Omis Media

What is Performance Based Marketing?

Performance based Marketing is a special type of online marketing in which interactive advertising is being done and paid on the bases of the performance of the ad and not for a set price. It will be a variable price that will entirely depend on the performance.

You can take it as the cost for a single ad can be decided upon how often the ad is viewed on a single webpage, how often it was clicked by the user after seeing the ad, how often it actually generates a lead after getting clicked by the user and how often it converted into a sale.

In more formal way Performance-Based Marketing can be described as “ It is a term used for Online Marketing and advertising programs in which the advertisers and different marketing companies will only get paid when a certain action is done by the user: such as a lead, sale or a simple click”.
Affiliate marketing is working in the industry as a subset of Performance-Based Marketing. The internet publishers get paid in order to promote a certain services or product.

This Performance based marketing is a win-win marketing strategy for a retailer and a publisher as it allows both parties to truly targets the campaign in a significantly high strategic way and it is totally based on the performance.

A merchant will be feeling confident that there time and wealth is being well spent as they are only paying the retailer or the publisher whenever a specific action is done by the user so basically in this way they are basically converting there targeting audience before they even pay for the transaction.

They are not just paying the retailers after the desired action is done by the user in-fact they are also receiving the bonus and that is free brand exposure and targeted clicks from the user. Today there is no other new customer acquisition strategy available like this one !

Performance-Based Marketing Payment Models:

Performance-Based Marketing allows publishers and advertisers to setup different commissions for any of their individual campaign following any of the Performance-Based Marketing payment models:

  • Pay Per Sale
  • Pay Per Lead
  • Pay per Click

Top Four uses of the term Performance-Based Marketing:

There are several areas of digital marketing that comes in the play whenever there’s a use of term “Performance-Based Marketing” but they all are slightly differ from each other in every manner which leads to the conclusion that not all Performance marketing is the same. These are some of the areas in digital marketing that use the term Performance-Based Marketing.

  1. Affiliate Marketing
  2. Native Advertising
  3. Sponsored Content
  4. Social Media Marketing
  5. Search Engine Marketing

Affiliate Marketing:

Affiliate Marketing is more likely to be related to any type of the digital marketing that is affiliated with the advertisers and get paid out only after a certain action is being done. Affiliate Marketing is the most traditional type of digital marketing and used whenever Performance-Based marketing comes into the equation.

Native Marketing:

Native Marketing is one of the many types of paid media that does not display ads or banner ads which don’t truly look like ads. These ads tend to follow the context and functions of the website they are placed on such as any newspaper website or any social media website. The two most common payment methods for Native Advertising are CPC and CPM.

Sponsored Content is the type of digital marketing that is widely used by influencers and content websites. In this type of performance marketing different dedicated posts or promoting articles for a brand or product in return for some form of compensation are involved. Sometimes these compensations come in the form of free products or a better experience.

Social Media Marketing:

Social Media Marketing is that type of performance-Based Marketing that uses different types of social media platforms to boost and gain traffic or to spread brand awareness. You can find examples like different engaging content being showcased on Facebook, Pinterest pages or on instagram.

Search Engine Marketing:

Search Engine Marketing can be break down into two further parts; it can be successfully done through PAID or ORGANIC options. Paid Search Engine Marketing means the advertiser will pay for clicks to ads on search engine such as Google and Bing. On the other hand organic Search is totally the opposite of paid search. It uses unpaid methods such as Search Engine Optimization and it highly rely on the search engine’s own algorithms to get rank in the top.

Concluding Summary:

Performance-Based Marketing is the one of the fastest growing marketing strategies for any Ecommerce brand, Merchants and retailers. Different trends shows that in order to fully optimize better results faster and cheaper new players that are entering into the game are continuously investing in it  and new technologies are being merging by them in it.

So it does not matter where you and your precious brand is standing in the equation of performance-Based Marketing just remember there’s always room to improve and grow.

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