Affiliate Marketing Tips | 2019-12-16

Performance Marketing vs Affiliate Marketing

Edgar Chekhovich

Written by
Edgar Chekhovich

Performance Marketing vs Affiliate Marketing

Performance marketing stands out in digital marketing more and more each year. Still, not everyone in the industry understands what performance marketing term even means, and why it exists.

Here is a little hint why this topic matters. Spend for US performance marketing alone in 2018 is estimated to have been over $6 billion, according to a study conducted by PWC in conjunction with the Performance Marketing Association. Every year the numbers have been increasing and predicted to reach $6,82 billion by 2020.

So, in this article, we’ll explain how performance marketing is different from affiliate marketing. Also, you’ll know how does performance marketing works, what channels does it use, and much more. Let’s dive in!

What is Performance Marketing?

The principle of performance marketing is that the advertiser or network pays the affiliate only for the desired result: a completed sale, lead, download or other targeted action.

Marketing strategy based on performance changes the nature of affiliates and publishers advertising campaigns. Since it’s not about impressions and brand awareness only, both are initially working for ROI improvement and profitable results.

Significantly, performance marketing may not be limited to just a framework of affiliate marketing. So, let’s talk about the differences between the two.

Is Performance Marketing a Shift from Affiliate Marketing?

Affiliate marketing term originated much earlier than performance marketing. If you are reading this, probably, you already know how it works. The affiliates promote your product to the audience and, in return, they get commission payouts. 

Technically it seems like affiliate marketing and performance marketing are the same things. Still, there’s a different approach to each, and performance marketing includes so much more.

Affiliate marketing in itself may not ensure the consumer will buy your product or service. But new technologies and digital marketing strategies allowed to take a closer step towards completing your priority action. And now affiliate marketing has evolved to the extent when sometimes you pay the affiliate only for sale or download. From this point, performance marketing enters the scene and goes far beyond the affiliate model.

How Does Performance Marketing Works?

Performance Marketing vs Affiliate Marketing

The main performance marketing principle lies in the fact that the affiliate must correspond to your rules and achieve measurable business results to fulfil the contract.

The process is quite simple. First, you define the required goals and quantitative criteria. Then, the affiliate designs a campaign aimed to achieve as much completed actions as possible.

Performance marketing strategy depends on the payment structure. It’s up to you which one payment system to choose. Let’s look at most common performance marketing payment models out there:

  • Pay per sales. When you pay only for sale directly generated by an advertisement;
  • Pay per leads. When you receive a sign-up from an interested consumer as a direct result of an ad;
  • Pay per downloads/installs. When you pay for app installation or download straight from the advertisement;
  • Pay per acquisition. When a specific action, such as a sale, download or form completion, occurs.

When you chose the most suitable payment system, you can start choosing top performance marketing channels.

a) Paid search ads (PPC)

Thanks to Google AdWords and other paid search ads programs, Search Engine Marketing (SEM) still the most popular performance marketing channel. The process is by no means an easy one, but understanding it and using this channel for performance marketing is crucial to achieving high ROI.

b) Social media ads

This channel includes all traffic that comes from social media networks such as Facebook, Instagram, Twitter, LinkedIn and more.  However, it doesn’t mean you should use all of them at once. Find the social network where your target audience is, and use this channel for your performance marketing.

c) Native advertising

Since consumers are looking more towards opinion leaders these days, the use of native advertising will be common sense. Besides the point that this channel allows you to reach the target audience in their natural environment, native advertising produces more click-through rates than any other type of advertisement.

Benefits of Performance Marketing

Performance marketing not only adds more to affiliate marketing, but it also brings significant benefits to your growth and digital marketing overall.

The obvious profits coming with affiliate marketing is the promotion of your brand through affiliates and publishers with their own audience, budget and influence range. In addition to that, you’re increasing market share, targeted traffic and audience engagement. The most important thing, performance marketing reduces your risk, improves the market expanse and budget size while enhancing your brand and ROI. Besides, performance marketing fully trackable, measurable and can be improved.

How to Evaluate Performance Marketing?

Brands can now see the entire click-to-consume path of each buyer, and identify where to invest more, in which affiliates or channels, to produce better results. All that and much more is very easy to do with the help of our specialised software. Affise is a technological platform for performance marketing, data analysis and ad campaigns’ automation.

Affise is a solution for brands, networks and publishers. Within one platform, you manage affiliates and track their performance. Affise ensures the highest ROI from your ad campaigns and gives all the tools for their optimization. In conclusion, you’ll get all the data you need to make the required improvements to your affiliate program.

Find out more about Affise and how it helps to improve your affiliate marketing so it will perform better. Sign up for 30-days trial and try Affise for yourself!

 

Originally published