Digital Marketing

What is Performance Marketing, its Benefits and how it is different from Affiliate Marketing

  • December 6, 2022
  • 6 Mins Read

Performance marketing is a form of online marketing that focuses on achieving specific objectives, such as increasing sales or generating leads.

Performance marketing is highly performance-driven and results-oriented. It involves setting and measuring specific KPIs in order to track and optimize results. Marketers are typically paid based on how well they achieve the desired objectives.

Performance marketing can be used to achieve a variety of objectives, and it is often used in conjunction with other forms of online marketing, such as content marketing, affiliate marketing, or social media marketing. It is an effective way to reach customers actively searching for products or services you offer.

When done correctly, performance marketing can be a very effective tool for achieving your business goals. However, it is important to set realistic goals and track your KPIs carefully in order to avoid overspending or underperforming.

How is Performance Marketing beneficial?

For advertisers, they only have to pay when they get results, which means they can effectively control their marketing budget. For publishers, they can earn more money by driving results for advertisers. And for consumers, they can be exposed to more relevant ads and offers.

Overall, performance marketing is a win-win-win situation for all parties involved. Advertisers get better results for their money, publishers earn more money, and consumers see more relevant ads.

Is Affiliate Marketing the Same as Performance Marketing?

Affiliate marketing and performance marketing are quite a bit different.

Affiliate marketing is a type of marketing where you promote a product or service and receive a commission for each sale that you generate. Performance marketing, on the other hand, is a type of marketing where you are paid based on the results you generate.

Affiliate Marketing book explaining about it
AFFILIATE MARKETING inscription coming out from an open book, creative business concept

So, in affiliate marketing, you are only paid if you generate sales, while in performance marketing, you can be paid for generating leads, clicks, or even increased traffic.

Performance marketing is a more effective way to market, as you only pay for results and not just activity.

How Does It Work?

Performance marketing is a team effort between four different groups: retailers or merchants, affiliates or publishers, affiliate networks and third-party tracking platforms, and affiliate managers or OPMs (outsourced program management).

Each group plays an important role in driving the ultimate desired result. Here is what each group means:


Retailers pay affiliates (publishers) for achieving specified goals, such as generating traffic or making sales.

With 49% of consumers depending on influencers recommendations, retailers who invest in performance marketing can potentially reach a wider audience and see real-time ROI from their campaigns. So, retailers looking for an effective way to market products or services often choose performance marketing for growth!

Affiliates or Publishers

Affiliates or publishers can be thought of as the “marketing partners” of performance marketing. They can come in many forms, such as coupon websites, blogs, product review sites, mobile apps, etc. Affiliates help to extend the reach of a brand by promoting it on their own site, social media, or other channels. In return, retailers should have a strategy in place to understand what affiliates need from the merchant to be successful.

Affiliate networks and third-party tracking platforms

Performance marketing is a type of marketing where businesses reward affiliates for each customer they bring in. The most common compensation is commission, but other forms, such as performance-based bonuses, can also be used.

To track the performance of their affiliates, businesses typically use affiliate networks or third-party tracking platforms. Affiliate networks are companies that manage the relationships between businesses and affiliates, as well as the payments that flow between them. Third-party tracking platforms, on the other hand, provide the technology that businesses need to track the performance of their affiliates.

Affiliate managers or OPMs (outsourced program management)

Affiliate managers are responsible for managing the affiliate publishers on behalf of the advertiser. An Outsourced Program Management (OPM) also does this, but they go a step further by finding ways to outsource endeavours outside of the main affiliate company.

There are many benefits to having an affiliate manager or an outsourced program management company. They can help recruit affiliates, manage payments, and provide support to affiliates. They can also help track sales and leads and provide reporting to the merchant, making the work of an advertiser much easier!

What are the Benefits of Performance Marketing?

The digital marketing industry is constantly growing, which is why performance marketing has such great potential to scale your business. If you want to make the most of performance marketing, here are three reasons why you should invest in it:

Easy reach: Performance marketing can be customized to target specific demographics, interests, and locations, making it an extremely powerful tool for reaching your ideal customers.

Performance tracking: Performance marketing allows you to track and measure your results. This means that you can see which campaigns are working and which ones are not and then adjusting your strategy accordingly.

Minimum risk: You only pay for the results in Performance Marketing. This means that you’re not paying for ad space or impressions, but only for your specific objective. This makes it a very effective and efficient way to market your business. Additionally, because you’re only paying for results, you can more easily track your return on investment (ROI).

The Final Word

According to Statista, ad spending in the Digital Advertising Market is projected to reach $616.00 billion in 2022.

As a business owner, if you’re looking to reach and convert new buyers at scale, performance marketing could be a great solution for you. Working with publishers and affiliate networks allows you to extend your reach beyond what you might be able to achieve with more traditional marketing methods.

Figure out which approaches work for you and how to meet the needs of your brands and affiliate partners. Define your goals and start creating new connections.


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