Nowadays, businesses have a lot of different marketing options to promote their products and services. However, traditional marketing techniques are not only expensive but the effect of such an expensive marketing campaign for the product is uncertain. Digital, and especially performance marketing, is a great way to enhance brand awareness, build reputation, and generate more sales in a better, efficient, and more cost-effective manner.
In this kind of marketing strategy, only those who are likely to buy your products are targeted. This approach ensures that the advertisement campaign is focused on some people only and not spread across the channels. This, in turn, reduces the overall campaign cost significantly. Another aspect of the performance marketing is that the company pays the advertisement company only for leads, any executed action, sales and clicks. This ensures that the company is only paying for the positive returns.
Performance marketing helps businesses in four different ways.
- Cost per thousand (CPM): In this type of advertisement technique an advertiser buys advertisement space across various platforms for a certain amount of money which he has to pay per 1000 views of that advertisement. The views are generated when an advertisement is displayed on the web pages of specific marketing channels that are selected by the advertiser.
- Cost per click (CPC): While the CPM method gives an advertiser greater visibility, it is not necessary that it also improves the conversion rate. To improve upon the CPM methodology, advertisers are turning towards the CPC form of advertising. In this form of advertising, the CPC advertisers are paid depending on how many visitors clicked on the advertisement. The rate of CPC is not the same across different platforms.
- Cost per lead (CPL): This is more comprehensive than the CPC advertising techniques where you have to pay depending on the number of clicks your advertisement gets. The cost per lead make sure that it gets additional data from the visitor for which they have to fill in a form sharing their email address and so on. This data is then used by the data mining companies to formulate a more targeted advertising campaign.
- Cost per acquisition (CPA): This is one of the most effective ways to sell your product. Here the company makes a payment only when a new purchase is made by the visitor following the advertisement. Until the transaction is completed there is no payment made by the advertiser. Thanks to its extreme performance based approach, the CPA is the most expensive form of an advertisement among the four that are mentioned here.
Performance marketing ensures that your efforts are targeted for maximum impact, while it also saves you from investing in those areas that are less likely to produce results. Clearly, not many marketing practices can guarantee success like performance marketing does.