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What is Performance Marketing or Results Marketing? Definition and advantages

Performance Marketing or Results Marketing is a system in which the advertiser pays for the results obtained in the digital medium.

Marketing departments of companies increasingly trust performance optimization agencies, because they know that with their investment they will achieve their objectives. Factor that other times remain up in the air, with other types of more classic marketing agencies. Where they create a strategy for the client but do not ensure results.

These objectives are usually related to obtaining a response from the impacted audience: such as a subscription, alike, a forward, a registration, or the generation of a sale, among others.

In performance marketing, you no longer pay per click or per impression, but rather for results. The factor that determines if a campaign has gone well is real data, collected through a tracking system that records clicks, subscriptions, sales, or conversions in real time.

Characteristics of Performance Marketing

Many advertisers still have doubts about what online performance marketing is because it is a relatively new term that encompasses all marketing methodologies.

Some people confuse performance marketing with affiliate marketing.

When this second concept, in reality, is a tool and technique available to marketers to carry out their work in performance marketing. Or even some people relate it to artistic performance, without having anything to do with it.

These campaigns are launched in a digital environment (and increasingly in mobile formats), with the aim of obtaining measurable results, unlike branding campaigns or campaigns that seek to gain notoriety. Universal and conversion cookies or pixels can be used to track user actions.

Advantages of Performance Marketing

  • Easy to measure the ROI of actions. The classic CPM and CPC models offer a cost linked to results, but their real relationship with sales is much more diffuse. In the case of CPM, we can only know the number of times a given ad has been shown, although we can't even be sure that a real person has seen it. And in the case of CPC, we can know who has landed on our site after clicking, but this KPI does not tell us what happens next: has the consumer left the page without reading it, or has he continued advancing through the advertising funnel? Instead, by tracking with cookies or pixels, you can find out exactly what each user does on a landing page or on the brand's website.

  • Goals based on conversion. These goals can be sales or leads. This will allow us to know what the real benefit of the entire online marketing strategy has been. For example, 1,000 sales conversions with an average value of €50 or 5,000 downloads via the form with a 20% chance of a sale. This way we can accurately assess the return on investment.

  • Major optimization. Improving measurement helps us to be able to constantly optimize campaigns. If we know which stocks are performing best, we can boost these and direct investment to them, and weed out the stocks that don't convert. In addition, since technology can measure results in real-time, it can also help us establish continuous controls that refine campaigns or simply stop them. The result is a constant improvement in brand advertising.

  • Opportunity costs are eliminated. This means that the advertiser no longer has to invest a budget in campaigns without knowing what the results will be. With performance marketing, the risk is minimal and allows cost estimates of how much each campaign will cost.

  • Manage more efficiently the budget allocated to digital advertising.

  • Great variety of channels. Performance marketing strategies unfold their potential through a wide variety of online channels: advertising on social networks, email marketing, content marketing, or display.

Reasons for deploying Performance Marketing actions

Do you still have doubts? So here are 5 reasons for you to carry out performance marketing actions from this very moment. They are taken from a Cake Marketing study and they will surely convince you:

  • It is the fastest-growing digital marketing and advertising segment.

  • For every $1 invested, a return of $11 is achieved.

  • It is recommended by 93% of companies that have hired a performance marketing agency or that apply performance optimization internally in their marketing department.

  • New income opportunities are achieved with mobile strategies, in the conversion of visits and PPA (pay-per-action) leads.

  • Performance marketing will see its effectiveness increase thanks to technologies based on artificial intelligence. That will help to better understand how to increase ROI and optimize campaigns in real-time.

Key recommendations of Performance Marketing

Captio recently conducted The New Normal: Performance Advertising Drives Effectiveness study among 152 marketers from the United States, United Kingdom, Germany, and France. The most outstanding recommendations that can be extracted from the report are:

  • Implementing performance marketing strategies helps to differentiate yourself competitively. More at a time when this discipline is still hatching and its introduction in our country are in process.

  • Advertising companies are implementing performance marketing in their strategies because it offers a better return on investment.

  • It is going from being a novelty to being the norm. 47% of the marketers surveyed carry out retargeting actions (49% in e-commerce) and 54% focus on campaigns that deliver personalized advertising to their consumers.

  • In 46% of cases, performance marketing actions are multi-device and multi-channel. Including the mobile web, mobile in-app, email, and social platforms.

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