Performance marketing refers to marketing techniques and campaigns by which the advertiser pays only for results. Performance marketing is an important part of digital marketing due to the tracking capabilities of the Internet.
In performance marketing context, publishers or ad networks’ remuneration may be based upon:
Cost per action or CPA ( any action agreed by publisher and advertiser)
Cost per sale or CPS (flat fee or sales commission)
Cost per lead (often based on filled webforms)
Cost per click
Cost per phone call
Cost per download or install (game and software industries)
The main performance marketing techniques used in digital marketing are:
PPC search engine platforms (Adwords)
PPC ad networks
Performance marketing has met a great success among advertisers because it allows ROI measurement and in some cases almost risk-free marketing investment. It is often seen as a response to the famous John Wanamaker’s citation "“I know that half of my advertising dollars are wasted … I just don’t know which half.”
From a publisher point of view, it may have some downsides. Publishers can complaint that they don’t have to be responsible for bad advertiser’s offfer or creative.
It has to be noticed that performance marketing on the Internet gives "bad habits" to advertisers and agencies and that the latter want sometimes to have same deals for offline marketing.
According to the IAB, 66% of digital advertising was sold with performance-based pricing in 2013.
Performance marketing presented by an affiliate platform: