Performance Marketing: Definition and Benefits

What is performance marketing?

Performance marketing, also known as results-based marketing, refers to advertisers receiving a reward when they achieve significant business goals.

As the name suggests, this type of marketing is based on performance, and advertisers pay when a specific action is completed, rather than paying for impressions or clicks. It is linked to specific business conversions and overall commercial performance.

The most common objectives are usually related to eliciting a response from the target audience, such as downloading an ebook, subscribing to a newsletter, generating a sale, making a call, or filling out a form, among others.

What are the benefits of performance marketing?

Executing performance marketing campaigns has many benefits that will undoubtedly help you optimize your business.

  • Easily trackable performance

The main benefit of performance marketing is that it is 100% measurable. Thanks to new technology and advanced advertising platforms, all metrics of your campaign can be tracked.

  • Focuses on ROI (Return on Investment)

Performance marketing focuses on ROI, a key point for the success of your digital marketing.

If you’re wondering what ROI is, it’s the primary indicator of your investment’s performance, as it measures the profit you gain in relation to the investment you make. ROI will be your best ally in determining whether your campaign performed well or not.

The formula to obtain ROI is as follows:

ROI = [(revenue – costs) / costs] x 100

ROI is measured in percentage; if the value is positive, it means you gained economic benefits from your investment. But if it is less than or equal to zero, your investment is losing money.

  • Low risk

With lower risk, performance marketing allows advertisers to launch more quickly. No more pressure to get approvals!

If you want to achieve results in your digital marketing campaigns and don’t know how, seek advice from an expert!

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