Ultimate Guide to Performance Marketing
You may have heard the term “performance marketing” come up in a conversation about achieving new growth goals if you’re a brand in growth mode, or perhaps you’re a creator hearing this concept for the first time. Now more than ever before, it’s crucial to understand the different ways brands and businesses are reaching their audience and the partnership models between brands, agencies, content creators and other publishers. When pursuing a marketing strategy, it’s imperative that businesses choose a growth model that drives results and hits goals. While this may be the wish of any marketing strategy, performance marketing ensures that creators and brands spend on marketing strategies that work for them, while oftentimes also reaping the words of relationship building and branding.
What is Performance Marketing?
In its most simple form, performance marketing is marketing or advertising where a brand pays for, and in our case a creator is paid for, specific and measurable results. These results can include CPA (cost per acquisition), CPC (cost per click), and CPM (cost per impression), amongst other forms of performance based tracking. Many brands and creators prefer performance marketing over different methods of online marketing seen today as it ensures that businesses are only paying for marketing that works and content that is driving action from their consumers.
Performance Marketing vs. Affiliate Marketing
Within the last decade as social media has boomed, affiliate marketing has become increasingly popular with brands, agencies, creators and other publishers. In fact since 2015, revenue from affiliate marketing programs has consistently grown by 10% annually (Business Insider).
Affiliate marketing is executed when a brand or creator is given a unique code or URL that offers their following a discounted price on an item or service, in which they receive a commission from any purchases made. In this way, affiliate marketing falls under the umbrella of performance marketing, as an action is taking place with a unique code or URL.
With this being said, not all performance marketing is affiliate-based. For example, some performance marketing deals prosper from clicks, engagement, and impressions alone, instead of a complete purchase via an affiliate link or code. Many agencies specialize in performance marketing across a number of marketing channels such as Facebook, Google Search, Reddit or Quora. At InfluenceLogic, we do some of this for our clients at times, while our focus remains on the influencer and creator channel.
Why it Works for Creators
While larger creators and influencers prefer receiving upfront rates, and many talent agencies demand up front guaranteed payments, many up-and-coming creators and even world-renowned influencers have begun to lean into performance and affiliate marketing for their monetization. This ranges from using the model to promote their use of products that they love (Amazon’s affiliate program is very popular for this). But more than that, creators are partnering with brands on a performance basis for deeper, more meaningful partnerships. These partnerships can also last a very long time. Some of the partnerships we have facilitated at InfluenceLogic have lasted over four years and are still growing strong!
Industry experts also find a lot of benefits in the performance marketing model. Creators and influencers varying from makeup artists to rugged outdoorsmen and women have thousands of individuals in their following who are interested in learning from who they see as the best in their field, and attaining the products to participate in the positive experience shared by such creators themselves.
In this way, performance and affiliate marketing works beautifully for creators and influencers as they are given the opportunity to align with products and services they thoroughly enjoy and share their positive experiences with their following in which they have strong relationships. This in turn brings profit to both the creator and the brands they work with, and a win-win-win partnership is formed where the creator, brand, and consumer are left satisfied.
Unlimited revenue is yet another large draw to performance and affiliate marketing, as growth and revenue is uncapped. So long as the creator’s performance marketing content is receiving consistent traction from their consumers, creators and influencers will thrive endlessly and grow in scale, practically in their sleep.
Performance marketing based online and on social media is also widely accessible, which in turn removes any friction that prevents great partnerships and relevant, revenue-earning opportunities.
This year as individuals have been forced to isolate due to the pandemic, social media has proven to be a wonderful way to stay connected and create a sense of community, even from different corners of the world. Inspiration is lacking for individuals across the globe, and consumers are turning to influencers and creators now more than ever for motivation and encouragement, in turn creating more sales for influencers and creators. In a study by FirstSiteGuide, 35% of bloggers actually reported a revenue increase due to the COVID-19 pandemic.
How is it Measured?
Unlike other forms of online marketing, performance marketing is measured in engagement and action taken with any piece of content from a marketing campaign. This differs from other forms of online marketing as direct sales are not the only concept necessary in measuring a marketing campaign’s success.
The way that performance marketing is measured is through a software system designed for what’s known as “attribution.” There are a number of attribution software providers out there such as Impact Radius and HasOffers, and some of these platforms also have marketplaces for publishers to access opportunities. At InfluenceLogic, we partner with a number of different attribution software providers and we connect them all into our proprietary portal for creators to engage with especially impactful brands. Our creators get unique URLs on behalf of the brand partnership programs they are enrolled in and the creator can track all of his or her activity, sales and earnings within our system. Oftentimes creators build very meaningful MRR (monthly recurring revenue) through our programs.
Through performance marketing, brands are able to understand more precisely which pieces of content within their marketing campaign are most effective, which draw the most attention/sales, and also recognize the content that does not. The ability to attribute sales and measure ROI is a core element that separates performance marketing and affiliate marketing from legacy media and marketing channels, and as creator / entrepreneur Gary Vee often mentions, this is a core challenge to channels like Television.
How Can a Brand or Company Get Started?
Getting started with a performance marketing plan is simple, and it all starts with finding a performance marketing agency that will be transparent in their own goals as a company, and with the brands and creators they work with.
This type of marketing is a strong choice for any brand or influencer looking to grow their business through engaging with their following or target audience, and InfluenceLogic prioritizes these relationships and their prosperity long-term.
InfluenceLogic steps in and handles performance marketing campaigns from start to finish for both brands and creators. The process starts with a one on one consultation regarding just what they seek to gain from a performance marketing campaign, and from there we create a game plan that honors the brand’s or creator’s vision. We have team members dedicated to walking both brands and creators through the process every step of the way and our ultimate goal of forging win / win partnerships that drive meaningful outcomes for all parties involved.
You can learn more about how InfluenceLogic can assist in your endeavors here if you are a creator and here if you are a brand.