Usually described as the marketing investments in which you only pay when you get measurable results (eg. pay per view, pay per click, pay per conversion, pay per lead, pay per visit, etc) Performance marketing has become mainstream.
The thing is, we should be able to measure or at least estimate the return of every dollar invested in marketing.
Which even old-school companies have been doing throughout history. (eg. P&G, Unilever, Coca-Cola)
Companies invest so much in marketing to see that investment return.
Whether the investment is on:
a) Building a brand to convince people to trust them / like them / want them so they become customers and recommend them.
b) Giving away discounts to convince people that they can’t afford to let this offer pass by.
c) Showcasing the functions and features that make their product/service better than others to convince people to become customers.
d) Building incentives to generate more worth of mouth (referral) effect so it can acquire more customers and sales.
e) … & many more..
Every penny spent has the same end business goal: to increase revenue for the company. So in reality all investment in marketing is actually planned and managed as “performance marketing” with different measurable results and different time frames in which you can measure those results, but in the end it can all be measured and estimated in order to make beneficial investment decisions for the company’s best interest.
This is why I encourage leadership teams in startups and scale-ups to manage their growth marketing investments with this perspective of “performance” where all investment decisions should be measurable in order to test, learn and scale in a more efficient way for the company’s financial & business health.
What do you think?