What is Performance Marketing? How it works?

Performance Marketing?

Results-driven digital marketing is performance marketing. Payment is based on how users interact with the content, so it's ideal for companies looking to reach their audience at scale.

A performance marketing campaign is a form of digital marketing in which brands pay marketing service providers only after achieving their business objectives, such as completing a sale or generating a lead. Basically, it's a marketing strategy based on performance.

Advertising on social media, search engines, videos, embedded web content, and more is what performance marketing is all about. It connects advertisers to agencies or publishers for the design and placement of advertisements. Rather than paying for advertising

Traditionally, advertisers pay for clicks, impressions, shares, and sales based on the performance of their ads. 

How Performance Marketing Works

Using performance marketing, the advertiser places an ad on a particular channel and pays based on how well the ad performs. Performance marketing can be paid in a few different ways: 

1. Cost Per Click (CPC)

The number of times an ad is clicked determines how much it is paid. As a result, you will be able to drive traffic to your website. 

2. Cost Per Impression (CPM)

Impressions are essentially views of your ad. If 25,000 people view your ad, for example, you will be charged a rate multiplied by 25. 

3. Cost Per Sales (CPS)

In CPS, you only pay when your ads lead to sales. Affiliate marketing also makes use of this system. 

4. Cost Per Leads (CPL)

CPL is similar to cost per sale, as it is paid when someone signs up for something, such as an email newsletter or webinar. Leads generated by CPL can be followed up with and used to drive sales.  

5. Cost Per Acquisition (CPA)

A cost per acquisition is similar to a cost per lead and a cost per sale, but it is more general in nature. In this structure, advertisers pay consumers when they complete specific actions (for instance, making a purchase, sharing their contact information, or visiting your blog).