In performance advertising, clients pay only when ad placements deliver measurable results.
A well-executed direct performance advertising campaign can deliver a positive return on investment by demonstrating which potential customers respond to a clear call-to-action. Successful campaigns are typically marked by sophisticated and heavy data analysis. Most campaigns involve the following steps:
- Identify and target those users who are actively seeking those goods and services that are offered by the advertiser.
- Analyze user data to understand what is working, and to optimize campaign messaging.
- Analyze downstream performance data to further refine targeting and filtering of candidates to maximize the rate at which targeted users are converted to customers.
Our performance model contrasts with traditional CPM (cost-per-view) display advertising in significant ways. In a CPM campaign, pricing is based on how many times an ad is viewed. The advertiser pays for reach, but is charged this rate regardless of how many — or few — users click or otherwise interacts with the ad. CPM advertising is widely used to promote brand awareness and company messaging, and remains an important staple of online advertising.
Many top companies embrace both CPM and performance models as crucial but distinct elements of their overall advertising strategy.
benefits of performance advertising
Performance advertising holds several advantages, enabling advertisers to:
- Maximize return on investment: Performance-based advertisers can begin a campaign on a limited budget, and reinvest resulting revenue directly back into the campaign.
- Optimize performance: Performance-based advertisers are able to observe the effectiveness of a campaign on a daily, or even real-time basis. The stream of business intelligence enables rapid improvement and optimization of targeting and messaging.
- Minimize risk: Advertisers only pay the distributor or publisher of performance-based advertisements when there is a measurable action. The risk as assumed by the distributor or publisher.