Performance Marketing
What is Performance Marketing?
Performance marketing, also known as outcome-based marketing, is a segment of digital advertising where advertisers pay only when specific actions are completed, such as leads, sales, installs, or other measurable outcomes. Unlike traditional advertising, where ad spend is based on impressions, performance marketing focuses on paying for actual performance.
What Are Types of Performance Marketing?
Cost Per Action (CPA): Advertisers pay when a user completes a specific action.
Cost Per Click (CPC): Advertisers pay when a user clicks on their ad. This is a hybrid form of traditional and performance marketing.
Cost Per Engagement (CPE): Advertisers pay as a user completes a series of deeper engagement actions.
Cost Per Install (CPI): Advertisers pay when a user installs their app.
Cost Per Lead (CPL): Advertisers pay for each lead generated.
Cost Per Sale (CPS): Advertisers pay for each sale generated.
Cost Per View (CPV): Advertisers pay when a user more deeply engages with their ad. This is a hybrid form of traditional and performance marketing.
Why is Performance Marketing an Important Part of Any Marketing Plan?
Performance marketing is a cost effective way to reach engaged users and customers to a brand. By paying only for measurable outcomes, this strategy provides shared accountability between performance-based ad networks and advertisers. During times of economic recession, performance-based marketing can significantly outperform traditional advertising and drive return on ad spend (ROAS).