Performance Marketing

3 Key excerpts on "Performance Marketing"

• 

  eBook - ePub

  Understanding Digital Marketing

  Marketing Strategies for Engaging the Digital Generation

  • Damian Ryan(Author)
  • 2016(Publication Date)
  • Kogan Page

    (Publisher)

  Performance Marketing, unlike other digital disciplines, is not a single medium or method of marketing. It is a way of utilizing any and all digital channels to market a brand’s products or services, but where the brand only pays for the results achieved.

  This may sound quite vague at this point but the workings of Performance Marketing will become clearer as we progress through the chapter.

  Definition

  Sources such as Wikipedia do not have a decisive definition for Performance Marketing (such is the recency of the term’s adoption). It does have a definition for performance-based advertising though, which provides us with a good starting point: ‘Performance-based advertising is a form of advertising in which the purchaser pays only when there are measurable results’ (see: http://en.wikipedia.org/wiki/Performance-based_advertising ).

  Combine this with a definition of affiliate marketing and you start to get a flavour of what Performance Marketing is trying to achieve:

  Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’); the network (that contains offers for the affiliate to choose from and also takes care of the payments); the publisher (also known as ‘the affiliate’); and the customer’ (see: http://en.wikipedia.org/wiki/Affiliate_marketing ).

  By combining these two definitions, we can create our own definition for Performance Marketing:

  Performance Marketing is a type of performance-based advertising in which a business rewards one or more of its partners for carrying out some form of advertising or promotion of the business’s products or services, which results in a customer taking an action. The action is prescribed by the business, allowing them to ensure their advertising spend is delivering actual, measurable results.

  History

  Performance Marketing has been around since the dawn of the internet. Okay, not quite but very close. The first Performance Marketing programme (affiliate marketing, back then) was launched in 1994 by PC Flowers & Gifts. To put that into context, that is just three years after the invention of the web and a full two years before Larry Page came up with the idea for Google!

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  eBook - ePub

  Digital Marketing Fundamentals

  From Strategy to ROI

  • Marjolein Visser, Berend Sikkenga, Mike Berry(Authors)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  Affiliate marketing is a performance-based digital marketing channel that is an integral part of today’s marketing mix. A definition for digital affiliate marketing is (Wikipedia, 2017):

  Digital affiliate marketing

  Digital affiliate marketing is a form of digital marketing that involves the web shop (advertiser or merchant) paying the affiliate (publisher/webmaster) for every visitor, lead or sale that he or she generates via his/her website(s), newsletters or search engine campaign.

  Performance Marketing

  Affiliate marketing (also referred to in some countries as Performance Marketing) revolves around the establishing of certain activities, such as a visit or information request, and/or the sale of services and products from advertisers on partner sites. Affiliates are also called publishers. Affiliate marketing is characterised by the outright ‘no cure no pay’ principle and is the ultimate ‘performance based’ form of digital marketing. The advertiser only has to pay the resellers (affiliates/publishers) if the results have actually been achieved. The result is determined and settled on the basis of a predefined activity: a conversion. More about conversion objectives can be found in subsection 7.5.2.

  The advertiser is at low risk regarding their marketing and sales budget because of the no-cure-no-pay principle. That is why an increasingly number of advertisers are discovering this form of online advertising.

  7.5.2 The aim of affiliate marketing

  For the advertiser, the aim of affiliate marketing is always to achieve a direct result. The most common conversion objectives are:

  • sales : purchases, reservations
  • leads : information request, call for tender, newsletter registration
  • traffic : visiting a website

  Looking at these conversion objectives, advertisers often decide to focus on sales or leads. The leads can then be followed up, for example by having a call centre phone them and convert them into a sale after all. The purpose can also be to collect email addresses or other personal data from a specific target segment. This can enrich the advertiser’s customer database. This data can be used at a later stage, for example to send mailings including a special offer. A combination of previously mentioned conversion objectives is also possible.

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  eBook - ePub

  The Marketing / Accounting Interface

  • Robin Roslender, Richard M.S. Wilson(Authors)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  business-to-business. For the purpose of this paper, we define “marketing” as “meeting needs profitably” (Kotler and Keller 2006:5). In other words “marketing” here refers to what the whole company does to satisfy customers and thereby create shareholder value. We are not therefore concerned with departmental performance nor with the productivity of a particular marketing activity, e.g. advertising, but with the company's overall achievement in marketing terms. These narrower performance questions depend on what particular goals they were assigned. Those differ from company to company; whereas the need to generate net cash flow through meeting customer needs is universal, even for not-for-profit organisations. The assessment of the contribution of marketing to firm performance in this broad sense has become a major issue (Bahadir and Tuli 2002; Bruno, Parthasarathi and Singh 2005; Debruyne and Hubbard 2000; Morgan, Clark and Gooner 2002; Rust, Lemon and Zeithaml 2004), but views are polarised. One extreme argues that the ultimate purpose of marketing is to improve shareholder value and that marketing performance should therefore be judged by some single financial indicator, which we call a “silver metric”. If shareholder value itself is not feasible, because it is confounded by too many other factors, then discounted cash flow (DCF) or return on marketing investment (ROMI or ROI) should be used. Furthermore, if marketers seek more support from the Board, they should express performance in this financial language. The other extreme argues that financial measures are inadequate for explaining marketing performance since they do not satisfactorily deal with the marketing asset (often called “brand equity” Aaker 1991)

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