7 Things to Know About Performance Marketing

Know About Performance Marketing

You’ve probably heard a lot about performance marketing, but what really sets it apart from any other kind of marketing? We spoke with Nir Elharar, author of this great post about getting started with performance marketing, about what puts the performance in performance marketing.

Things to Know About Performance Marketing:

  1. It’s based on optimizing for down-funnel KPIs
  2. You only pay for what you get
  3. The cadence of optimization is much faster
  4. It gives you real-time measurement of ROI
  5. The risks are lower for advertisers
  6. It works with small budgets and large ones
  7. It’s an innovative space


1.It’s based on optimizing for down-funnel KPIs

With other kinds of marketing, like display advertising or awareness marketing, your KPIs (Key Performance Indicators) might be things like impressions or clicks, but performance marketers are focused on actions: leads, sign-ups, conversions, and sales.

2.You only pay for what you get

Instead of paying up front like with a display ad, in performance marketing you pay per desirable action. If a campaign isn’t succeeding, then it’s not costing you as much. Which is why performance marketers are always optimizing, tinkering, and trying new things.

3.The cadence of optimization is much faster

Because performance marketing is based entirely on measurable results, the optimization happens much faster. Performance marketers don’t have three, four, or five weeks to get it right. They have to hone in on the right audience quickly. It’s much more hands-on, with a constant feedback loop of data: pouring more resources into the strategies that are working and pulling them quickly from strategies that aren’t.

4.It gives you real-time measurement of ROI

With other kinds of advertising and marketing, measuring results can be difficult. How do you know if you’ve raised someone’s brand awareness? How do you measure good feelings about your brand? There are ways, of course, but they usually happen after the fact and aren’t necessarily hard data. With performance marketing, you can see a snapshot of your ROI at any given instant: the cost per lead, per sign-up, per sale.

5.The risks are lower for advertisers

Since you only spend for what you get, you don’t have to sell anybody in your business on taking a risk and putting forward a big chunk of a budget for an ad. That also means that campaigns can be launched more quickly, because there aren’t laborious approval processes. As Elharar says, “In most traditional forms of advertising, the advertiser pays a fee up front for ad space independent of performance. That could mean hundreds to thousands of dollars spent without ever seeing a conversion. With performance marketing, advertisers only pay for successful transactions.”

6.It works with small budgets and large ones

Getting started with performance marketing doesn’t take a huge budget, which makes it more accessible to smaller organizations or brands just starting to figure out their marketing strategy. Seeing results is a great way to convince stakeholders to get on board, and with performance marketing, you see results as you invest your marketing budget. It’s also easy to adjust: ramping up a campaign can be simple and quick.

7.It’s an innovative space

Performance marketers are always looking for new ways to reach “the right audience at the right time,” as Elharar says. In today’s quickly-changing landscape, that often means performance marketers are the first ones trying and optimizing marketing for new social platforms, mobile-first applications, chatbots, and more.

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