What is Performance Marketing?

Performance marketing is a digital marketing strategy or campaign that focuses on achieving specific business goals (measurable results), such as increasing website traffic by X% each year or driving X amount of conversions. It involves using data and analytics to optimize marketing campaigns and allocate resources in a way that maximizes the return on investment (ROI). Performance marketing can include various tactics, such as paid search, affiliate marketing, and email marketing, and it is typically goal-oriented, data-driven, and ROI-focused.


Who can do performance marketing?

Performance marketing can be done by a variety of professionals, including digital marketers, advertising agencies, and marketing consultants. It typically requires a combination of analytical and creative skills, as well as a strong understanding of data and technology. Performance marketers may work in-house for a business or organization, or they may work at an agency or as a freelancer. In order to be effective at performance marketing, it is important to have a strong understanding of the target audience, the business goals and objectives, and the various tactics and channels available for reaching and engaging with potential customers.


What is not considered performance marketing?

Any form of marketing that may not be as focused on specific goals or may not involve the same level of data analysis and optimization. For example, brand marketing is focused on building awareness and familiarity with a brand, rather than directly driving conversions. Public relations (PR) involves managing a company’s reputation and relationships with the media and other stakeholders, rather than directly driving sales. Affiliate marketing is a type of performance-based marketing in which a business rewards affiliates for each customer brought to the business by the affiliate’s own marketing efforts. The affiliates typically receive a commission for each sale or lead that they generate. These and other marketing activities may be important for a business, but they are not typically considered to be performance marketing.


What are ways to measure performance marketing?

There are several metrics that are important to track in performance marketing campaigns, as they can help to determine the effectiveness and ROI of the campaigns. Some examples of metrics or KPIs to track include:

  1. Cost per acquisition (CPA): This is the cost of acquiring a new customer through a marketing campaign.
  2. Return on ad spend (ROAS): This is the amount of revenue generated for every dollar spent on advertising.
  3. Conversion rate: This is the percentage of website visitors or leads that complete a desired action, such as making a purchase or filling out a form.
  4. Click-through rate (CTR): The percentage of people who click on an ad or link after seeing it.
  5. Cost per click (CPC): The cost of each click on an ad.
  6. Cost per thousand impressions (CPM): The cost to generate 1,000 views of an ad.

By tracking these and other metrics, performance marketers can measure the effectiveness of their campaigns and make data-driven decisions to optimize and improve their efforts.

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