What is Performance Marketing?
Performance-based advertising is a method of digital advertising where the advertiser pays for specific actions taken by users, such as clicking on an ad, making a purchase, or signing up for a service. This differs from traditional advertising, such as display advertising, where the advertiser pays for ad impressions regardless of whether the user takes action. Marketers often use performance-based advertising to drive more measurable results and optimize their advertising spend.
Performance marketing works when advertisers connect with either agencies or publishers to design and place advertisements for their company on any number of performance marketing channels —social media, search engines, videos, embedded web content, and more. Instead of paying for an advertisement in the traditional way, these advertisers pay based on how well their ad performs, by measuring number of clicks, impressions, shares, or sales.
How Performance Marketing Works
Advertisers put their ads on a given channel, and then pay based on how that ad performs. There are a few different ways to pay when it comes to performance marketing:
1. Cost Per Click (CPC)
Advertisers pay based on the number of times their ad is clicked on. This is a good way to drive traffic to your site.
2. Cost Per Impression (CPM)
Impressions are essentially views of your ad. With CPM, you pay for every thousand views (so if 25,000 people view your ad, for example, you’d pay your base rate times 25).
3. Cost Per Sales (CPS)
With CPS, you only pay when you make a sale that was driven by an ad. This system is also commonly used in Affiliate Marketing.
4. Cost Per Leads (CPL)
Much like cost per sale, with CPL you pay when someone signs up for something, like an email newsletter or webinar. CPL generates leads, so you can follow up with customers and drive sales.
5. Cost Per Acquisition (CPA)
Cost per acquisition is similar to CPL and CPS but is more general. With this structure, advertisers pay when consumers complete a specific action (which could include making a sale, sharing their contact information, visiting your blog, etc.)
Top Performance Marketing Channels
What channels work best when it comes to performance marketing? There are five types of performance marketing that can be used to drive traffic:
1. Banner (Display) Ads
If you’ve been online, you’ve probably seen plenty of display ads recently. These ads appear on the side of your Facebook newsfeed, or at the top or bottom of that news web page you just visited. Though display ads are slowly losing their appeal due to the increasing popularity of ad blockers and what experts call banner blindness, many companies are still finding success with display ads that utilize interactive content, videos, and engaging graphic design.
2. Native Advertising
Native advertising takes advantage of the natural appearance of a web page or site to promote sponsored content. For example, sponsored videos might appear in the “Watch Next” section of a YouTube page. Native ads are also popular on ecommerce sites — you may have seen them on Facebook Marketplace, for instance. Native advertising works because it allows your sponsored content to live seamlessly beside other kinds of organic content. Often, users won’t differentiate between these kinds of content, allowing you to promote your brand in a way that feels natural.
3. Content Marketing
Content Marketing is all about educating your audience. With content marketing, the focus is on providing useful information to users and putting your brand in context. For example, a vitamin company might write a series of informative blog posts about the benefits of probiotics, with a link back to the probiotics they sell. Content marketing is a channel that can include blog posts, case studies, e-books, and more.
4. Social Media
For performance marketers, social media is a haven. It offers not only the opportunity to reach users and drive them to your site — users can also share your sponsored content organically, extending your reach far beyond the original post. Facebook has the most extensive list of services for performance marketers, but other platforms like LinkedIn, Instagram and Twitter also offer many opportunities to reach new customers.
5. Search Engine Marketing (SEM)
Most online research is done via search engines, and that means having a site that is optimized for search engine marketing (SEM) is essential. In terms of performance marketing, the focus is primarily on cost-per click (CPC), especially for paid advertising. For organic SEM, many performance marketers rely on content marketing and SEO optimized landing pages.
Boost Your Business Performance with Our Performance Marketing Services
At Stars Commerce, we specialize in creating custom performance marketing solutions that fit the unique needs of your business. Our team of experts will work closely with you to develop a tailored plan that aligns with your goals and delivers results.
We use the latest tools and technologies to ensure your campaigns are optimized for success. And with our detailed reporting and analytics, you'll always know how your campaigns are performing and where your marketing dollars are going.
Don't miss out on the opportunity to take your business to the next level. Contact us today to learn more about our performance marketing services and how we can help you achieve your goals.