Performance Marketing is as it sounds – marketing based on performance. This performance can be an array of executed desired results, such a completed lead, sale, booking or download.This win-win marketing opportunity for a retailer or “merchant” and affiliate or “publisher” allows both parties to truly target campaigns in a strategic, high ROI way, all based on performance. By paying the affiliate or publisher when a specific action is completed, a merchant can feel confident that their money is being well spent since they are already converting their target audience before they pay for the transaction.
A comprehensive term, Performance Marketing is a combination of paid advertising and brand marketing put together, but only paid out once the completed desired action takes place
Is Affiliate Marketing the Same as Performance Marketing?
is both a term that is interchangeable with Performance Marketing, and a piece of a larger “performance marketing” umbrella, which includes Influencer Marketing, Email Marketing, Search Marketing, and any other form of marketing where the marketing partner exchanges sales (or completed desired actions) for commission payouts. In this model, the most valuable KPIs are credited and paid out
In this model, the most valuable KPIs are credited and paid out based on defined performance metrics.
“Affiliate Marketing” is the term that originated before Performance Marketing, and is still used today. However, over the years it has become a term that implies a much larger picture of performance-based marketing outside of traditional coupon and loyalty partnerships to include social influencers, native advertisers, mobile app developers, geo-targeting paid search partners, email marketers, and more..
“Affiliate Marketing” is the term that originated before Performance Marketing, and is still used today. However, over the years it has become a term that implies a much larger picture of performance-based marketing outside of traditional coupon and loyalty partnerships to include social influencers, native advertisers, mobile app developers, geo-targeting paid search partners, email marketers, and more. Affiliate Marketing, as it sounds, is affiliated brand and product marketing, which has grown into a more innovative, dedicated performance-based strategy that has become a driving force to incremental sales, new customer acquisitions, market expansion, customer segmentation targeting, and high ROI campaigns.
“Performance Marketing”, which includes the more traditional “affiliate marketing” that is historically known for driving sales through cashback and coupon sites alone, has become so much more over the past few years.
How Does Performance Marketing Work?
Performance Marketing consists of four groups: Retailers or “Merchants”, Affiliates or “Publishers”, Affiliate Networks and Third-Party Tracking Platforms, and Affiliate Managers or “OPMs” (Affiliate Management Companies).
1. Retailers or “Merchants”
Also known as Advertisers, these are the businesses that are looking to promote their products and services through Affiliate Partners or “Publishers”. Retailers and ecommerce companies in various verticals such as fashion and apparel, food and beverage, health and beauty products, and sporting goods can be very successful in the Performance Marketing.
The affiliate programs that do the best in Performance Marketing are usually those who have an already established brand online or a presence in several marketing channels with an already engaged audience, and their website has a minimum proven conversation rate that can help them. These programs have affiliate partners that produce a positive ROI in exchange for marketing efforts, traffic generation, and exposure
2. Affiliates or “Publishers”
This group is considered the “marketing partners” of the Performance Marketing space. Affiliates or Publishers come in many forms: coupon websites, loyalty and cashback websites, product review sites, blogs, online magazine, and so on.However, with Affiliate Marketing moving more towards an all-encompassing Performance Marketing model which includes social influencers, content sites, product review sites, mobile apps, personalization applications, artificial intelligence, complimentary merchant partnerships, and remarketing ad managers, there needs to be a strategy and understanding of what each of these marketing partners need from a merchant to be successful. Influencers, as an example, are publishers that mainly promote through their blogs, social groups, and social channels
3. Affiliate Networks and Third-Party Tracking Platforms:
Affiliate networks or “third-party tracking platforms” are essential to the merchant/affiliate partnership. They offer a one-stop shop for information and tools such as banners, text links, product feeds, promotions and payouts (like a bank).For both the merchant and affiliate, these networks and platforms are a way to keep track of leads, clicks, and conversions. Some examples of leading affiliate networks and tracking platforms within the Performance Marketing industry are Partnerize, Commission Junction, AWIN, Impact, HasOffers, Avantlink, PepperJam and Rakuten Marketing
4. Affiliate Managers or OPMs (Outsourced Program Management Companies):
Affiliate managers, or affiliate management agencies (OPMs), are considered the main driver between the merchant and affiliate. While affiliate managers can be in-house, brands might also choose to work with agencies to either manage the entire program or support the in-house team, due to their expertise and an existing network of affiliate partners.Some merchants decide to give their program to an experienced agency to manage 100%, while others engage with agencies to work in conjunction with their in-house team. These types of agency partnerships are beneficial because often in-house teams have limited resources, expertise, existing affiliate relationships, and limited market reach, so working with an agency can help fill these gaps and drive much faster results
5. Pay Per Sale / CPA (Cost Per Acquisition)
Exactly as it sounds, this is an arrangement where a retailer or merchant pays an affiliate or publisher for sales they generate once the transaction is complete. In ecommerce, this is the most common payment model for merchants to set up
Pay Per Lead
A “lead” is typically a completed form registration or signup involving information given by the user or consumer about themselves and is usually a non-cash conversion. This could include the customer’s name, email address, phone number, household income, personality traits, job information, and so on.
Pay Per Click
In this payment model, a retailer will pay an affiliate for any clicks they refer to a desired landing page. This model is less used in the performance marketing world and is generally used only when Nexus applies
Pay Per ‘X’
In this payment model, the ‘X’ can represent whatever the merchant defines as the desired action outside of a lead, click, or sale. Downloads, upsells within apps, and rewards program sign-ups are examples of these.
Working with an experienced affiliate management company means the brand can scale their affiliate or performance marketing program more efficiently and with a faster higher ROI. #Adzglobe Team#