Affiliate Marketing refers to the Marketing Strategy in which an affiliate i.e. a collaborator with the said company markets the company’s products through various channels online and earns a commission on whatever profit is gained out of the sale. The referrals are already set up and the number of sales made through the sales made determines the pay received by the affiliate. Performance Marketing focuses on broad areas such as improving and scaling up the online business. It does not include commission-based payouts as is the case with Affiliate Marketing. The marketer here receives his earnings when the target set for the company for that particular cycle is achieved through the strategies put in place by the performance marketer.
In conclusion, Affiliate Marketing is a subset of Performance Marketing.
How Does Performance Marketing Work?
Before we get into how performance marketing is carried out, it is important to realize its purpose. In simple terms, performance marketing is done for very specific purposes to boost customer acquisition. The interaction between the product makers and advertisers (Retailers and Merchants) and advertising companies happens based on completing specific targets- which may include particular sale numbers, ad clicks, etc.
To enable performance marketing, various hold stakes in marketing the product are involved and they mostly work collectively in stages to enable the entire process. These hold stakes are as follows:
- Retailers And Merchants – These are the main stakeholders who are the prime advertisers of the product line. They collaborate with the influencing partners (affiliates) and they relate their campaigning goals, and expectations the same. They can work along together to achieve the desired results. The payment gets processed once the affiliate achieves the goal set by the retailers/ merchants.
Fun fact: Influencer Marketing is a huge thing these days, as most people on social media are bound to make purchases from influencer recommendations. This kind of marketing, therefore, holds the capacity to drive heavy sales and ROI.
- Affiliates/ Publishers – These are the marketing associates of the brand/ merchants and can come in any form such as website coupons, embedded in Ads/ videos, etc.
They can also officially collaborate with the retailers and the brand in general, and they can work together on building trust with the customers.
This is a useful and successful marketing association as these have proven to yield great outcomes in terms of customer acquisition and retention. Customers are also happy to buy what their favorite influencers are using.
- Platforms Supporting Collaboration Between Merchants And Performance Marketers – These third-party platforms are one sure-shot way to track all the marketing and advertising campaigns carried out by the merchants/ retailers and the marketers they are working with.
This enables them to witness the metrics in real-time and can gauge the growth that way too. The entire process becomes easy and this also leads to trust between the collaborators as they can work alongside together and see the potential leads, new user interaction, and sales made through their effort too.
- Affiliate Managers – These managers are the prime link between the brand and the marketers, they help in facilitating the communication between the two and help in aligning what work needs to be done for a particular project.
These managers can either be with the brand or they can especially coordinate with an advertising agency to make a particular project happen through this kind of marketing. Before signing up with a marketing agency, it is important to keep a predefined goal and the kind of outcomes the brand would like to achieve while it works with the agency.
What Are The Benefits Of Performance Marketing?
Digital Marketing, on the whole, is seeing new heights every day and we know for sure that it will continue to keep soaring as businesses these days are shifting online to want to conquer the digital spaces. In such a case, performance marketing is one sure-shot way to go about things, and we will tell you why-
- An effective Tool – Performance marketing is establishing great names in the digital world as it is proven to be one of the most effective ways to market your product online. The results have been quite good, as it has helped the brands grow new customer base in comparatively lesser time- and the popularity of the brands has proliferated too.
- Trackable Performance – It is called ‘performance marketing for a reason. It is trackable and can show you real-time results at every step. That way, the brands know where to invest and what channels prove to be the most profitable for them.
- Cuts Down The Risk Factor – As the famous saying goes, “as you sow, so shall you reap”. The same applies here in performance marketing. It cuts down on the risk factor by heavy margins as the marketer gets paid as per the gains collected by the brand for their campaign/ particular target.
How Do You Measure Performance Marketing?
Performance marketing is a strategy specially designed to keep a track of metrics and value gained by a particular marketing campaign, or a particular project ignited by the brand to push its product range into the market. Given below are some of the key performance indicators that help in measuring the performance of marketing-
- Pay Per Sale – The most common kind of performance marketing, this is used in e-commerce websites and tells directly how much sale is made of a particular product.
- Pay Per Lead – As the name suggests, a lead is related to new customer information recorded on a google form, mailing list, etc. This enables the merchant to drive the brand sales better.
- Pay Per Click – A new click by any customer to the desired page, also commonly called referrals, also counts as one of the ways performance marketing is measured.
- Pay Per X – ‘X’ is a variable here and can be defined in any way the merchant wants- whether a click, sale, or a new lead.
- Lifetime Value – This is of the most analytical measurements employed in performance marketing to determine what the customer relationship is like with the brand based on various factors such as their associativity and the kind of activities they perform by the brand.
What Are The Most Common Types of Performance Marketing?
There lie a plethora of different marketing opportunities under one umbrella of performance marketing. For each different type of business, any one of these may be the most suitable for them.
Affiliate Marketing – Already explained in this article, this kind of marketing refers to the idea of an affiliate collaborating with the merchant and working together towards a common goal. The payout is directly proportional to the number of results achieved.
Native Advertising – The concept of feeding advertisements to the user does not look like a mainstream ad. It fits well with the kind of social media site, news channel, or any other website it is displayed on.
Sponsored Content – An extension of native advertising, it will very well merge in with the channels it is shown on- however, people will realize that it is sponsored content in some form. On popular social media platforms such as Instagram, there is a dedicated post or video of a brand that shows up on users’ feeds as ‘sponsored content.’
Social Media Marketing – A constant process (as in content creation), social media marketing is the best way to build brand awareness in the long run and create a better trustability factor.
Search Engine Optimization – One of the most common techniques in the digital world, SEO is used to configure the technicalities of the website and embed common keywords to make it more findable on search engines.
What Are Some Performance Marketing Tips to be Successful?
Here we cover some of the tips to land a successful position in performance marketing-
- Keep Yourself Updated – Since the onset of social media, trends have been changing left, right, and center as and when the wind chooses another direction. As a performance marketer looking to make a career out of social media, one must keep in touch with the latest social media trends.
- Imbibe The Strategic Skills As Similar To A Digital Marketer – As a performance marketer, it is expected of you to have your strategies for all marketing campaigns in place. Without a plan, implementing strategies can be a dangerous game, as the results will be scarce. Therefore, to drive crazy engagement, having good knowledge of strategies is a must.
- A Team Player – As a marketer, it is important to have people skills. It is also important to build networks and connections and efficiently manage them all. Being a team player is a bonus point that will help you cut into better prospects and ultimately lead you to success.
Digital Marketing is as unstoppable as it comes! Newer trends will continue to emerge in the coming times as digital evolutions continue to take place at a faster pace. Performance marketing is an exciting sub-branch of Digital marketing, and its scope will keep increasing by the day. It is important to learn the important skills and techniques used in performance marketing and execute them properly to bring out the desired results. It only comes with a considerable amount of experience. It requires patience to see results and do the kind of work that one hopes to do.
The final word: Be patient with yourself on this journey!
1. Should I Implement A Performance Marketing Plan?
Yes, as an online business, you definitely should. There is no hurdle in the digital industry and it will continue to outdo itself as time goes by. Performance marketing is as exciting as it seems on the surface. It is the best digital marketing tool for the best ROI. It will do your online business good.
2. What Is The Difference Between Performance Marketing And Digital Marketing?
Performance marketing is a subset of digital marketing. Digital marketing is mostly concerned with doing everything online. Performance marketing is getting paid only for what is achieved.
3. Can I Do Performance Marketing Myself, Or Should I Hire Outside Resources?
It is always advised to hire outside agencies who are experts and will help your brand get ahead with its expertise.
4. What Is The Difference Between Performance Marketing And Brand Marketing?
While performance marketing majorly focuses on the key indicators and can be tracked in real-time, brand marketing focuses on improving the customer perception of the brand, and the results can only be seen in the long term.