Impact of Performance Marketing on eCommerce Stores
- Digital Marketing, eCommerce

Impact of Performance Marketing on eCommerce Stores

Performance marketing refers to paid advertisements and brand marketing; it is paid only when the desirable and measurable target or results are achieved. These targets can be from leads, sales, or others agreed between the advertiser and business.

Performance marketing may involve several channels such as sponsored content, search engine marketing, and affiliate marketing. Unfortunately, many people get confused between digital marketing and performance marketing.

Digital marketing is advertising that uses online channels, which is different from lead generation using performance marketing.

How does Performance Marketing work?

One of the main things that differentiate performance marketing from other marketing tactics is how businesses pay for their marketing campaigns. Instead of paying in months or fixed days or dates, the company pays when a specific action occurs. Performance marketing, especially for eCommerce, may include:

How Performance Marketing Really Works?
So how does Performance Marketing work?

Lead Generation Funnel

When the business wants to grab the attention of a targeted audience to turn them into leads, a lead generation funnel helps companies make their branding more effective by reaching more individuals. Useful and relevant information about the products on different marketing channels will attract the interest of individuals and become a lead.

One of the best lead generation tactics is to generate leads from different apps and webs such as Linkedin as potential individuals leave essential data such as email addresses.

Application Downloads

Organizations with mobile apps may use performance marketing to encourage downloads of that app. In this modern era, many companies have apps, for example, in the food industry, technological industry, etc.

Performance marketing may promote your app to generate more downloads, increasing sales and revenue. In addition, businesses may pay performance marketing advertisers according to the number of downloads. 

Other Metrics

The outcomes a performance marketing campaign can target aren’t just limited to these options. They can be anything until the advertiser, and the business agrees to the terms. Be careful to choose metrics that are meaningful to your business aims.

What are the Channels Used in Performance-Based Marketing for eCommerce Stores? 

SEO-Driven Content Writing

A common potential individual will google it to get information about the product. This is where content writing plays its role. You will be on potential customer radar by posting the finest quality of content and addressing all the questions or queries. Moreover, including links that redirect to landing pages will give several benefits.

Podcasting

Your targeted audience might be readers, watchers, and listeners. In this modern era, podcasts can be a good performance marketing channel for eCommerce stores as you have to tailor your marketing tactics according to the audience’s interests.

You should first identify top podcasts which have a similar audience as your product and should give out essential and relevant information about your store. This will help in building credibility and gaining a passive audience. You may put a link in the podcast so potential customers can easily visit your eCommerce store and get more information about the store.

Affiliate Marketing

Affiliate marketing is a type of online marketing where individuals or agencies receive payment for sending new leads or customers to a business’s website. An individual or agency, known as the affiliate, promotes another company’s product or service.

The affiliate promotes these products or services by linking to them or placing ads for them on their website. The affiliate then receives a payment for every click, lead, or sale generated by the links or ads.

To succeed in performance marketing, it would be convenient for the business to join an affiliate marketing network. That meets all the expectations for a big base of users.

How is Performance Marketing Beneficial for eCommerce Stores?

Performance marketing might be very beneficial for eCommerce stores as there could be several benefits of it which may include:

Measurable Return on Investment

With performance marketing, it’s easy to measure and track the results of marketing the product. As every customer clicks on ads, sign up for your websites and subscriptions or any action you set out to achieve.

As an eCommerce store, you would be able to track and know the performance of marketing straight away. It will also help you be prepared in financial terms when paying for your performance marketing campaign.

You don’t have to Pay until You Achieve Your Desirable Results.

Instead of paying before your services, advertisers will charge when your desired objective is achieved. Small eCommerce stores often like this model since it is friendly to their small budget with the right approach.

Optimize KPI

Key performance indicators (KPIs) may play a vital role in your company’s ability to achieve its goals. Whether your KPIs consist of your customer turnover rate or your percentage of sales from new clients.

Performance marketing allows you to target these metrics directly. Performance marketers are focused on driving higher performance levels for your business. You can optimize your clicks, leads, and various other performance indicators.

When you analyze what you want to achieve, you go for setting your key performance indicators so that achievements can be recognized accurately.

Are there any Drawbacks of Performance Marketing for eCommerce Businesses?

Yes, it may have drawbacks too, which may include:

Fraud

When eCommerce stores don’t work with reputable agencies, they may face fraud. The incentive for fraud is especially high with performance marketing. For example, with black-hat tactics, an agency could drive substantial traffic to your site.

As they’ve accomplished your marketing goal, they can receive payment. However, this may not achieve the eCommerce stores’ target in real and will increase their costs.

Vanity Metrics

These are metrics disguised as beneficial but don’t significantly impact your business’s goal. For example, it is observed that followers of eCommerce stores are increasing in social media, but if sales and revenues are not rising, it is insignificant for your business.

Avoiding vanity metrics is essential in performance marketing. For example, you may never want to pay for metrics that don’t lead to achieving your primary target, e.g., an increase in sales revenue.

High Cost

When you work with reputable agencies, they may charge you high rates. Each month or after an agreed period, you expect the estimated cost of performance marketing, but if the costs shoot up unexpectedly, it may cause issues.

Especially when sales revenues are the same but costs of the business increase due to more clicks and visits on links provided by advertisers, as you’re paying for each sale, you may end up paying more for the same results.

Final Words

Crafting a well-thought eCommerce marketing plan might not be easy, but if the right performance marketing strategies and channels are used, it will do wonders for the eCommerce store, such as boosting sales revenue.

It is suggested to focus on key strategies that have the most investment return (ROI).performance marketing is beneficial for eCommerce stores that want to measure the response of the targeted market towards their product or brand.

Impact of Performance Marketing on eCommerce Stores

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