What is performance marketing?

Recently we wrote about performance marketing automation. Today we will take on performance marketing itself – what it is, how to do it well, what are the criteria for its effectiveness, and most importantly – what is better to beware of so that your marketing strategy doesn’t take a hit.

What is performance marketing? A bit of theory

Translated into Polish, performance marketing is performance marketing. That is, all marketing activities that should have such an effect on the customer that he or she takes an action that we particularly care about. This could be signing up for a newsletter, downloading a mobile app or simply purchasing a product or service.

In performance marketing, the advertiser pays for the effect – the budget gets poorer when the customer performs the mentioned action. In other words, performance marketing focuses from the beginning on a real, proven and proven result. Among other marketing strategies, performance marketing is (deservedly) popular and widely used. But before delving into the details, let’s arm ourselves with the necessary tools.

Tools useful in performance marketing

Before setting out, not only should you assemble a team, but you should also think about the goals of your performance marketing campaign. Because the goal determines the tools you choose.

Google Analytics – okay, people say different things about GA4. You still see a lot of childhood diseases. But it’s still a basic analytics tool that (properly configured) will give meaningful answers as to whether your performance marketing makes sense.

SEO tools – we’re not making a cryptic statement and not naming names, but you’ll find a lot of them on the web. The biggest and most popular ones will help you build a smart keyword strategy and indicate in which areas you should concentrate your efforts, and which topics (for example, niche keywords) can be let go at the beginning.

Google Ads – an indispensable weapon and advertising harvester. 

Billing models in performance marketing

We mentioned that in performance marketing the advertiser pays for the final result – not for the display of ads. Yes, from an image point of view, a large number of ad impressions also makes sense – customers will “shake” with your brand and start to notice it, even if they don’t want to click on the ad at first. Nevertheless, as the name of the strategy suggests, in the end it’s the effect that counts. We have several models that differ in what action the user has taken:

CPC (cost per click) – cost per each, even single click.

CPL (cost per lead) – cost per each lead acquired. Who the lead is, you decide. It could be a newsletter signup or filling out a form.

CPA (cost per action) – cost per specific action.

CPO (cost per order) – cost per order. You are billed here for just placing an order, not paying for it.

CPS (cost per sale) – cost per sale. Here we are dealing with billing for the final transaction.

Benefits of performance marketing

Performance marketing is an opportunity for your business. Especially if you do not operate with large budgets. It’s also a safe solution, because you tailor the strategy to the needs of the business and tailor it to your needs. It’s relatively easy to do performance marketing, especially if you clarify expectations and don’t throw yourself in at the deep end (read: advertise inconsequentially everywhere you can). Performance marketing combined with Marketing Automation allows you to reach your customers in the right place at the right time – which means it’s effective, while protecting you (at least in part) from carelessly burning through your advertising budgets.

Performance marketing combined with Marketing Automation will provide you with valuable information about potential and current customers. By analyzing their behavior and the results of past campaigns, you can not only “tailor” your next marketing campaigns, but also personalize your communication with your audience. Like a mantra we repeat that today the key to marketing success is precisely personalized communication – customers like to feel that you are talking to them as if they were old friends and providing them with what they need or are looking for most at the moment.

In addition, the effectiveness of a performance marketing campaign is easily and quickly measurable, so you can react in advance if something goes wrong, or brag to your boss that everything is going perfectly. Performance marketing is no rigid corset, either; you can modify the details of your performance marketing campaign at any time to make it even better suited to your customers’ needs. We don’t need to mention that marketing automation is a nice support in this too, right?

The most popular performance marketing channels

Social media. Some are rallying the twilight of the era of the all-powerful Facebook (or Meta), but it’s still a solid tool for advertising your products or services. Hardly, as in other soszjalas (Instagram, TikTok, LikedIn) the advertising ecosystems of these platforms are constantly evolving, providing marketers with newer and newer advertising formats. The idea of performance marketing depends on the medium – lighter content will work well on FB, while LinkedIn is a slightly more business-oriented platform, but one that brings in more specific leads (as long as your business profile targets professionals in their industries, for example).

Affiliate programs. We’ll do a separate post about them soon, so now in a nutshell. If you find a sensible agency (or, as they say nicely, an affiliate), it’s a win-win situation. You get the benefits, they get the benefits, and performance marketing provides you with valuable leads.

Good old email marketing, for which you can also (and how) use Marketing Automation. Contrary to what some people say, a well done mailing can still elegantly increase sales and attract new customers.

To sum up

Performance marketing is about measurable results and tangible, quick benefits. It will work in virtually any industry, although the most natural seems to be e-commerce. Add to that meaningful analytics, good performance accounting models and the potential when combined with the power of Marketing Automation.


Leave a Reply

Your email address will not be published.