In the digital marketing world, there are two camps of thought about marketing: performance marketing and digital marketing. They’re both helpful ways to drive more traffic to your website, so which one should you choose? The answer lies in knowing the difference between the two and using that knowledge to your advantage. Read on to learn the ins and outs of performance marketing vs digital marketing and how you can use them to help your business thrive online!
What is Performance Marketing?
Performance marketing, which is considered to be a subset of digital marketing, deals with using internet marketing tools. It may come in the form of a lead, sale, or click.
Performance marketing differs from other types of digital marketing in that with performance marketing, the business only pays for advertising if the campaign leads to results. With the other types of digital marketing, businesses often pay for both reach and impressions, even if they do not lead to results.
This also means that performance marketing can be more expensive at first than digital marketing. However, it is important to remember that with performance marketing, you only pay for results. Thus, if the campaign is successful, you can earn a lot of revenue in the long run.
Benefits of Performance Marketing
With Performance Marketing, you’ll notice a huge difference in ROI. You can create and maintain effective branding with keyword research tools that allow you to target a wider range of customers. There are many online channels like Google Ads and Facebook Ads that will increase customer engagement for more conversions and also brings in new customers who were previously unknown to you.
There are also several disadvantages to Performance Marketing. This model of marketing tends to be more expensive, as there are several fees involved in bidding for ads. In addition, you may find it difficult to scale quickly with Performance Marketing since you might be limited by budgets or audiences that don’t quite fit what you need. Also, competitors may have less success than others. You might notice them ramping up their ad campaigns around you and seeing their return on investment increase over time.
Metrics to measure Performance Marketing
- Cost Per Mille (CPM): Many marketers care less about CPM (Cost per 1000 Impressions) because they measure other metrics more than impressions.
- Cost Per Click (CPC): The viewer pays each time they click the ad.
- Cost Per Action (CPA): It can tell you how your campaign is performing by its measures of things like signups, downloads, and so on.
- Life Time Value (LTV): It is the value of a customer’s lifetime spending with the company.
What is Digital Marketing?
Digital marketing (or internet marketing) is the act of using digital platforms to drive marketing strategies, as well as broader reaching goals such as raising awareness or establishing goodwill. It’s more than just promoting a website; it’s about conveying a message in any way possible.
Digital marketers use email marketing, search engine optimization (SEO), social media marketing (SMM), video content creation, display advertising, and other paid online media outlets to do this.
When you think of digital marketing, you should think of three main objectives. The first is customer acquisition—how to drive traffic to your website and convert that traffic into leads and paying customers. The second objective is about retaining these customers; it’s about nurturing those leads so they continue to do business with you and refer others.
The third objective of digital marketing is to increase your search engine ranking. SEO, or search engine optimization, refers to any tactic that you use to make sure that Google (or other search engines) ranks you higher in their results. The higher you rank, the more traffic and leads you get; it’s as simple as that.
Benefits of Digital Marketing
Digital marketing can be used to target a variety of different customer segments and demographics. To craft successful campaigns, companies need to understand what types of people they want to reach, what their conversion goals are, and which methods are most effective in attracting their desired audience. Online marketing specialists have identified many advantages digital marketing has over performance marketing when it comes to reaching customers through the Internet.
When it comes to connecting with customers and prospects, digital marketing has many advantages over performance marketing that marketers can use to their advantage. For one thing, digital marketing can be used as a lead generation tool. When customers visit a company’s website or learn about its services through digital channels like search engine optimization (SEO), they may express interest in learning more about the company.
A web presence that consists of a large, authoritative website and high-ranking search engine results gives companies an edge over their competitors in terms of brand recognition. Companies can also use digital marketing to reach out to new potential customers and offer free trials or educational material. When these efforts turn into sales, it means increased revenue and profits—which can be measured through digital analytics software. Increased conversions mean more return on investment (ROI) for businesses.
Metrics to measure Digital Marketing
- Bounce Rate: The number of visitors to a site who left without taking any action.
- Page Views: The total number of pages viewed.
- Conversion Rate: The total number of conversions from a particular website.
- Click-Through Rate (CTR): The ratio of the total number of clicks to the total number of viewers.
Why should you choose one over the other
The most noticeable difference between performance marketing and digital marketing, other than the media they use, is the way they aim to influence search intent. Search intent determines what people are looking for when they search and a successful campaign can leverage this to increase sales or reach a certain goal. Performance marketing relies on ads that have measurable outcomes such as time spent watching an ad or purchase conversions and typically sell against a consumer’s impulse. Conversely, digital marketing uses content and messaging to provide more value for consumers through original articles, interesting videos, or informative images that are aligned with the brand’s purpose. These digital tactics focus on telling the consumer why the product exists, who it benefits, and how to go about purchasing it in an indirect way which results in converting prospects into customers over time.
When looking at which approach to choose, consider how you want to establish your brand’s position concerning its competitors. This will influence where you spend your time and how much money you invest in marketing. For example, if a company wants to take a leadership role in their industry, they may decide that content creation and search engine optimization are more likely to help them reach that goal than performance marketing.
Then, consider what type of long-term growth you’re looking to achieve. Is it most important to generate leads now or to be seen as an authority in your field and build a large following over time? That will also influence which strategy you choose.
What factors should you consider when deciding on a marketing approach: There are many things to take into consideration when deciding that.
If you’re looking to make some serious money from your marketing efforts, performance marketing is the way to go. But before you jump head-first into it, learn the basics of the channel and whether or not it will be a good fit for your company.