Performance marketing is a relatively new term in the marketing world which is often confused with affiliate marketing. However, affiliate marketing is part of the performance marketing concept. The “performance” is counted to focus and optimize metrics such as “ CPL, CPC and CPA”. Unlike in traditional advertising where the marketer pays a certain amount of money for their campaigns upfront, in performance marketing, campaigns are optimized as you go along and the payment is only made if an ad was successful and achieved the objective.
Performance marketing has started to be favoured by many CMOs since it enables transparency in marketing campaign efficiencies & spendings and a better understanding of how marketing investments work.
Performance marketing is traditionally known from having clear objectives such as; CPC, CPM, CPL and CPA.
Nowadays, performance marketing is widely adopted, not only in traditional ads but also in search engine marketing (SEM), search engine optimization (SEO), display, native ads, social media marketing, email marketing and content marketing.
All these channels can be tracked and measured by their performance. Performance-driven marketing can touch various marketing channels and tactics since all of the actions can be measured and monitored.
Modern marketing analytics tools offer very detailed marketing performance monitoring that helps marketers to track each of their marketing activities.
For example, nexoya
offers such AI-based marketing performance monitoring where a marketer can track their activities by adjusting the marketing budget accordingly in order to reach the objectives. (Find an ultimate list of best AI marketing tools here
As we mentioned before, one of the most important advantages of performance marketing is that it gives you the chance to measure the performance of every marketing effort, starting from the impressions to the ROI.
It also helps to control the marketing budget and understand clearly where the money goes and what it gives in return (unlike in the old times where the effectiveness of investments in marketing could not be measured clearly). Additionally, it allows you to really optimize your marketing activities proactively - after a couple of days you already see what channel works or what media works and what not and can adjust accordingly.
But what about AI and what types of advantages does AI bring to Performance marketing?
Performance marketing has proven to be one of the favourite marketing tactics in modern times and has been adopted by many digital marketing channels. With the help of AI, performance marketing can become more effective. Let us have a look at some of the aspects of artificial intelligence that help performance marketing to deliver better results:
With the help of predictive analytics
, marketers can get an overview of future outcomes and prevent certain failures and adjust their efforts for better reach and better decision-making overall. You can act earlier and perform better.
AI enhances the personalisation of ads thanks to consumer-based repetitive behaviour-patterns and therefore improves the reach of potential prospects faster and easier. Also worth mentioning here is that thanks to AI personalization, the target audience will face fewer ads online and only see those ads that are relevant to them based on their demographics, interests and past behaviour online. Therefore, it is a win-win situation 🙂
Content marketing is one of the most important drivers of conversions today. Content creation tools based on Artificial intelligence save time and money by accelerating the time needed for you to create unique content and well-targeted assets.
With the help of AI, the marketer can receive new insights that could otherwise not be recognized. For example, in Email Marketing, AI helps to identify patterns where you can predict the amount of unsubscribes. Therefore, AI helps to increase the performance of an email marketing strategy.
Highly favoured by marketing agencies, performance marketing guarantees the attainment of objectives for both sides (agency & client).
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