What is performance marketing? 

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Performance marketing is a term used for online marketing campaigns where advertisers pay marketing companies or advertising platforms for results such as clicks or payments. Unlike traditional and organic marketing, performance marketing is specifically used to guide actions and track and measure those actions while attributing the ROI (Return of Investment) ratio of each asset, campaign, or activity. While large companies can spend millions of dollars on branding, most businesses need to focus on the mainline to maintain their profitability. To achieve such profit, using performance marketing as one of the most effective and economical digital marketing methods is very common among online businesses.

What is the use-case of performance marketing?

Performance marketing could apply to all online businesses no matter the size, small or large; all companies could benefit from performance marketing, increase their sales or achieve other defined results, depending on their marketing goals. However, having a successful performance marketing campaign highly depends on the website on which the digital advertising is ongoing.

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What are the performance marketing terms?

Getting to know and understand some of the terms used in performance marketing will give you a better point of view regarding this excellent digital marketing solution.

  • Impression: Impression is the number of times your ad is displayed.
  • Clicks: Sometimes, the clickthrough rate and the number of clicks are more crucial to your digital marketing campaign than showing ads. So, you pay for a specific number of clicks.
  • Engagement: The level of user engagement is a fundamental factor in performance marketing. Naturally, the more they engage with you and your advertising, the more valuable your marketing plan will be.
  • Lead: It is essential to identify your lead contacts. They are the key to engaging with more potential customers.
  • Sale: the primary model in which the whole adverting and digital marketing solution fits.
  • Pay for a specific action: Apart from selling, you may need to take a particular step in your performance marketing strategy, such as registering for an event, downloading an application, or filling out a form; in such cases, you can pay for each action.

The benefits of performance marketing

The first and most beneficial advantage of performance marketing is that the payment is made in exchange for the exact desired results, which improves the number of target audience contacts if done professionally. Additionally, the performance marketing method determines the costs and rewards of your initial investment while improving the level of your branding awareness, your incoming traffic, and your conversion rate.

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Popular channels for performance marketing

In performance marketing, some channels are considered more influential with higher accuracy than the others; some of which are

  • Matched ads: Matched ads are a type of click ads displayed according to the content of the page and its user interface.
  • Sponsor Content or Ad Reporting: A solution where you can pay for advertising in exchange for incoming traffic and conversion rate.
  • Collaboration in sales: Also called affiliated marketing, when you contribute to distributing advertisement of a sale company.
  • Social media marketing:  one of the most promising, effective, and economical solutions in digital marketing is social media marketing.

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