Skip to main content

Performance Marketing

Performance Marketing

Performance marketing refers to a form of digital marketing in which brands only pay marketing service providers after their business objectives have been met or when specific actions have been taken, such as a click, sale, or lead. In other words, it is performance-based marketing.

Brand marketing vs Performance Marketing

Brand marketing is focused on building awareness and creating an emotional connection with the customer. Performance marketing, on the other hand, is focused on generating leads and sales.

How it works?

Advertisers put their ads on a given channel:

1. Cost Per Click (CPC)

Advertisers pay based on the number of times their ad is clicked on.

This is currently the most common tool; the product owner pays the website or host every time someone clicks on an advertisement banner.
The cost per click is defined according to keywords and success rate. A keyword is used for a search; its rate is assessed according to its success. For example, the keyword «real estate» will be more expensive than «opossum.»

CPC = what you pay to get a click on your ad

How to calculate the CPC?
CPC = Total spending / Number of clicks

2. Cost Per Impression (CPM)

Impressions are essentially views of your ad. With CPM, you pay for every thousand views.

The most basic tool is CPM, cost per thousand of impressions, or how much it costs to have an ad published a thousand times on the Internet, and seen by users.

CPM is used by publishers to show their pricing to advertisers. It allows you to compare different offers.
 CPM = the cost of showing your ad 1000 times

How to calculate the CPM?
 CPM = Total spending / Number of impressions

3. Cost Per Sales (CPS)

With CPS, you only pay when you make a sale that was driven by an ad. (commonly used in affiliate marketing)

4. Cost Per Leads (CPL)

Much like cost per sale, with CPL you pay when someone signs up for something, like an email newsletter or webinar.


CTR (Click through Rate)

When CPM and CPC indicate the cost of advertising, CTR measures its efficiency. The number of clicks can be skewed by the number of impressions: an ad that is published more times will have more chances of getting clicks. By dividing these numbers, one obtains an efficiency percentage that is more relevant to the ad: the number of clicks in relation to the number of impressions.

CTR = percentage of clicks per impression

How to calculate the CTR?
CTR = (Total clicks / Number of impressions) x 100

Types of Performance Marketing Channels

1. Banner (Display) Ads

2. Native Advertising

Native advertising works because it allows your sponsored content to live seamlessly beside other kinds of organic content. For example, sponsored videos appears in YouTube.

3. Content Marketing

A type of marketing that involves the creation and sharing of online material (such as videos, blogs, and social media posts) that does not explicitly promote a brand but is intended to stimulate interest in its products or services.

https://www.thedigitalorbis.com/2023/05/content-marketing-digital-marketing.html

4. Social Media Marketing https://www.thedigitalorbis.com/2023/01/social-media-marketing-digital-marketing.html

5. Search Engine Marketing (SEM) https://www.thedigitalorbis.com/2023/08/search-engine-marketing-sem.html

Labels:

Comments

Post a Comment

Popular posts from this blog

Product Roadmap - Key things

What is a Product Roadmap? A product roadmap is a plan of action for how a product or solution will evolve over time . Product owners use roadmaps to outline future product functionality and when new features will be released. A product roadmap is a shared source of truth that outlines the vision, direction, priorities, and progress of a product over time. It's a plan of action that aligns the organization around short and long-term goals for the product or project, and how they will be achieved. Key Things In A Product Roadmap Prod uct Vision This is critical as it sets your company on the path to creating a specific product strategy. It is the vision of what is desired and the potential that it has to be a great product. This initial vision doesn’t have to be the final one but it starts the process of building a product roadmap so that further planning can continue. This spells out what you want your product to be at the end of the project. Strategy This is the case you build...
Post a Comment
Read more

Product Lifecycle Management PLM

Product Lifecycle A product life cycle is the length of time from a product first being introduced to consumers until it is removed from the market .  The concept of product life cycle helps inform  business decision-making , from  pricing and promotion  to  expansion or cost-cutting . (advertising, reduce prices, expand to new markets, or redesign packaging.) A company often incurs higher marketing costs when introducing a product to the market but experiences higher sales as product adoption grows. Sales stabilize and peak when the product's adoption matures, though competition and obsolescence may cause its decline. A product's life cycle is usually broken down into four stages;  introduction ,   growth ,   maturity , and   decline . Product Life Cycle 1. Introduction Stage The introduction phase is the first time customers are introduced to the new product. A product begins with an idea, and within the confines of ...
Post a Comment
Read more

Property Management System

A PMS is a software application used by businesses like hotels, rental properties, and other accommodation providers to manage daily operations, reservations, guest data, and more. The PMS itself can be either on-premise (installed on local servers) or cloud-based (accessed via the internet). Key Functions of a PMS: Reservation Management: Handles online and offline bookings, manages room availability, and prevents overbookings. Guest Management: Stores guest information, tracks preferences, and facilitates communication. Check-in/Check-out: Streamlines the process of guest arrivals and departures, including room assignments and billing. Room Management: Tracks room status, maintenance schedules, and inventory. Billing and Payments: Processes payments, generates invoices, and manages financial transactions. Housekeeping Management: Schedules and tracks housekeeping tasks, ensuring rooms are ready for new guests. Reporting and Analytics: Provides insights into property ...
Post a Comment
Read more