Performance-based advertising
advertising strategy
Performance marketing, also known as pay for performance advertising, is a form of advertising in which the purchaser pays only when there are measurable results. Its objective is to drive a specific action, and advertisers only pay when that action, such as an acquisition or sale, is completed.
Performance-based advertising is becoming more common with the spread of electronic media, notably the Internet, where it is possible to measure user actions resulting from advertisements. Performance marketing is different from brand marketing which focuses on awareness, consideration, and opinions among target consumers.
Performance marketing is an integral part of an overall marketing strategy, and its effectiveness can be influenced by other promotional methods such as branding, media advertising, guerrilla marketing, and more. To assess the overall effectiveness of marketing activities, marketers analyze these influences further using tools like Brand Lift or similar metrics.
Pricing models
There are four common pricing models used in the online performance advertising market.
CPM (cost-per-mille, or cost-per-thousand) Pricing models charge advertisers for impressions, i.e. the number of times people view an advertisement. Display advertising is commonly sold on a CPM pricing model.
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