May 6, 2014

How Brands Benefit From Performance Marketing

Performance marketing is a marketing arrangement in which the marketer is paid only after a specific, predetermined action has been taken by the end user. Performance marketing can be implemented to promote a broad range of products and services over a broad range of digital channels such as mobile, social, and search engine optimization or SEO. There is an added benefit for brands with this kind of marketing that isn’t available in other forms and that is that the risk is spread out between the publishers that promote the brand and the brand itself. This allows brands to fund performance marketing campaigns from the sales that are generated rather than from their dedicated marketing budgets.

In performance marketing the amount of risk is dependent upon the nature of the campaign. In a cost-per-thousand impressions campaign, or CPM campaign, the brand is typically saddled with most or all of the risk. In a cost-per-download campaign, the risk is shared by both the publisher and the brand. Cost-per-acquisition or CPA campaigns the risk is laid entirely on the publisher. But regardless of the campaign, performance marketing dictates that the publisher make certain that all advertising is aimed at the right audience. Because of the shared risk involved in performance marketing campaigns, brands have the luxury of being able to use several different channels and types of campaigns.

This kind of flexibility ensures the easy use of performance mechanisms across a variety of channels which means a more diverse audience. Success, however, is largely dependent upon the campaign, whether or not it is targeted properly, and whether it is engaging to the prospective customers or not. This is the reason that brands are becoming increasingly aware of the need to make their campaigns available across a wide range of formats including mobile, mobile search, apps, and of course email.

For more information from Marketing Week, click here.