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5 Reasons Why You Need Performance Marketing

by , Marketing Specialiston September 25, 2017

Most advertising campaigns have a goal attached to them such as increasing website traffic, getting leads, or growing conversions.

Performance marketing makes it easy for marketers to optimize campaigns for outcomes like these. Unlike traditional marketing, advertisers only pay for specific actions that contribute to their goals.

Moving from traditional to performance marketing can be a big leap for advertisers. Let’s break down the difference between traditional and performance marketing approaches and the five reasons marketers should consider using this new format.

Performance marketing vs. traditional advertising

Many traditional advertising formats work by charging campaign costs upfront regardless of results. For example, when a marketer buys a print ad, they pay a bulk sum based on past readership. The cost of the placement is related to past averages instead of actual performance.

On the other hand, performance marketing campaigns charge advertisers once a placement has delivered on results. This type of marketing is mostly reserved for digital campaigns that are easily measured. For example, a marketer running a website traffic campaign on Facebook would only pay for clicks that Facebook refers to the website.

Common types of performance marketing campaigns include cost per click (CPC) and cost per acquisition (CPA). Marketers normally identify their goals at the beginning of the campaign and set an ideal rate per result.

performance marketing

Why performance marketing is a valuable tool

Paying for results in advertising is a relatively new option that has only been in practice for the past few years. The rise of digital marketing through display, email, and social media channels makes it easier for marketers to track and optimize for results.

Marketers hesitant about performance marketing should consider the five key benefits that it provides over traditional approaches including easier planning, budgeting, performance tracking, feedback, and targeting.

Better planning

Performance marketing campaigns are easy to budget for because marketers have to identify goals and provide an ideal cost per action at the beginning of planning.

From there, it’s simple to find the proper budget based on required outcomes. For example, a $5,000 budget is appropriate if a marketer expects to pay $0.50 per click and has a goal of 10,000 website visits.

Another perk is that outcomes are a priority throughout performance marketing campaigns, meaning ads will be optimized for goals—whether it’s viewable impressions, clicks, leads, or whatever else.

Pay for results

The most obvious benefit of performance marketing campaigns is being able to pay for results without undefined overhead. This is especially key to marketers seeking actions such as leads or conversions.

In performance marketing, it’s important that marketers set a goal and stick with it. Media campaigns that optimize for conversions and then switch to clicks might underperform in both categories. It’s best to design creative and budgets around the specific goal provided at the outset.

It’s worth noting that some performance marketing channels might charge more than what marketers set as a target cost. For example, if a marketer provides a $5 cost-per-conversion for an email sign-up but has a very low conversion rate or a super defined audience, the platform will likely raise the costs to meet demand for the impressions it took to get the conversion.

Track performance

Since performance marketing is overwhelmingly digital, marketers benefit from near-instant results and insight into performance. This includes the spend and number of impressions, clicks, and conversions.

With these metrics, marketers can track performance throughout a campaign to determine return on investment. If a campaign isn’t meeting expectations, it can be paused and the budget can be moved elsewhere.

Pivot in real time

Most platforms break down performance by individual advertisement. Knowing how each creative performs with a target audience is a huge asset, allowing marketers to adapt and react to feedback throughout the campaign.

If an ad with a certain headline delivers a higher click-through rate than others, smart marketers will use that headline with other media to see if the conversion rate can be further optimized. Reacting to this performance over the life of a campaign can lead to more results within the original campaign budget.

Discover new formats

Performance marketing can be done through single placement channels such as Twitter, but marketers can also partner with performance marketing networks to expand their reach. These networks offer various placement opportunities, which can provide new insight into valuable placements based on audiences.

Performance marketing networks are especially helpful for marketers targeting hard-to-reach audiences like developers, which avoid display ads and can be hard to find on social media. By using an email performance marketing network, software company Kinvey saw a drop in cost-per-conversion and a rise in conversion rates because email reached its developer audience anytime, anywhere.

Is performance marketing for you?

Marketers looking to level-up advertising efforts and boost results should be intrigued by performance marketing and all it has to offer. Unlike traditional methods, performance marketing gives advertisers the opportunity to plan better, pay only for results, track performance, react to feedback, and discover new placement opportunities.

With all of these perks, it’s no surprise that performance marketing is becoming the new standard for advertising.


Tired of underwhelming ad results? Reach out today to learn how performance marketing can boost your campaigns.

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