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Performance Marketing

As advertising methods evolve, more and more marketers are turning to performance marketing to ensure their campaigns get measurable results.

Before advertising success was measured in shares, clicks, installs, and impressions, things were a bit more basic. The creative and business forces behind a marketing campaign would use their magic to make ads, choose and pay for their placement, and hope to see results.

Things are a lot different now, and advertisers are demanding more for their money. Performance marketing is one way to get this done, and different forms of performance marketing are quickly gaining popularity in this results-driven industry.

What is performance marketing?

As the name implies, performance marketing is a type of marketing in which advertisers pay when they achieve a specified result–not before the ad runs. The non-profit Performance Marketing Association defines it as “a comprehensive term that refers to online marketing and advertising programs in which advertisers (a.k.a., “retailers” or “merchants”) pay marketing companies (a.k.a, “affiliates” or “publishers”) when a specific action is completed; such as a sale, lead or click.”

In many cases, that does mean a certain number of clicks, or, in the case of videos, a specified percentage watched; in other cases, advertisers don’t pay until consumers follow a call to action and, in the case of mobile performance marketing, actually install their app.

How is it different than other forms of marketing?

In more traditional types of marketing, the payment scheme is reversed; the advertisers pay upfront and then the publishers run ads. This type of marketing does have its place, especially when raising brand awareness. Sometimes, the first step is just letting potential consumers know that the brand exists and what services it provides. You’ll see these ads all over–on social media, websites, and in apps. And of course, with older types of ads for TV and radio, there’s no interactivity, so there’s no immediate, measurable way to discern impact.

Brand marketing, of course, has its drawbacks. As Forbes explains, “Metrics associated with this type of marketing — likes, favorites, retweets, and perceived equivalent media value — all have some sort of impact. But they’re not often discernible on a client’s bottom line. That means the client paid the agency a hefty fee for gained awareness, but nothing more.”

These days, consumers constantly have a screen in front of them, and there are hundreds of companies vying for their attention on a daily basis. It’s no wonder more and more marketing pros are turning to performance marketing so they can focus on results.

What are some examples of performance marketing?

There are quite a few types of performance marketing, depending on the channel. You can run performance marketing campaigns on in-app ad networks like ironSource, social media channels like TikTok or Facebook, or even search channels lke Apple Search Ads.

Each channel may offer different pricing models. For exmaple, cost per install (CPI) or cost per engagement (CPE) is popular on in-app ad networks, while Apple Search Ads usually runs on a cost per tap (CPT) basis.

Of course, these are just a few types of performance marketing, and as the industry (and mobile technology) continues to evolve, we can expect to see even more advertising trends emerging.

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