What Is Performance Marketing?
Unlike traditional marketing, where media spend is paid up front and cost is not dependent upon the success of each advertisement or campaign, performance marketing advertisers only pay for pre-defined campaign actions. Performance marketing is entirely ROI-focused and results are 100% measurable. Typically, performance marketing enters a campaign at the tail-end of the sales funnel, once a brand has established engagement, name-recognition and other important brand assets that make performance marketing more valuable.
What Is Digital Marketing?
Digital marketing, which can span across multiple channels, including display, social media, paid search and email, offers deliverables that are often effective, but less predictable than performance marketing. Digital marketing advertisers pay for media placement. For example, if a brand wants to increase ecommerce sales, they may purchase a certain amount of impressions, but, at the conclusion of the campaign, regardless of the outcome (click-throughs, website visits, lead forms, sales) the cost doesn’t change.
What’s The Difference Between Performance Marketing And Digital Marketing?
Although performance marketing is a part of digital marketing, the ultimate differentiating factor when understanding the broader objectives of digital marketing from performance marketing is what advertisers are paying for. Advertisers using digital marketing pay for the media spend no matter the end results, while advertisers using performance marketing pay only for the pre-defined results of the media spend.
How Does Performance Marketing Offer Accountability?
A major benefit of using performance marketing, and a big reason why this marketing strategy continues to stand out, is its ability to remain entirely trackable and measurable. As a result of the accountability performance marketing provides, advertisers are able to completely understand what they purchased. If a brand is seeking new consumers, performance marketers can obtain and clearly trace that. If a brand desires calls or subscribers, marketers can measure that, too.
Are Big Brands Using Performance Marketing?
Performance marketing has proven to be one of the most straight-forward marketing strategies out there — meaning, advertisers know exactly what they are going to receive from their performance marketing spend, avoiding the stress of potentially wasting ad dollars on other marketing tactics that do not guarantee results. Performance marketing allows advertisers to achieve their goals in a concrete way without running the risk of spending all of their marketing budget without anything measurable to show for it.
More and more big name brands are recognizing the benefits of performance marketing. Most recently, Etsy shared that its “increasing strategic investments, seller shipping promotions, performance marketing budget and strengthening customer services are anticipated to get reflected in the fourth-quarter performance.”
P&G’s CEO David Taylor shared that P&G is also planning to invest more in performance marketing, acknowledging the ability of performance marketing to target audiences more precisely. Taylor said he expects P&G to become “more accomplished at performance marketing.” Adding P&G’s intent to target consumers “in a respectful way.”
But, performance marketing is not meant to go it alone. Brands should aim for a healthy balance between performance marketing and multichannel digital marketing strategies, while testing different approaches to find the perfect marketing mix.
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About the AuthorMore Content by Carolyn Harding