What is performance marketing? A quick guide on the key elements of a good performance marketing strategy.


Rajesh O

Sr. Manager - Digital Marketing

https://www.brandxt.com/services/digital-marketing-servicesWhat is performance marketing?

Performance marketing is a term that has gained a lot of traction in the recent times. Gone are the days when companies used digital marketing as a tool for online presence or just to create brand awareness. Now, with increased focus on ROI, organizations want to leverage online marketing to gain more mileage for the marketing spend.

What is Performance Marketing?

Performance marketing is a type of online marketing or promotional and advertising programs in which the advertisers pay based on the occurrence of specific actions such as clicks, registrations, form-fills, downloads, sales, etc.

Performance marketing professionals mostly leverage paid marketing channels including:

  • Search engine marketing
  • Native advertising
  • Sponsored advertising
  • Social media advertising
  • Affiliate marketing

So how does performance marketing work?

As you know that each advertising platform has its own specific audience and these audiences display their intent, interest, and characteristics in unique ways on each platform. For example, on Google search, users display their intent through the keywords that they type-in or their search queries. On Facebook, users display their interest and demographics through the details that they fill in their profile page and through the pages they follow or content they consume. Hence when you, as a marketer, approach these channels to promote your products or services, these channels offer you targeting parameters to precisely connect and engage with your target audience.

While running promotional campaigns on those platforms, these are some of the factors that come into play:

Target audience and segmentation

Each platform offers you different ways to target the right audience.


It is the amount you agree to pay for displaying your ads to your target audience. The bidding systems have now evolved from manual to programmatic in the modern marketing landscape

Quality and relevance

Most platforms are now emphasizing on the quality of your ad and its relevance to their audience. Bad quality ads go down in priority and end up giving bad results.


Unless you are looking only for brand awareness, this is one of the most important factor for you, as a marketer. It is the goal or outcome you are seeking from all your marketing efforts.

As a performance marketer, you need to first understand and decide the final action or goal for which you want to pay the publisher or the platform. Some of the terms related to how you want to pay are as follows:

Cost Per Impression (CPM)

The amount an advertiser pays a publisher per one thousand times of their ad is shown.

Cost Per Click (CPC)

The amount an advertiser pays only when their ad is clicked on.

Cost Per Leads (CPL)

The amount an advertiser pays when they receive a sign-up or registration through their ad.

Cost Per Sales (CPS)

The amount an advertiser pays only when a sale is directly generated by an ad.

Cost Per Acquisition (CPA)

The amount an advertiser pays when a specific action, such as a sale or a form completion, happens.

Considering your target audience, the goal or the ‘action’ you want from your audience, and the overall marketing budget, you need to decide the right performance marketing channel. Here are some of the channels that you should consider for your performance marketing campaigns:

1. Search Engine Marketing

Paid campaigns on google search are extremely powerful and relevant channel for a performance marketing campaign. The audience using google search clearly are looking for that product or service they are searching for. They could be researching for the product or trying to gain an understanding of the options that they have. Though they might have already finalised their choice of product, they might be trying to find out the appropriate purchasing platform. Nevertheless, it becomes crucial for you, as a brand, to be present when the audience is searching. It is very important for a marketer to understand the user intent, come up with the most relevant set of keywords, create a compelling ad copy in line with the user queries and give them a good offer to ensure the user clicks on the ad and visits your landing page. Search campaigns demand continuous monitoring, clever bidding and regular optimizations to achieve good results. You can always bank on good performance marketing agencies to help to achieve better ROI on your marketing spend.

2. Native advertising

With over exposure to advertisements and promotions, audience have slowly started having a blind-spot for promotional messages and banners. There are also filters like ad-blockers in place to cut out ads. This is where native advertising comes into play. In native advertising, the promotional messages or ads are placed in a way that it does not obstruct the user experience and seamlessly blends with the overall content of the website. Often native advertising has been found to receive 10x more clicks than other forms of online advertising. The key to achieve success in native advertising is to offer quality content that provides value to the audience and leverages the right distribution channel.

Content discovery platforms such as Taboola offer advanced predictive engines that use huge volumes of data to match viewers with content they are likely to be interested in. Hence, to succeed, you need to define your goals clearly, create relevant content, filter and select your audience and keep fine tuning your campaign regularly.

3. Sponsored content

Just like content discovery, sponsored articles are another form of native advertising. Sponsored articles can drive qualified traffic and increase visibility in front of a highly targeted audience. If you have educational, long form content that you can leverage to influence your target audience, make sure you use sponsored content in your performance marketing plan.

4. Social media advertising

We all know that achieving measurable results with organic reach of the social media networks is an unlikely scenario. Hence, it becomes important for brands to spend money on social media advertising as part of their performance marketing programs. Social media advertising platforms offer clear and more precise audience targeting features. You can leverage social media advertising to achieve objectives like driving traffic, audience engagement, lead generation, sales, etc.

The most performing social networks currently include Facebook, Instagram, Twitter, LinkedIn, YouTube, Snapchat, and Pinterest. Choosing the right social network is extremely important. You will have to consider factors like the demographics of the audience, your experience on the platform for your organic efforts, your competitor’s strategy, right ad format, etc.

To achieve success in your performance marketing campaigns, make sure you create specific target audience by leveraging the various targeting parameters and narrowing down to your most potential audience type. Follow this up with creating ads that blend with the platform. You can also experiment with your bid strategy. In addition, you should also consider refreshing your ads and landing pages regularly.

5. Affiliate marketing

Affiliate marketing is an established form of performance marketing. In this format, a publisher becomes an affiliate by establishing a relationship with an advertiser to produce traffic and sales (or an agreed action).

Affiliates send traffic to advertisers and receive a commission in exchange for an agreed upon action (a sale, in most cases). Make sure you choose an affiliate partner wisely.

Performance marketing is a great strategy when you have clear goals to achieve and you want to achieve them fast. However, it takes an in-depth understanding of various channels to ensure you create the right mix and make optimum use of the specific benefits of each platform.

If in doubt, don’t hesitate to reach out to your agency partners to help you achieve your objectives.

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