explaining the importance of performance marketing

Importance of Performance Marketing

Importance of Performance Marketing in the Digital World

Nowadays, the way of browsing and buying products by consumers has changed internet marketing forever. Digital marketing took a serious place in this period. Digital marketing is a marketing technic to find a potential customer to connect a brand product using the internet. Changing technology, consumers, channels of communication, and trends, are some factors that influence digital marketing variations in a product’s marketing. Here the importance of performance marketing took place and cover the situation with its benefits.

Performance Marketing vs Digital Marketing

Digital marketing is a method of selling products through online website channels. Marketing communication through the Internet is the main aim of this marketing. Social networking marketing, content marketing, email marketing, paid marketing, etc are some of the business techniques of digital marketing. But this marketing strategy is traditionally focused on vanity metrics, like reach, impressions, etc. Digital marketing is a long-term investment process.  Here is the importance of performance marketing strategy introduced to take a vital role, performance marketing typically focuses on short-term goals. Digital marketing is a wide area of channels and strategies and performance marketing optimizes those channels and strategies. Overall the importance of performance marketing reduces time and made effective in business growth.

What is Performance Marketing?

activities and importance of performance marketing

Simply, the connection between the digital marketer and an advertiser is performance marketing. The way a digital marketer influences his website through likes, leads, and accruing impulsive traffic to the website will increase the revenue, sales, and growth of the business owner. In the traditional way before the appearance of performance marketing, the payment was made after the advertisement. But this changed when it was introduced to the business world. Payments are made after calculating the growth of the advertisement.

For understanding the importance of performance marketing in the digital world you should know better about the benefits provided by performance marketing

Benefits of performance marketing

Measurable and Trackable 

Each transaction is based on a consumer looking for a defined action. Such as making a purchase from the advertiser or signing up for a subscription. Instead of spending money on the advertiser for the product that needs to advertise in the market. Payments are paid after the successful growth of the product. If the ads for the product generate a scale then we can able to track every click. The traceability of the performance marketing isn’t based on estimates it’s based on the actual result and effectiveness of the marketing.

Performance Marketing Improves the Advertising Reach

Performance marketing improves advertising reach. It is very helpful for promoting and marketing products and services. It increases the volume of sales when the message is targeted to specific groups.

Performance Marketing Helps to Diversify the Revenue Stream

Marketing helps to diversify the revenue stream. It is based on creativity and thereby it drives the business to increase the volume of sales. It is very helpful for adapting new methods for coordinating the activities of a business.

Affiliates add Innovation and Creativity to the Marketing

More traffic and sales lead to success and growth in business. So the company needs to try new methods in the lack of time and resources. This strategy was quick to console new trends in an aggressive and creative way by using social media. For example, conducting a campaign within one or two days that a company struggles to conduct in a week or more.

Types of Performance Marketing

Performance marketing is a part of digital marketing based on online channels’ performance. It uses online channels for marketing and sale. There are various types of performance marketing. They are search engine marketing and native advertising.

Search Engine Marketing

doing seo process for improve performance marketing

Search engine marketing is a part of performance marketing. It is the practice of marketing a business using paid advertisements shown on search engine result pages (SERPs). Google ads and Bing ads are the two primary search networks.

Native Advertising

doing native advertising for improving performance marketing

Native advertising is another form of performance marketing. It is also a form of paid advertising in which the ads match the look and feel.

How to Measure Performance Marketing?

One of the major elements of performance marketing is ROI (return or investment). KPI(key performance indicator) or performance indicator helps in performance measurement and KPI evaluates the success of performance marketing. Adding measurable ROI is a method to be successful in digital marketing, so we should track them regularly. For tracking, there are so many optimization tools available on the market. Here are some commonly used key metrics used in performance marketing:

Cost Per Mille (CPM)


cost per mille in performance marketing

CPM is a method in which advertisers pay website owners an amount for every thousand impressions on ads. It is also known as cost per thousand. The letter “M” in CPM is a Latin word that means thousands. This method is entirely based on the impressions or engagements in a particular advertisement. The impressions were not measured by the clicks on the ad it is measured by how many times the ad was displayed on a website.

Cost Per Click (CPC)

measuring performance marketing throug cost per click

Cost per click or pay per click is a method by which an advertiser gets paid when the ad is clicked. This is an advertising method used to drive traffic to the website.CPC is more effective than CPM by clicking an ad the viewer has taken an action.

Cost Per Action (CPA)

cost per action in performance marketing
CPA is a method in which an advertiser gets paid when an action occurs or is the payment done by a company when the ads result in a sale. This method is more effective for advertisers because the payment only has to be done when a specific action is taken place.


Life Time Value (LTV) 

calculating performance marketing by life time value

A customer’s LTV is the most important aspect of marketing. LTV helps a customer to determine many decisions for a company such as marketing budget, profitability, and forecasting. LTV is a method to measure gross profit that is generated from a customer over a lifetime who is doing business with a company.


A new method that turns an improvement in the marketing world is performance marketing. This article includes an introduction to the importance of performance marketing, its benefits and the value that had in our society, and the changes that bring by this marketing strategy. For more details or for those who wish to learn about this marketing strategy. Enroll a best digital marketing course Kerala, it will help you to discover the various aspects of marketing strategies and become a expert in performance marketing.