Concept and Example of Performance Marketing


As we all know that marketing is one of the most emerging business functions without which no business unit can target and retain its customer. Marketing not only helps in fulfilling the needs and desires of the customer but also helps in growing the company at a faster pace compared to its competitors. 

There are various segments of marketing such as brand marketing, social media marketing, content marketing, email marketing, performance marketing, influencer marketing, and many more. In this article, we will discuss the concept and meaning of performance marketing. 

Concept of Performance Marketing

As the name reflects it is a marketing entirely based on performance. It means that you are provided with a task and based on your effectiveness and efficiency to complete the task the payment will be provided to you.

Let us take an example, you are working on a social media platform and you must advertise a perfume as effectively as you can. The cost of the perfume is $200 and on the sale of each successive perfume, you will receive a payment of $50. Now you will receive the payment according to the sales made by you. In other words, the payment will be entirely based on your efforts and performance to sell the perfume. The more you sell, the more you get, and vice versa. 

Meaning of performance marketing

Performance marketing is a form of digital marketing in which the payment is made by a business after the successful marketing of a product or service which led to an achievement of an objective, increase in a sale or complement of any other particular task. In simple terms, it is a form of marketing in which the company pays off based on the performance or after the competition of a particular task. 

This type of marketing takes place in the advertising world. When a business contacts an advertising agency to design, publish, place, or advertise any product, it forms a contract with the agencies that instead of paying traditionally the payment will be based on how their ads are performed. 

Example of Performance Marketing


We are all familiar with LinkedIn. It is one of the biggest employment platforms in which you can search for your dream job or internship. It is one of the most common platforms in which performance marketing is conducted on a large scale. 

On LinkedIn, there are more than 774 million users who share their professional information, valuable data, vacancies,  internships, jobs, seminars or webinars, and other useful things. The interested person can review the information and apply it in any field. When a person applies through the links or information provided by the company user, the user gets a reward in the form of money for it. This is because all this works on the concept of performance marketing. 

The person who shares the information performs his duty of advertising the information of the company on the platform. When you apply for any particular seminar job or internship you become a customer who indirectly benefits the advertiser i.e, the person who shares the information. 

Google search 

Google search or search in the search bar of Google is another example of performance marketing. When we search for something on Google, not only the desired result but also various ads are shown on the search bar. These ads are either related to the search or revolve around the search made by us. 

When a user clicks on these ads, the advertising company or individual gets a reward. The reward is based on the concept of cost per click. The more individuals click the ads and visit them, the more will be the cost given to the advertiser. 

Email marketing 

Often when we open our Gmail, there are a lot of emails appearing in the spam or promotion section. Sometimes we open these emails and check them and sometimes we ignore them. These emails are mainly from top universities, colleges, famous websites such as collegedunia, quora, textbooks, or based on the searches we made on Google. 

These emails are a part of performance marketing. These are sent on a large scale to millions of users and when a user reads the information given to them or visits the attached link, the sender of the email gets a reward for convincing the user to act upon the information given in the email. 

Affiliate marketing 

This is the most emerging concept in performance marketing. It is a kind of chain network in which people convenience other people to join their company and promote the product or services of the company. It is based on the concept of adding more and getting more. 

For example, you are provided with a task to promote the company’s offerings such as products, or services through social media marketing. Your reward will be based on the sales made by you. Now, one more condition is given to you, that is you have to add three more people, from your contact to the company and you will be given 30% or 20% of the sales made by them. Now you will add three people because it is compulsory and also because you will get the 20-30% of the profit earned by them through sales. 

Also, when you add three people, they are provided with the same offers and the same condition. Now those three will add more than nine people to the company. This will continue on a large scale and a chain network will be formed where you are given rewards based on how efficiently you perform the given task.