequency.
The Different Types of Performance Marketing
Performance marketing is an overarching term that refers to different types of content presented to a target viewing audience where you’re paying for the completion of a specific action. As an example, search engine marketing has become popular across recent decades as it provides a golden opportunity to connect with online sleuths. Bing, Google, and other search engines provide pay-per-click programs in which advertisers can display ads on search engine results pages (SERPs) to those who search for words, phrases, or localized information relevant to the business.
The three main types of advertising that are considered performance marketing are:
- Paid Search
- Paid Social
- Connected TV / OTT Advertising
Performance Marketing is Effective for Audiences of all Sizes and Types
In summary, performance marketing provides businesses with access to target audiences in a highly efficient manner. The business pays an online platform for access to specific members of the audience, presenting marketing material that generates clicks and sets the stage for conversions.
Though large platforms such as Facebook and LinkedIn are valuable for establishing connections to the masses, performance marketing also empowers businesses to connect with smaller audiences.
Analyze, Improve and Capture More Market Share
Regardless of the platform your business uses for performance marketing, the right tracking software must be used. Tracking software tabulates ongoing customer actions such as:
- The completion of signup forms
- Conversions through sales
- Revenue per conversion
Continue to analyze these metrics moving forward, alter your performance marketing strategy accordingly and you’ll maximize the value of the connections made through online channels.