What is Performance Marketing? A Detailed Guide | By Design


What Is Performance Marketing? An Introductory Guide.

According to statistics reports, worldwide digital advertising spending will reach a whopping $646 billion by the end of 2024. Performance marketing is the new hype in the online marketing industry. In this blog, we provide a comprehensive guide on what is performance marketing, what the types of performance marketing are, and other associated topics. 

What is Performance Marketing?  

It is an online campaign in which advertisers or brands pay advertising platforms or marketing companies for clicks, conversions, or other results achieved. This type of digital marketing is also known as pay-for-performance advertising or performance-based advertising as brands pay marketing providers after the success of their campaign. 

What are the Main Types of Performance Marketing?

Having gotten a gist of the frequently asked question, what is performance marketing, let’s jump ahead to the commonly known types of performance marketing and how they can benefit your online business.

1. Affiliate Marketing

Digital marketing affiliated with the advertiser and paid out after achieving the required outcome is often termed affiliate marketing. It may involve partnering with a review, coupon, incentive, or loyalty site, or working with a blogger, YouTuber, or influencer. 

2. Sponsored Content

This is a traditional type of content marketing and native advertising that includes a dedicated video or a post on a site publishing identical content. The compensation can be in the form of CPM, CPA, or CPC-based payout, an experience, or a free product. 

3. SEO 

This is one of the commonly used types of performance marketing that depends on the algorithm of search engines to rank at the top. 

4. Native Advertising

This is a type of paid media that doesn’t look like advertisements. It is more likely to follow the natural form and function of the sites they are placed on like social sites or news sites. 

5. Paid Search Marketing

In this form of marketing, advertisers pay for clicks to sponsor advertisements on search engines. Advertisers pay whenever their ads are displayed. 

6. Social Media Marketing

In this marketing, social media networks are used to get traffic and create brand awareness like digital content displayed on Instagram, Facebook, etc.

Advantages of Performance Marketing

Performance marketing includes the best use of paid and organic strategies to get staggering turnovers. Using performance marketing tactics will help with great brand awareness, trackable performance, audience diversification, data capture, low risk, widening brand reach, and getting higher returns.

Define Media Buying. Is It Related to Performance Marketing?

What is media buying? It is the process of buying ad space and time on offline and online platforms like radio, TV, websites, and YouTube. It is not the same as performance marketing, which is based on PPC, CPC, and clicks. In media buying, the parties can often agree on a flat amount. 

What is Media Planning?

Many people often confuse media planning with media buying but what is media planning? Media planning is about determining which media format or placement will prove highly effective to reach a target audience basis the brand’s objectives. 

How Media Planning is Different from Media Buying?

Media planning and media buying are two distinct processes. Having answered the question, of what is media planning, you might understand that it just concentrates on the strategy or tactics behind the campaign instead of getting impressions from the target audience. Media buying is implementing the media plan and concentrating on purchasing the right combination of media to effectively achieve the campaign goal

What is Programmatic Advertising? Is it the Same As Performance Marketing?

It is a process that automates media buying (processes and transactions included in buying and dynamically putting ads on apps or websites). It is a crucial ingredient of performance marketing since it allows advertisers to purchase better placements to a large extent and boost their ROI.  

How to Measure Performance Marketing?

Performance marketing pricing can be better understood using several commonly used metrics – CPA, PPS, PPC, PPX, PPL, CPM, and LTV. 

CPA (cost per acquisition) or PPS (pay per sale) is the amount merchant or retailer pays after the completion of a required action by customers. 

PPL (pay per lead) is a completed form signup or registration including customer details to allow merchants to follow up with consumers and get sales. 

PPC (pay per click) is the amount retailers pay an affiliate for ad clicks referred to a required landing page. 

LTV (lifetime value) measures the customer’s predicted lifetime value throughout the relationship with a retailer. 

CPM (cost per mile) measures the price advertiser pays for 1000 impressions for an online advertisement. 

PPX (pay per X) is the payment model where X represents everything merchants define as required action outside of a click, sale, or lead.  

Wrapping Up

So the next time you ask what is performance marketing or what is programmatic advertising, reach back to this blog. We’ve covered defining the paid forms of advertising/marketing, and how they are associated with performance marketing. Since marketing trends are constantly showing investments into all things of digital marketing, performance marketing reflects great commitments for business owners who want to transform their new customers at scale and comparatively lower cost. 


1. What is performance marketing?

It is a type of digital marketing in which brands pay marketing service providers after taking the desired action like leads, clicks, or sales. 

2. What are examples of performance marketing?

Native advertising is a perfect example of performance marketing in which advertisers or brands just pay for particular conversion goals, clicks, or other conversion actions. Other examples include affiliate marketing, social media advertising, and email marketing. 

3. Is SEO part of performance marketing?

Yes, SEO is also a type of performance marketing. Some companies can determine their search engine marketing results based on their performance.  

4. What is the difference between performance marketing and digital marketing?

Unlike digital marketing, performance marketing concentrates on short-term goals. Digital marketing is a common term having numerous tactics, strategies, and channels for brand promotion, reaching targeted users and getting increased sales.