Do you remember the days flipping through a magazine, seeing an ad of a beautiful model, her face all beautifully air-brushed with gorgeous skin, and sporting a trendy expensive Rolex on her delicate wrist?
Now, would you quickly rush into the nearest watch shop and purchase the Rolex? I bet you wouldn’t!
This ad probably increased its brand awareness but seriously how many people would actually purchase it? The advertiser probably spent loads of money but could they really measure their ROI? The answer is a big NO!
Now thanks to the advent of the Internet, a new area of marketing has evolved, PERFORMANCE MARKETING.
But, what is performance marketing?
Performance marketing basically lets the advertiser measure the success of marketing campaigns. It is a method of interactive advertising paid for not with a set price, but with a price that’s variable dependent on the performance of the ad. For example, the cost of an ad might be based upon the frequency it’s viewed, it’s actually clicked, how often it actually generates a lead, or how often it generates a sale.
The digital revolution has initiated a data-driven marketing approach which enables you to measure from your brand’s reach, impressions all the way to conversion rates with just a single ad. This has basically given you the power to gain valuable insight into your campaign’s performance, and to help you optimize your campaigns to the lowest cost per acquisition.
It is definitely a transparent mechanics of marketing which is intrinsic to the need to decrease costs and increase ROI. Major multi-nationals can splurge millions, even billions of dollars on branding but in today’s economy, most businesses need to stay profitable by focusing on the bottom line.
Performance marketing entrusts power back in your hands, the advertiser.
In a nutshell, you determine the action, and only pay when the action is executed – being a click, lead or sale.
Next, stay tuned about the Benefits of Performance Marketing in our next Performance Marketing Series article.
Meanwhile, learn more about performance marketing and how our Affiliate Discovery program can help your business measure your ROI.
