Marketing is one of the most important pillars in the whole trade process, the concept of performance marketing has spread in the field of e-commerce, marketers pay attention to marketing in their marketing activities, companies and agencies seek to adopt it in the marketing plan required by marketers, because it is one of the most important marketing strategies for success, guaranteeing good sales in most cases.
As the e-commerce market is growing day by day, there is a need to explain new concepts like performance marketing, and what the difference is, this study makes you as an organization owner, seek to request and adopt it while planning to market your products electronically and make marketers see it as a lucrative deal as well.
Definition of Performance Marketing
In general, marketing is the means of connecting the products and services you have to offer with customers who want and need such products and services, it is one of the most important factors in the trade process and it is divided into several types including performance marketing.
Performance marketing is a general marketing term that refers to a marketing and advertising program for a product or a group of products over the Internet, in which an agreement is made between an advertiser (also known as a retailer or merchant) and a marketing company (also known as an affiliate or publisher) that payment is made when a specific action (such as a sale or purchase occurs, or an e-store page reaches a certain number of clicks or impressions on search engines) is completed, which means that the marketing process is achieving results.
Types of Performance Marketing
Performance marketing is the combination of advertising and innovation that helps retailers and affiliates grow their business in ever-changing ways. Events are highly specific to each retailer and designed to make everyone successful. Proper performance marketing creates win-win opportunities for both retailers and affiliates.
Modern companies follow four main categories of performance marketing, as follows:
1. Advertise via social media
Social media advertising involves placing ads on popular sites like Facebook, Instagram, and LinkedIn. These campaigns are usually structured in such a way that at least one campaign is aimed at attracting new users (called leads) and at least one campaign is aimed at attracting users who have already visited their site but have not yet converted (called redirects).
Of course, not all social media ads are performance marketing when not used to increase conversions, as they can also be used for branding or market validation.
(Related article: E-Marketing via Social Media in E-Commerce Projects)
2. Search Engine Marketing (SEM)
Search engine marketing is the concept of running an advertising campaign to drive traffic from search engines like Google or Bing. These campaigns are often organized by the type of search they target, for example, a company might run campaigns targeting the types of products it sells, competing brands, and private labels.
Search engine marketing is almost always performance marketing in nature and is completely separate from search engine optimization (SEO).
(Related article: SEM in Ecommerce Projects)
3. Influencer Marketing
Historically, influencer marketing has not always been thought of as performance marketing, but that has changed in recent years as influencers and celebrities have become more business-savvy and the growth of influencer management tools like Gatsby and influencer partnership platforms has allowed brands to properly track and iterate on their influencer partnerships so their performance drives sales.
(Related article: Influencer Marketing for Ecommerce Businesses)
4. Original Advertising or Sponsored Content
It’s similar to influencer marketing, but instead of paying influencers to talk about your brand, you pay to publish posts to write about your brand, and as a marketer, you have a high degree of creative control over the content they post for you.
Some publications call this native advertising, others call it sponsored content, but the strategy is the same, note that publications in most countries have regulatory requirements to disclose sponsored content.
(Related article: The Importance of Sponsored Ads for Online Stores)
What doesn’t performance marketing include?
Performance marketing is just a subset of digital marketing, but not all types of digital marketing, or even digital advertising, are performance marketing. Here are some other common types of marketing that may be confused with performance marketing:
1. Brand Marketing
The primary goal of brand marketing is not to measure, but to communicate the brand’s message, feel or experience. For example, a big brand might run a social ad that mirrors the message of its TV ad. While marketers can track the results of brand marketing campaigns, unlike performance marketing, the goal is not to optimize measurable results.
(Related article: Why is Branding One of the Most Important Assets in Ecommerce?)
2. Affiliate or commission marketing
Affiliate marketing may look similar to performance marketing at first glance: it’s highly trackable and you can make decisions based on performance, but with one fundamental difference:
- Performance marketing is proactive: you continually create and iterate marketing campaigns to reach your audience.
- Affiliate marketing is passive: you simply set the parameters of who qualifies as an affiliate member and how much you will pay your clients. Affiliates can even run high-performance marketing campaigns for you.
(related articles: Affiliate Marketing in Ecommerce Projects
Check out the eCommerce marketplace
Performance marketing works best when you have identified a need for your product and know who your customers are, in other words, going from 5,000 riyals in sales to 500,000 riyals per month.
If you’re just starting out and trying to get your first customers, optimizing for cost per result may not be the best option for your business. Digital advertising can certainly be used to check indicators of market health, but campaigns should be based on a battery of scientific tests rather than blindly chasing results.
How does performance marketing differ from other digital marketing efforts in eCommerce?
Performance marketing has many advantages that make it different from conventional marketing methods, including:
- Unlike other traditional advertising marketing methods, performance marketing business owners only pay for successful deals, ensuring a higher percentage of profits at a lower cost.
- Performance marketing successfully reverses the traditional value proposition of advertising and also allows real-time measurement of return on investment.
- Performance marketing ensures that the affiliate marketer or marketer strives to better reach the target audience in order to achieve a sale or a certain number of impressions to secure a deal for them, which contributes to a greater degree of spread of the brand or product among the audience.
at last;Performance marketing (or performance marketing) is one of the many digital marketing strategies that we can apply to promote our e-commerce projects, but we must first research all the options and choose the right one.