Why Everybody Wins with Performance Marketing
When it comes to spending money on marketing and advertising efforts, what is the one thing that everybody is looking for? Results. They want to be able to see tangible results from their marketing spend. So how can a marketing company guarantee results for each dollar the client shells out? Performance marketing.
When utilizing a performance marketing campaign, clients only incur an expense when a specified result is achieved. This expense is typically a set dollar amount per action or a share of revenue per sale, which is far more efficient than simply hoping a traditional marketing spend is successful. What is even better is that the client can clearly see their return on investment (ROI). The ability to monitor performance marketing instills a sense of security and satisfaction.
Let’s take a flower shop with a $5000 monthly advertising budget. With traditional marketing, they would most likely split this spend across several media options. This may include TV spots, outdoor billboards, online banner ads, a sign spinner outside of the shop, etc. While this diversified marketing plan may reach the intended audience, it may or may not be effective. Even if it produces results, it is difficult for the flower shop to accurately determine which source brought in the new customers and which source was simply a waste. On the other hand, with performance marketing, the flower shop would see guaranteed tangible results from the $5000 spend. Their marketing company could suggest offering a $5 off coupon to potential customers via a targeted e-mail list. For every coupon downloaded (the specified result), the flower shop would pay the marketing company $5 (the set dollar amount per action). Therefore, each coupon transaction would cost the flower shop $10, meaning their $5000 budget would draw up to 500 customers. Plus, it is easy to track which customers made a purchase as a result of the coupon.
While there are many justifications for clients to implement a performance marketing campaign, here is a look at just four convincing reasons.
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PERFORMANCE MARKETING
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TRADITIONAL MARKETING
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| Faster implementation | Requires more time to set in motion |
| Less risk for the client | Increased risk on the client side |
| Easy to monitor | Difficult to accurately track |
| Guaranteed ROI | No guarantees |
The benefits are evident, and with all the risk and responsibility on the marketing company, clients can rest assured that their hard earn dollars are only being spent if a successful marketing strategy is deployed and produces results. It is a win win situation.
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