Businesses spend hundreds of billions globally on online marketing every year. This has resulted in a variety of marketing methods for modern businesses, including performance marketing. But what is it? Why is it important for businesses in 2020? And does it really work? This blog explores performance marketing in detail and compares it to digital marketing. See how it can work for your own business in 2020.
Performance Marketing Defined
Performance marketing is based on a marketing agency achieving specific results for your business. It is typically a pay-as-you-go model. That means you only have to pay the agency if it delivers the performance or profitability you agreed upon. For example, a reseller for an internet provider would only be paid if it achieved XYZ sales targets for the month for Internet Preferred plans. Unlike digital marketing, you only pay for the results achieved.
Common Performance Marketing Tactics
One of the most common performance indicators that businesses require from agencies is lead generation. Generating leads depends heavily on brands capturing their audience’s attention. A performance marketing firm can help you reach out to more prospective customers or leads. That means getting your brand out to as many individuals as possible. The difference between this and ann digital marketing firm is that you will only pay performance marketers on meeting specific targets.
Another performance marketing tactic that can help your business is generating more sales. Accordingly, performance marketers will make content and ads that encourage more people to buy from your business. Again, specific sales targets for every period must be agreed upon first. You only pay up if the firm meets the targets for that period.
A performance marketing indicator that has become exceedingly popular over recent years is the number of app downloads. This is a very important metric for businesses that want to increase the number of downloads and users on their app. Performance marketing firms will work to achieve a set target of downloads for you. If you depend on your apps for sales, more downloads usually mean more revenue. You can also combine this with sales targets if you want.
The Difference Between Performance and Digital Marketing
Digital marketing is a fairly broad term. But all digital marketing campaigns have the same overall goal. They aim to move more customers through your marketing funnel. Digital marketing consists of many fields such as branding, generating leads, and increasing website traffic. However, performance marketing is not part of digital marketing. In fact, it is a very different approach to marketing businesses online.
Let’s look at it this way. Say you engage a digital marketing firm for your brand. The firm will likely charge you a monthly retainer for its services. You will need to decide on both long-term and short-term objectives for the digital marketing agency. This will often involve some collaboration on your part with the marketers. Otherwise, it will be difficult to develop a result-oriented strategy.
Now compare it to hiring a performance marketing agency. Instead of a retainer, you only have to pay for results delivered. This is the primary difference. You don’t have to collaborate or strategize with the performance marketing firm. The agency handles all the details, you just assign them targets.
The Advantages of Working With Performance Marketers
There are several advantages to businesses when it comes to hiring performance marketing agencies. The biggest is the ability to track and measure results in real-time. In the same way as digital marketing, there are analytics that allow you to measure your ROI. Every click, lead, or sale is available for you to examine. This means that you know exactly what return you’re getting on your spend, at any given moment. This makes for more transparency in measuring and rewarding performance.
Setting and optimizing key performance indicators is a great benefit to businesses. They are milestones along the way to achieving targets. Being in the know about these KPIs allows businesses to target them directly with a performance marketing agency. These agencies aim to deliver consistently high performance levels. That way you can optimize the results you get on specific KPIs.
Another huge advantage of using performance marketing is the pay-as-you-go model it follows. With digital marketing agencies, you need to deal with retainers and up-front payments. But the case is very different with performance marketing agencies. You only have to pay them when the desired result is achieved. It is a lot different from services like Cox Bill Pay. Instead of a blanket cost, you get to pay only for performance achieved. This is often more suitable for smaller businesses.