Performance Marketing Jargon
1. What exactly is performance marketing?
Digital marketing campaigns that are concentrated on achieving quantifiable results based on specific business objectives are referred to as performance marketing. This implies that advertisers and marketers are only charged for certain user actions. For instance, a user might incur fees for performing certain actions, such as clicking on an advertisement (cost per click), making a purchase (cost per acquisition), or completing a lead form (cost per lead). Due to its ability to deliver more targeted results and a higher ROI than conventional advertising techniques, this pay-per-performance model has grown in popularity.
2. Advertiser, Publisher, Ad Network, Agency, and Tech platforms
An intricate ecosystem of participants is involved in performance marketing, including advertisers, publishers, ad networks, agencies, and tech platforms.
Publishers are the ones who put the ads on their websites, mobile apps, or other digital properties, while advertisers are the businesses or individuals who pay to have the ads displayed.
Ad networks act as intermediaries between advertisers and publishers, while agencies provide services such as ad creation, campaign management, and optimization.
Tech platforms provide the infrastructure and software tools necessary to carry out performance marketing campaigns, including analytics, tracking, and reporting.
3. What are KPIs?
The metrics used to assess a performance marketing campaign’s effectiveness are known as key performance indicators. The KPIs that matter most will depend on the specific business goals of the advertiser. Common KPIs include clicks, click-through rates (CTR), conversion rates, cost per acquisition (CPA), return on investment (ROI), and lifetime value (LTV). To optimize campaigns and improve results, KPIs must be tracked frequently.
4. Buying models (CPC, CPM. CPI, CPA or CPL, CPD(Mastheads))
There are various buying models in the world of digital advertising, some of which are:
- CPC (Cost Per Click): In this model, advertisers pay for each click that their ad receives.
- CPM (Cost Per Mille): In this model, advertisers pay for every 1,000 impressions their ad receives.
- CPI (Cost Per Install): In this model, advertisers pay for each app installation that results from their ad.
- CPA (Cost Per Action): In this model, advertisers pay when a specific action, such as a purchase or sign-up, is taken as a result of their ad.
- CPL (Cost Per Lead): In this model, advertisers pay for each qualified lead that their ad generates.
- CPD (Cost Per Day): In this model, advertisers pay a fixed daily rate to display their ad on a particular website, often as a homepage masthead.
5. Different types of advertisers: B2C, B2B, D2C, and B2G
- B2C (Business-to-Consumer): Advertisers who sell products or services directly to consumers.
- B2B (Business-to-Business): Advertisers who sell products or services to other businesses.
- D2C (Direct-to-Consumer): Advertisers who sell products or services directly to consumers without intermediaries.
- B2G (Business-to-Government): Advertisers who sell products or services to governmental organizations.