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Understanding performance-based marketing

by John Saunders
28th Feb 22 2:52 pm

All companies will likely come across affiliate and partner marketing at some point in their development. But what is it? And what are these different marketing techniques? In short, it is a specific type of advertising where the buyer only pays when they see results. Let’s take a look at performance-based marketing in more detail below.

What is performance-based marketing?

So, as explained above, performance marketing is where marketing providers are only compensated when certain goals are reached. This means that results are the most important metric and not effort or time or any other measure. This can range from purchases, clicks, social media follows and more. Some real-world examples of performance-based marketing include affiliate marketing and pay per click advertising.

When affiliate marketing is concerned, once a customer buys your product or service, the affiliate will gain a fee from the sale. If a sale isn’t made, the affiliate wouldn’t be paid.

When pay per click advertising is used, once someone clicks on the advertisement you will have to pay for the advert. This ensures that the viewer will see the website and the client will know the ad has worked before paying for it.

What are the advantages of performance-based marketing?

The biggest advantage of performance-based marketing is that it is clear what you will pay. This eliminates the chance of extra hidden fees you will have to pay for other marketing techniques or anything else.

Another great advantage is the very low amount of risk. You have a good idea of what you need to budget and can adjust your performance marketing campaigns according to the data in real-time, making sure that your business has the best possible chance of earning a great return on investment.

What are the disadvantages of performance-based marketing?

Probably the biggest disadvantage is that it can cause you to only focus on the current return on investment and not think of any more long term goals to help your brand grow. If you don’t you could forget what your original long term goals were causing the business to eventually stagnate.

Another disadvantage that is becoming more of a problem in recent years is digital fraud. Unfortunately, much as in other industries, there are plenty of unscrupulous individuals and organisations out there providing fraudulent performance-based advertising, which will try to get results through unethical and illegal means, causing way too many problems for your business in the long run. With strong research beforehand, companies can avoid working with the wrong people however!

What are the best ways to measure success?

To make sure that you are getting exactly what you want out of performance-based marketing, you should measure its performance. This can be done in various ways, firstly by setting and making clear the business goals you want to achieve, and then by routinely monitoring your campaign and making any adjustments to the campaign according to the data.

Using performance-based marketing for your business

If your business is online, and you want quick results, performance-based marketing can be an ideal option for your business. However, always make sure to understand clearly what your goals are and do some prior research on which performance marketers to go with to target your audience in the best possible way. If this has whetted your appetite, then check out affdeals for great affiliate deals to get you up and running.

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