What is performance marketing?

Performance marketing differs from traditional marketing in that its costs can be flexible and depends on the overall success or failure of an advertisement or an ad campaign.

Traditional marketing sees merchants and retailers paying for their advertisements at a fixed price, and it does not matter how the ads or campaigns perform overall.

Performance marketing strategies often cooperate with several groups, hosts, and payment models. Here are five common components of performance marketing:

• Retailers or merchants. These companies seek to advertise their products or services. Organizations in this category can come from any industry if they offer a product or service they want to market to a target audience.

• Publishers. Publishers fall into the category of affiliates. These companies partner with retailers or merchants to help them advertise. Publishers can also come in several forms, such as social media influencers, phone apps, review sites, or online blogs.

• Platforms for performance marketing. Different platforms include social media websites, online sales or e-commerce, search engines, and traditional websites. Both retailers and publishers utilize these platforms to get content or ads in front of specific audiences.

• Affiliate networks. Affiliate networks take the form of third-party tracking platforms. They assist retailers, publishers, and hosting sites in evaluating the overall success of advertisements or campaigns. Certain brands elect to work with particular agencies that handle all the tracking of this very important data.

• Payment models. There are three main payment models in performance marketing, these include:

  • Pay per click

  • Pay per lead

  • Pay per sale

  These determine how much money the retailer will pay for their performance marketing.