Is performance marketing the future?
As more and more people buy online it is becoming abundantly clear that performance marketing is one of the most successful ways e-commerce sites are winning new customers.
The idea of ‘performance marketing’ is of course, marketing based on performance. This may derive from a number of planned results such as a lead, sale, booking or download. The cost of a lead for many companies is high and the use of performance marketing not only lowers the cost, but gives businesses customers that are more likely to be there for the long haul.
Performance Marketing Combo
Performance Marketing is a combination of paid advertising and brand marketing. Based on a ‘win-win’ for both the retailer and affiliate, performance marketing allows for targeted campaigns that yield a high ROI, and results in payment based on performance.
What is so appealing to a retailer is the fact that they not only just pay for performance marketing results, but they also benefit from greater brand awareness and exposure along with targeted clicks.
Performance Marketing and Affiliate Marketing are two interchangeable terms, but is no different from how ‘marketing’ is the umbrella and tactics such as ‘public relations, branding, advertising, direct marketing’ are inclusive of the marketing mix.
With Performance Marketing, the umbrella includes Influencer Marketing, Email Marketing, Search Marketing and other forms of marketing where the marketing partner receives commission for desired actions such as a sale.
Most marketers are more familiar with the term affiliate marketing, however, a greater understanding of performance marketing will help fill in gaps in marketing deliverables.
What is Affiliate Marketing?
Affiliate Marketing is affiliated brand and specific product marketing that is performance based to drive sales, new customer acquisitions, market expansion and in general high ROI campaigns. Affiliate Marketing is recognisable from its origins of driving sales through cashback and coupon sites.
The ‘new’ era of Performance Marketing can be seen visibly especially through social media channels. Think about when Kim Kardashian spruiks a product - she is not always paid in cash up front and sometimes may choose to take a cut of the sale value rather than an upfront fee.
Instagram in particular is full of Performance Marketing based marketing campaigns with content channels such as blogs, Instagram, YouTube now platforms for Performance Marketing campaigns.
Why is Performance Marketing is on the rise
Companies are seeking ways in which to market their business but are needing to reduce their expenditure and cost of sale.
Affiliate Marketing lifts engagement, reach and conversion rates for brands that are not able to do the same. Basically, a strong Performance Marketing strategy will increase the brand and product exposure for no extra cost.
It also allows companies the opportunity to extend their market reach on the back of more powerful websites and partnership arrangements. This is particularly beneficial for new brands in the market.