Performance marketing is a type of advertising where you pay based on the performance of an ad, rather than just a set price to run it.
With traditional advertising, you usually pay for your ads up front, with no real idea of the response you’ll get. Which makes it a ‘heart in your mouth’ situation, as you could potentially be wasting your money.
This has been the biggest drawback of traditional advertising for years
So don’t fall for the misguided belief that traditional advertising is all good exposure for your business. You don’t want worthless exposure, you want measurable, cash in the bank sales, exceeding what you spent on the ad, don’t you?
With performance marketing, you pay based upon how often your ad is viewed, clicked, generates a lead, or results in a sale.
Performance Marketing can quickly and efficiently transform your business
So, no payout from you, until the set action or result is completed.
That’s the main reason performance marketing has become so popular in recent years. You get real-time measurement of your ROI (Return on Investment), it’s completely accountable and therefore easy to roll out and grow your most successful campaigns.
You have many options, but for this article, let’s focus on the most powerful one . . .
Affiliate Marketing really is the perfect example of performance based marketing.
Use Affiliate Marketing and you only pay for results
Affiliates earn a commission for each lead or sale they generate for you, not for simply advertising your company or product.
It means you’re paying for your advertising, after the sale from your profit. You also know the cost to generate each sale beforehand, as it’s the commission you pay the affiliate.
When you find high converting traffic for a certain offer, you can generate a far higher revenue via affiliate marketing than cost per click based ads.
If you’re not already using affiliate marketing, this fact alone should convince you to take a closer look.
You have 4 main options:
To host your own affiliate program for your business, you can use specifically designed Affiliate Tracking Software. There are many examples of this and you’ll need to do a little research to find the right one for you.
Here are 3 of the market leaders to get you started:
Has Offers: Founded in 2009, they ‘offer’ white-labelled affiliate tracking software which is known to be flexible, reliable and scalable. Notable features include unlimited affiliates, a two-way API, fraud protection, a mail room, currency conversion and a dedicated solutions option.
You can also use this as an ad agency to advertise your e-commerce store. They have a 30-day free trial, followed by the Pro = $279/month, Enterprise = $799/month memberships, or their Custom plan.
HitPath: This affiliate tracking software is touted as one of the fastest and most user-friendly available. Hit Path uses state-of-the technology to offer a reliable, scalable and customisable multichannel tracking platform.
Features include affiliate management, real-time campaign tracking, their Crosspub campaign accelerator, an accounting module, a white-labelled interface, along with free training and 24/7 support.
You can try the Hit Path demo and if you’re then interested you have to contact one of their sales representatives to get a quote.
GetCake: CAKE offers a convenient dashboard to easily view the overall performance of your networks, manage contacts, and analyse your results.
It’s a cloud-based tool with features such as: real-time metrics, campaigns targeted by location or device, multiple payout formats, fraud protection, individual portals for clients or affiliates, pixel and post back management, referral rewards and 24/7 support.
There are three different options called Select, Pro, and Enterprise, but pricing is “based on usage”, so you need to request a quote if you’re interested.
Self Hosted Affiliate Program – Pros:
This type of affiliate software offers an easy to use interface and infrastructure for managing your affiliate program, including managing affiliates, adding products, managing trackable links, tracking sales, along with setting up and paying commissions.
Basically, it does everything you need to run your program.
This option gives you more control over how your program operates, compared to using a hosted service. As you’re hosting your own affiliate program, you have the freedom to decide the rules and terms, along with choosing who’s accepted onto it.
Self Hosted Affiliate Program – Cons:
Obviously, because it’s your own program, you are responsible for everything within the program including promotion. Your affiliate program can only be as successful as the affiliates in it. So you’ll need to recruit as many high-quality affiliates as you can.
If you are already established you’ll have a ready-made audience to promote to, if you don’t, you need to understand that promoting your affiliate program will be your most important job. No affiliates, no affiliate program.
If you’re not a well-known brand, you’ll also have to work hard to be seen as credible to build potential affiliates’ confidence in joining. It goes without saying that equally important is ensuring commissions are paid on time without fail.
With a Self-Service Affiliate Network, you manage your own account, campaigns and affiliates, giving you lots of freedom, but you’re not alone.
You basically plug your products into the network and use the tools and resources to run your affiliate campaigns. It’s your business, so you decide how you want to promote it.
Here’s an example of a self-service network:
As an Advertiser with ClickSure, you can create a campaign to run in their marketplace that allows their 460,000+ affiliates to promote your offers and products.
They currently offer 3 campaign types, CPL (Cost Per Lead), CPA (Cost Per Action) and CPS (Cost Per Sale).
Unlike traditional networks, ClickSure allow Advertisers, Vendors and Affiliates to communicate with each other directly. This enables you to cut out the stress of a middle-man, so you can focus on building relationships and growing your business
Self Service Network – Pros:
As self-service networks are set up specifically to help you run your campaigns efficiently, you’ll get a ton of useful resources, along with expert help. It’s your business, but you’re not working alone.
Another advantage of self-service rather than self-hosting, is that your products or site will be listed in the network’s directory, where affiliates looking for deals to promote can find it. Having a potential instant army of affiliates promoting for you can really speed up the growth of your business.
As these companies have been doing this for years, the time it takes to set up, get things right and move forward will be considerably less than going the self-hosted network route.
Self Service Network – Cons:
You don’t have complete control as it’s not self-hosted, however you still get plenty of freedom to run your business your way.
A managed affiliate network is when you send your campaign/website to the network and they manage everything. So, they act as the agent/middle man between you the product owner and the affiliates.
Here are a couple of the most popular managed networks:
Founded in 1998, Commission Junction has a reputation as one of the leading affiliate advertising networks. It’s a popular affiliate advertising network, bringing advertisers and online publishers with ad space to sell together.
They have more than 3,000 merchants, including Apple, TurboTax and DirecTV, so they’re a big hitter in this business.
A blogger, affiliate or reseller displays ads on their site in exchange for a commission which you pay when visitors to your product page perform a pre-determined action. As usual, this can be filling out a form, subscribing or buying your product.
You have to apply for merchant membership, but if you’re accepted, you get lots of flexibility choosing the affiliate publishers you want promoting your products.
Awin (Affiliate Window now rebranded) is a global affiliate network similar to CJ. It’s a big player with 15 offices worldwide, 900 employees, 100,000 contributing publishers, 6,000 advertisers. In the last financial year they generated £5.4 billion in advertiser revenue and £324 million for its publishers.
Affiliates generate income by promoting Awin advertisers on their websites, via email, search, social media marketing and other popular methods.
They have a fast, user-friendly interface, plenty of sophisticated and easy-to-use tools and widgets, along with regular free training days for merchants.
Managed Affiliate Network – Pros:
As with self-service networks, you can hit the ground running fast with a managed network. The established infrastructure means it’s a piece of cake to bolt your product straight in, with very little work.
Once again the fact that your products are seen immediately by 1000’s of the networks affiliates is one if the biggest benefits of this model. You can effectively have affiliates promoting for you, within days of setting up.
Managed Affiliate Network – Cons:
Once again, the main comparison is with self-hosting and just as with self-service, you don’t get the total control of your program. If that isn’t your priority, a managed network is well worth considering for the speed of set up and profit.
Some of these networks can be expensive to join compared to buying/leasing software for self-hosted option. Some CJ merchants for instance have reported expensive membership fees, so get the numbers right before moving forward.
Also problematic for some, is that PayPal is not available as a payment option with CJ and customer support not available via email, only web based contact form or phone.
As we’ve already mentioned, performance marketing is based on how often an ad viewed, clicked on, generates a lead, or results in a sale. So how does joining a network help?
Clickbooth is a CPA (Cost-Per-Action) & CPC (Cost-Per-Click) Performance Exchange which allows Advertisers to reach new audiences by accessing a large base of affiliates specializing in all traffic types.
They also have extensive targeting capabilities, to focus on your most desirable customers. You also get tools to help merchants and affiliates work together efficiently. When you join the network, you get an interface to upload information about your products, set commissions and anything else regarding your affiliate program.
Your products are then exposed to 1000’s of affiliates already on the network and hunting for new products to promote. For pricing, you have to register on their site and request a quote for your business.
Performance Marketing Network – Pros:
The main benefit to performance marketing networks such as ClickBooth is simply that the client only pays for a specific action that they have pre-agreed. And that’s a really good thing as it’s so easy to manage financially.
The usual performance marketing pricing models are based on a Cost-Per-Acquisition (CPA), Cost-Per-Lead (CPL), Cost-Per-Install (CPI), Cost-Per-Sale (CPS) or a Cost-Per-Click (CPC). This means that unlike other forms of marketing, if the client has their own business metrics correctly in place they should in theory always see an ROI (Return On Investment) from performance marketing campaigns.
Due to the pricing model of the performance marketing industry, the networks only make money if your product is making sales across their affiliate and publisher network.
Which has the added benefit of most networks offering their clients the expertise of their account managers who will not only actively help push their offers to affiliates and publishers, they will also give you valuable insights on how to improve your own customer journeys and sale performance.
After all the more sales, you make the more money they make.
Obviously high volumes of traffic is a great benefit, it’s what we all want. With a little testing and tweaking, you’ll more than likely get all the traffic you need. Then you can continue testing copy, offers etc to push it even further.
There’s a huge variation in the types of affiliates and publishers, which means a great variety of traffic sources. Email, Social, Video, Viral, PPC etc etc. Variation is a great benefit too.
Performance Marketing Network – Cons:
It’s very competitive, which means your offer has to be unique, convert very well or pay more than others in the performance marketing space, to attract top affiliates.
The problem is, this sometimes leads to people paying more than they should and instead of performance marketing being an attractive marketing channel, it ends up being an expensive one.
The network you are working with acts as a middle man between you and the affiliates/ publishers and they make money when you make sales. This can mean that traffic quality can sometimes be hard to control, as it’s out of your hands and you may end up on the end of some traffic generation tactics that you would not approve of.
However, spend a little time working through this, seek expert help and advice from your network and it can be well worth the effort.
The Bottom Line . . .
Basically your choice depends on how much control you want, over how much help, along with speed of results you want.
Using an established affiliate network means you won’t have as much control over how your program operates. If you’d rather have full control over your affiliate program, a self-hosted solution is probably best for you. But remember with self-hosted, it’s ALL on you.
If you want to leave it to the experts and save yourself a load of time, go for the self-service or managed networks. You’ll also benefit from the networks army of affiliates, avoiding the time it takes to recruit, train and manage your own.
You can try out a few for yourself and add them to your marketing plan as you move forward. Or stick with your favourite.
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