Performance Marketing in Digital Marketing (2021)

Performance Marketing in Digital Marketing (2021)

Every business is different. Therefore, every business must approach its digital marketing with a unique plan. Because everybody’s path to success will be different. Performance marketing can be helpful for those companies that are looking for good results with minimum risks.


What is Performance Marketing


Performance Marketing is a comprehensive term that refers to online marketing and advertising programs in which advertisers (a.k.a., “retailers” or “merchants”) pay marketing companies (a.k.a, “affiliates” or “publishers”) when a specific action is completed; such as a sale, lead or click.


Types of Performance Marketing


Performance marketing can be executed on a variety of digital marketing channels.

  • Display Advertising
  • Native Advertising
  • Search Engine Marketing
  • Social Media Marketing
  • Affiliate Marketing

Typical pricing models in performance marketing are CPC, CPL, CPI



How Does Performance Marketing work?


A combination of the following factors come into play based on:

Target audience and segmentation – Each ad platform offers ways for you to target your audience in the form of audience segments.

Bid – The modern advertising landscape calls upon programmatic capabilities that factor in the amount you’ve agreed to pay to show your ad in a specific place and time, to your chosen target audience.

Quality and relevance – Trust is the biggest issue people have with advertising of any kind. As such, ad performance is factored in. If your ad doesn’t work that is, it earns low-quality ratings—the network will reduce its exposure.

Conversion – The economics of performance marketing is based on consumers taking action. When the required action doesn’t take place the network doesn’t get paid. So your ad gets displayed more when it works.


Pros & Cons of Performance Marketing


Pros of Performance Marketing


  1. Result oriented marketing with great advantages
  2. Ease in measuring the ROI of the actions taken.
  3. The success of the campaign to goals based on conversions, such as leads or even sales.
  4. Cheap & Quality conversion for companies
  5. Minimal Risks – Pay for quality and qualify leads only.
  6. Administrate the advertising budget with significantly increased efficiency.
  7. Stand out from the competition


Cons of Performance Marketing


  1. The only disadvantage for agencies and marketers if they don’t achieve the results.
  2. Risk of payments/digital frauds after conversion


FAQs Related to Performance Marketing


Performance Marketing vs. Affiliate Marketing

Performance marketing has ties with affiliate marketing. Affiliate marketing is the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue according to their contribution.

What is a Performance Campaign?

A performance marketing or advertising campaign is similar to other marketing campaigns in the way that you “get what you paid for”


Performance-Based Metrics


  • Cost Per Impression – pay for every pageview where your ad is in place
  • Cost Per Click – pay for every time your ad is clicked. Marketers use this to drive traffic to websites.
  • Cost Per Engagement – pay for every time target customers engage with ads like taking surveys, playing a mini-game, etc. Marketers decide.
  • Cost Per Lead – pay for sign-ups like in newsletters or subscriptions.
  • Cost Per Sale – pay or share revenue for every sale made on a platform.




Performance Marketing is a way to build your brand, increase your product awareness and engage with customers without the limitations of budgets or conflicting marketing channels.