February 25, 2021 inMarketing

Performance Marketing in 2021: everything you need to know

Hero image

Performance marketing has become the umbrella term for a range of online advertising strategies that are making a big impact.

Unless you’ve been hiding under a rock, you’ve doubtless heard the term “performance marketing” being thrown around the web a lot recently. If you want to learn exactly what performance marketing is so you can take advantage of it in your marketing efforts, you’re in the right place.

We’ve put together this handy guide explaining what performance marketing is, why you’d use it, the most popular types of online advertising, plus handy tips for getting the most out of it. Let’s get started!

What is performance marketing and why use it?

Performance marketing is, well, marketing based on performance. Performance refers to your desired results—such as a lead, a sale, or a download—and you pay per result. It’s becoming increasingly popular because you can run a highly targeted marketing campaign that delivers performance-based ROI.

It functions by working with third-party affiliates and advertisers where the marketer pays the advertiser only for desired actions. This way, the marketer is confident their budget is well spent since they’re paying for actions that lead to conversions.

Performance marketing is made possible thanks to the entirely trackable, measurable, and transparent systems advertisers and affiliates use. You can see the entire buyer journey for individual customers and use insights to fine-tune your campaign as you decide where to invest your money for even better results. Put simply, there is no other customer acquisition opportunity around like it at the moment!


In digital marketing, several areas fall inside “performance marketing” and each of them is slightly different, meaning performance marketing is not the same in every place you find it.

Where one brand chooses to use just one or two areas, another will use several areas in a complex campaign with many moving parts to meet their marketing goals.

Here are the most popular performance marketing types you need to know about:

Affiliate marketing

Affiliate marketing is any form of marketing where the brand is affiliated with the advertiser and pays for desired actions such as click-throughs, leads, or sales. It’s a win-win for both parties with marketers only paying for results and affiliates using highly targeted methods to run effective campaigns.

The most common payment methods for affiliate marketing are pay per click (PPC), pay per lead (PPL), and pay per sale (PPS).

An example of affiliate marketing is Amazon’s affiliate program. Many bloggers and influencers are registered as Amazon affiliates. When they recommend an Amazon product on their website or social media channels and include a link, they receive a small commission (and the buyer isn’t charged any extra).

Native advertising

Native advertising is a type of paid media that matches the form and function of the site where they’re used, such as news or social media. Unlike display and banner ads, native ads don’t look like typical ads. Instead, they follow the look and feel of the site they’re placed on.

Native ads can be dynamically fed to users based on viewing behavior, for example as recommended reading. Many online media platforms and publications offer native advertising in the form of articles, infographics, and videos that align with the tone and editorial style of the site they’re placed on, such as Buzzfeed Partners and The Guardian Labs.

Sponsored content is most often used by influencers when they promote a brand in return for compensation. It usually involves placing a dedicated article or social post promoting a product or service.

If an influencer can prove they have a dedicated following that matches a brand’s target audience, a marketer can use the influencer’s popularity to their advantage by reaching highly engaged potential customers. For instance, there are a wealth of YouTube influencers offering sponsored placements to brands that their loyal followers will find attractive.

Social media marketing

One of the most popular types of online advertising, social media marketing, offers a vast and diverse user base for targeting your desired audience. In paid social media marketing, companies can reach potential customers by paying to advertise to them based on their social media profiles and demographics. Adverts are shown to the target audience who are likely to engage through likes, shares, and clicks.

Facebook is the most popular social media site for paid social advertising. With an estimated 2.8 billion monthly active users, global corporations right down to local independent sellers run ad campaigns on the sites to reach their potential customers.

Search engine marketing

Search engine marketing (SEM) is another powerful tool for reaching target audiences. SEM uses keywords to target users by placing relevant ads within search results. Marketers pay the advertiser per click-through to their landing page (PPC).

Marketers using Google Ads to display their ads on its search engine results pages (SERPs) are taking advantage of the platform’s immense reach, with 40,000 search queries handled every second and an estimated 1.2 trillion searches every year.

Referral marketing

When customers make recommendations through word-of-mouth in exchange for compensation—such as discounts or free products—it’s referral marketing.

Referral marketing is a powerful tool as a brand can use its existing customer base. Whenever you’ve signed up to a new service and received a discount when your friend signed up too, that’s referral marketing!


Top tips for making the most of performance marketing in 2021


Design a killer landing page

A lot of the time, performance marketing is about driving visitors to web pages. A poorly thought-out landing page is often the deciding factor between a conversion and a missed opportunity.

Always test your campaigns before they go live. Make sure all links are working properly and ensure your content, releases, and offers are up-to-date. Track the performance of your landing pages like a hawk and update the under-performers.

Carefully select your traffic sources

As we mentioned earlier, performance marketing varies by type, so choose affiliate partners carefully for the best chances of success. Use reputable advertisers to display your ads and content so that potential buyers trust you and make positive brand connections.

Constantly track and optimize performance

When you run a performance marketing campaign, you’ll be flooded with data in no time. This data gives you insights into what’s working and what’s not. Attribution, mobile vs. desktop, cost per click (CPC), etc. all provide invaluable data points to optimize your campaign and reach your goals.

Measuring performance is a whole other kettle of fish, which is why we’ve put together this handy guide with everything you need to know to effectively track your performance marketing campaign.

Keep reviewing, optimizing, and repeating to reach your goal

Whether you’re a performance marketing guru or just starting out, there’s always space to review your campaign, optimize it, and find a more effective way to reach your goal.

When you’re ready to begin your campaign, or if your campaign’s already underway, take a moment to check out Mediatool’s integrations. We have powerful data integration features to hook you up—including Google, Facebook, Instagram, and LinkedIn—and easily track and analyze your campaign, plus a ton of other really helpful features all in one easy-to-use platform.



MORE READING

Ready to take your media planning and marketing campaigns to the next level?

Request a live demo