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Why Brands Are Now Investing in Performance Marketing

Manu Gupta, AVP, Digital Success at ET Medialabs Private Limited, says inspite of being met with an initial resistance, performance marketing is now a sought after mode with big brands.

Why Brands Are Now Investing in Performance Marketing

Thursday September 02, 2021 , 4 min Read

The Covid-19 pandemic has forced people into their homes, and brands into the realm of the internet. As sales from walk-in stores have dwindled, companies have been compelled to rethink their advertisement strategies.


This involves not only startups that are quick to identify performance marketing as the preferred method, but also established brands that previously relied on their physical customers and stores for a large chunk of their revenue. The returns on commercial public advertising using billboards, storefronts and displays have reduced a lot.


However, brands can now apply data-driven performance marketing effectively to their marketing and branding efforts, making it a part of their larger strategy.


By understanding consumer preferences, patterns and behaviours early on in their purchase journey, companies have reported achieving marketing efficiency profits of nearly 30 percent and top-line growth of up to 10 percent without the need to increase marketing budget. On an average, the impact is remarkably higher than that of established ROI methods of marketing.


As companies manage the repercussions of Covid-19, the precision in branding has become particularly critical, especially in the early stages of the customer’s decision journey.


Performance marketing, thus, has the potential to give marketers a competitive edge for reaching out to their target audience groups during and post pandemic.

Understanding performance marketing

In simple terms, performance marketing refers to online marketing and advertising programmes where advertisers pay only when a specific action occurs. These actions can include a generated lead, a click, a sale and much more.


It uses digital automation and big data to develop more customer-centric and personalised campaigns. It provides marketers with all the tools that they need to elevate and modernise their brand marketing.


Besides, through performance marketing, companies can also reduce their risk, increase their market reach, and reduce budgets while growing their brand and revenue streams. In addition, this form of marketing is transparent, more effective and completely measurable.


In fact, it allows brands to track the entire buyer journeys of every customer, and identify those areas, channels and partners where they can make more investments to achieve better outcomes.


In performance marketing, since brands only pay once the desired action gets completed, the risks involved and the cost-per-acquisition (CPA) are much lower and the ROI is higher.


This leaves more space for other marketing strategies to be included in the budget, which can be tested, and help a brand expand and grow to be at par with others.

Why brands need performance marketing

Given the remarkable improvements in data-tracking technologies, there has been an evident shift from brand marketing alone to performance marketing. However, both aren’t exclusive of each other. Many people think performance marketing is only about the numbers, and to a major extent, it is.


But performance marketing done without being guided by the branding principle only gives a short-term win. On the other hand, when it is done using brand as a guide, companies not only get the best results from their campaigns but even build a brand image for themselves in the process.


When brands add performance marketing to their growth and online marketing mix, they get good returns on it. It enables micro- and macro- targeting of audiences.


Accumulating and analysing data collected from in-depth marketing campaigns helps improve results with time, so that even after the lockdown is lifted, brands will be able to hit the ground running and have a head start in the field.


Access to vast amounts of data about customer behaviour along with automation capabilities has given brands the perfect opportunity to optimise their marketing strategies for a much greater business impact.


The accurate data points on consumer behaviours and purchasing patterns allow marketers to create more personalised marketing campaigns, and in turn, boost performance. Moreover, automation makes it easier for marketers to scale their campaigns more effectively and make real-time adjustments.

Summing Up

Performance marketing is now at par with other forms of marketing, and proven to be even more effective and result-oriented. With this kind of growth trajectory, more brands are taking to it and investing in it.


When newly introduced, performance marketing is often met with resistance, doubts and scepticism by brands. But when the value and potential of this form of marketing is fully realised and demonstrated, companies are quick to adopt it.


Edited by Anju Narayanan

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)