What is Performance Marketing

On November 2021 Google announced it was replacing Local Campaigns and Smart Shopping with Performance Max. Google explains the new program as a way for “performance advertisers” to access all of their ads inventory from a single campaign. Wait a minute, what is performance marketing and advertising?  If your ecommerce store ventured outside of social media or email marketing, the first stop was probably Google Ads the most popular performance marketing platform.

For fiscal year 2021, Google advertising grew 42.5% year over year compared to 2020. What makes Google Ads so popular? In a nutshell, the answer is the essence of performance marketing. The platform, launched way back in the year 2000, provides advertisers with a way to measure ROI through clicks and conversions. Today, regardless of the platform the language sits within a few key metrics: CPM, cost per 1,000 impressions; CPC, cost per click; CPA, cost per action; and LTV, lifetime value.

Affiliate Marketing or Performance Marketing?

First, affiliate marketing remains popular today as a type, or subset, of performance marketing. Affiliate marketing matured early in the digital age but the days of cash-back specials and coupon sites are now its savvier big brother’s realm. You will still find affiliate marketing a useful concept as its context has grown to include influencer marketing, native advertisers, mobile apps, paid search and email marketing.  Today, performance marketing uses the affiliated brand and product marketing concept to drive sales, customer acquisitions and market expansion.

Starting a Campaign

In addition to affiliate marketing it’s critical to remember that performance marketing is an umbrella term. There are advertisers who target merchants and retailers but the field is made up of a matrix of networks, publishers and outsourced program managers (OPMs). Defining goals is the first part of your performance marketing campaign. Next, pick which channels to focus on. Then choose your target audience.  If you have questions about which software platforms can work best with fulfillment services,  please be in touch with any questions!