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Our Blog January 11, 2024

Is Performance Marketing Right for You? We Break Down the Good and Not-So-Good.

Writen by octaadsmedia

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Performance Marketing

Marketing is a key tool to expand your business. One type, called performance marketing, has gained a lot of attention lately. Many believe that performance marketing started from a part of affiliate marketing known as “smart marketing” or “pay on results” model. This model made a lot of money for affiliates in the 2000s.

Performance Marketing

Performance marketing is a kind of advertising where the advertiser pays only when a specific goal is achieved. It’s a results-based payment method. This marketing type is a good alternative to traditional marketing methods like SMS and email marketing.

To help you build a successful digital marketing campaign, we’ll discuss the good and bad sides of performance marketing. But first, let’s understand what performance marketing really is.

Performance Marketing Definition:

Performance marketing is a digital marketing technique that focuses only on the effectiveness of a marketing campaign and its outcomes. It promotes performance and rewards accomplished customer actions. Simply said, this is sponsored advertising. Performance marketing allows the marketer to set the desired goals and pay the digital advertising platform only when those goals are met. It works similarly to sponsored adverts in that it pays for accomplished activities.
One of the most essential measures or aspects in performance marketing is the cost-to-revenue ratio. Compared to affiliate marketing, everything is quantifiable, including the activity’s performance. Performance marketing programmes must be quantifiable, optimised in real-time, and paid on a specified basis action.

The Pros of Performance marketing:

Perhaps the most significant advantage of performance marketing is that it eliminates the need to invest in advertising campaigns and other advertising methods with unknown results (such as offline marketing), and the simple measurement of ROI (return on investment) adds enormous value to your business and can be a great strategy for measuring campaign effectiveness.

Furthermore, it broadens the reach of your advertisements while also adding value and innovation. It has been shown to be beneficial since it expedites the advertising process; within a few days, your ad may appear anywhere online, in any vertical, and on any app or website.

You can collaborate or operate independently with other digital advertising platforms like Google, Facebook, Twitter, and so on. It is less expensive to sign up with an agency to handle your marketing than it is to establish your own staff and business.

Performance marketing’s drawbacks However, not everything is as it seems. One of the main drawbacks of performance marketing is fraud in many forms, including fake events, bots, and SDK spoofing. This is an external problem rather than an intrinsic one. People will always look for quick ways to make money if there is money present. Businesses and marketers get together to attempt to eliminate this significant barrier.

Misinterpretation of the data is another problem. It can lead to irrational financial projections, and inadequate research can make things worse for you.

Certain businesses in the industry demand prepayment, which implies you would pay for results before you can determine whether they are effective rather than after. This could lead to problems if you’re paying for fraud or incorrectly interpreting the data. For this reason, many businesses decline to accept a prepayment.

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