Performance marketing covers six strategic approaches: cost per acquisition (CPA), cost per sale (CPS), cost per impression (CPM), cost per click (CPC), social media advertising and affiliate marketing. What they share is that you pay for measurable interaction. In B2B they only work with current data, a clear target audience and good conversion on the landing page.
Performance marketing is not a strategy in itself. It brings together several approaches that help you reach your goal. In this article we look more closely at the six we consider most important.
Thanks to the breakneck pace of technological progress, the internet has never been so crowded with ads from different brands competing for your attention. As a modern B2B marketer you know that the digital age has changed the way we advertise for good. If you are one of those "everything was better in the old days" types who swear by print ads in magazines, let us give you one thing to take away right now:
Today you no longer have to pay up front for ads in magazines or newspapers. There are plenty of them online, and they only charge when someone clicks.
Put simply, performance marketing follows the principle of performance before presence. In B2B, too, performance marketing lets you advertise effectively while reducing the financial risk of large up-front payments and improving the conversion rate, provided you work with the right performance marketing strategy.
If you are wondering what performance marketing means in the first place, you will find a precise definition in the article What is performance marketing?
The main goal of this form of online marketing is to make individual measures as efficient as possible. You achieve that by measuring the interaction with your target audience carefully.
Of the many approaches, this article introduces the six most important:
- Cost per acquisition (CPA)
- Cost per sale (CPS)
- Cost per impression (CPM)
- Cost per click (CPC)
- Social media (similar to influencer marketing)
- Affiliate marketing
What the six approaches have in common: you only pay when the audience you address interacts with you in some way.
But take note: all of these measures only work if you use genuinely current data. Otherwise there is little or no interaction.
Cost per acquisition (CPA)
With this now very popular performance marketing tactic, you as an online marketer only incur costs when the prospect carries out an action you defined in advance. Your goal might be to win subscribers for your email newsletter. With CPA, you only pay when someone actually signs up to your list.
Your goal could also be to market a webinar, free or paid. This approach is particularly popular in B2B. Here you only pay when someone registers and perhaps even buys a ticket in advance.
The big advantage of this strategy is that costs are very easy to control, and with the right data the campaign can be highly effective.
Cost per sale (CPS)
The second performance marketing strategy is really a special case of CPA. Instead of a general action, such as signing up to a newsletter, the goal here is clearly a purchase. Costs only arise when an actual sale happens through the ad link.
Effectiveness is high here too, which makes this strategy attractive mainly for smaller companies or when there is no large advertising budget.
Cost per impression (CPM)
The first two approaches are great when you want a specific action from the customer, such as a purchase or a registration. If your goal is branding, or a mix of branding and revenue, CPA and CPS soon reach their limits.
This is where CPM comes in. It is primarily about visibility and, as the name says, impressions. An impression means the ad is shown to a potential customer. A click on the banner or ad link takes them to a landing page where they are meant to carry out a defined action. That could again be signing up to a newsletter, a purchase or any other action.
With CPM, optimising the conversion rate matters a great deal, because you always bear the cost whether or not an action follows. This strategy is therefore best suited to branding and to raising your current visibility.
Cost per click (CPC)
This approach is the link between CPM and CPA or CPS. Search engines and social media platforms in particular work with this model, for example when you run ads on Facebook or Google Ads.
With CPC, what counts is the number of clicks that lead to your website, landing page or straight into your shop. As soon as a user clicks the link or banner, you pay. The clear advantage is the usually fairly low cost. At a CPC of 50 cents or Rappen, for example, 100 clicks cost you just 50 euros or francs.
As with CPM, good conversion is essential here, otherwise you burn money continuously. What matters on the landing page is covered in our article on the B2B landing page.
Social media
Social media, and in B2B mainly LinkedIn (see our article on LinkedIn Ads), is growing in popularity across all groups of society and therefore in almost every target audience. Marketing through these platforms can be very attractive for small and medium-sized companies too.
This does not just mean building likes and followers organically. Almost all of these platforms also let you boost certain posts or place them as ads. Social media can therefore be used both for branding and for direct marketing.
This performance marketing strategy is generally very cost-effective and highly flexible. You can also target the intended audience precisely, which reduces wasted reach.
Affiliate marketing
The last performance marketing strategy is ultimately a special form of CPM or CPS. In this equally results-driven approach, the partner promoting the product receives a commission for every sale or lead generated through them. The commission can be negotiated very individually.
In the financial sector in particular, but well beyond it, this approach has become popular because it offers advantages to both the marketer and the publisher. For you these are mainly high effectiveness and predictable costs, and possibly quite low effort, since the publisher takes care of most of the work.
Conclusion: pay only when someone interacts
The days when you had to pay up front for traditional marketing campaigns are over. With performance marketing you run online ads that not only reach your target audience but that you only pay for when that audience interacts in some way. That only works if your data is current.
So we want to stress once more the most important thing all performance marketing strategies share: they only work with current, measurable data on user behaviour. Every optimisation in performance marketing must therefore be data-driven. Which metrics you need for that is shown in our article on metrics in B2B performance marketing.
FAQ
Which approaches are there in performance marketing?
The six most important are cost per acquisition, where you pay per defined action, cost per sale, cost per impression, cost per click, paid social media advertising and affiliate marketing, where partners are paid per referral.
What is the difference between CPA and CPC?
With CPC you pay for every click on your ad, whatever happens afterwards. With CPA you only pay once a defined action happens, such as a sign-up or a download. CPA is easier to plan but requires good measurement.
Which performance marketing approach fits B2B?
In B2B, CPC campaigns on search terms with buying intent and social media ads on LinkedIn often work, because they allow precise audience targeting. CPA pays off for clearly measurable goals such as webinar registrations. What happens after the click decides.
Why does performance marketing need current data?
Because every approach rests on measurement. Without current, clean data on target audience, conversion and revenue you optimise for the wrong signals and burn budget. Connect campaigns to your CRM and measure all the way to the qualified opportunity.
