Mumbai: Performance marketing today holds tremendous control over brand expansion and growth in terms of revenue and brand recognition. Before we dive into the benefits of performance marketing, let’s take a second to understand the term performance marketing better. Performance marketing is a marketing strategy that is centered around data-driven results. This means that the performance marketing agency is paid based on how users interact with the content presented by the brand. This is a measurable feature that makes the marketing technique ideal for companies or brands which are looking to reach their audience directly.
Today, digital marketing is a field that has long surpassed all traditional methods of advertising. It is quite safe therefore to suggest that without a strong digital footprint, it is near impossible for brands to grow and expand without a strong digital plan in place. According to Statista, the world digital advertising spending, which was approximately $455.3 billion in 2021, will steadily increase to about $646 billion by 2024.
As per McKinsey, investments in performance marketing tripled considering the figure from $900 million in 2018 to $2.6 billion in 2022. These figures are suitable for summarising the methods of digital marketing for the audience and the brands which are looking forward to growing.
Directly affects ROI
Through performance marketing, it is easy for brands around the world to connect and attain new clients and generate a loyal customer base. This is possible because agencies working on performance marketing already have their own established audiences, helping brands increase traffic for their site. Since the model of performance marketing allows for results to be measured in real-time, it directly impacts the ROI. Brands are able to increase their ROI as their content often generates more results under performance marketing.
Brands can have a wide audience and grow exponentially abroad as well as locally by opting for performance marketing. As per the study conducted by YourStory, brands have seen their marketing profits increase by nearly 30 per cent without having to increase their marketing budget, making this marketing technique a win-win for the brands.
Helps maintain a strong customer base
Performance marketing is goal-oriented strategies that aim to increase conversions and sales. For instance, positioning your e-commerce business with a credible influencer allows the customer’s brand to leverage some of that credibility towards your brand or product. mHere, the payments made are dependent on the content generated through performance marketing that is interactive and conversational with customers. This is how performance marketing helps brands reach their customer base better, through retailers and merchants, and builds a closer connection with the customer. This makes the customer consider the brand more whenever they are making any purchase of goods or services resembling the ones the brand produces.
As per the research, when brands use performance marketing, they are able to increase their brand retention by 20 per cent. Along with this, they were able to generate their marketing-driven gross by 15 per cent. Performance marketing also has a direct impact on the advertising for the brand. The same search is seen via the optimising channels, resulting in a 14 per cent increase in advertising impact on the sales they make.
Performance marketing is a need of the hour for businesses around the world and around the corner. Many brands are moving towards performance marketing looking for its promising returns as the revenue generated helps the brands. According to the study conducted by Spiralytics, out of the 2,300 marketers examined, around 62 per cent of the brand and enterprise’s marketing budget was directed towards performance marketing. This is mainly because of the promising results and the numerous benefits that performance marketing offers.
The most advantageous marketing techniques have already taken off around the world. The figures mentioned above are only set to rise as the world moves forward toward a shift that is dominated by digital marketing. It is safe to say that without investing in performance marketing, brands cannot compete with their counterparts who have a strong digital presence.
(About Author: Vatsal Rajgor is the co-founder and CEO of Digimaze)
