Performance Marketing

How Performance Marketing Fuels E-Commerce Growth

The sad reality of the advertising world is that you can’t know if you will get the results you are paying for until after the campaign is over. Several variables are involved in making an ad campaign successful, and it doesn’t matter how many leads you get unless they are targeted and of high quality. 

That’s why savvy advertisers recommend shifting your focus to key performance indicators meant to get you the results you are looking for: sales, conversions, and leads. This is a much better strategy than spending your ad dollars on clicks and impressions, hoping for the best.

But, unfortunately, studies have proved that over 70 percent of advertisers do not have an integrated or consistent content strategy, which is necessary to ace those top 3 metrics. 

However, business leaders are increasingly focusing on the Return On Ad Spend (ROAS) from digital advertising, so a performance marketing model is more used. 

You get to see results upfront with performance marketing, or else you don’t have to pay. As a result, performance marketing strategies are growing in popularity, seen by the fact that affiliate marketing accounts for almost 15 percent of all the revenue in the digital media industry.

Let’s take a look at how performance marketing is the safest way to grow your e-commerce business.

How Performance Marketing Works

Performance marketing combines innovation and advertising to help affiliates and retailers grow their business, even during uncertain times. Since campaigns are laser-targeted, it helps create a win-win opportunity for both affiliates and retailers.

There are three main components you need to execute a successful performance marketing strategy:

  • A goal
  • An affiliate partner or publisher
  • Commission Rate

The advertiser seeks out an affiliate partner, either a publishing authority or an influencer.

However, you first have to outline your goals. For instance, if your objective for this quarter is to gain over 5000 leads, you will instruct the publisher to direct all traffic to a chosen landing page. And they will earn a commission only after a user fills out the form on your site.

There are specific systems in place that allow advertisers to know which affiliate helped you get which lead. The most common way is for marketers to give their partners a particular code or link that helps them track where conversions are coming from.

The Advantages of Performance Marketing

There are several reasons to use performance marketing, such as:

Low Risk

As touched upon earlier, for small businesses just starting out, digital performance marketing is the lowest risk option, as payment will only be required of you after you make sales or get conversions. In addition, performance marketers will be monitoring your campaigns throughout and tweak ads if they seem to be failing.


A study showed how 42 percent of marketing professionals felt that not getting accurate data caused a hindrance in lead generation. With most ad campaigns, you cannot see the extent to which your efforts are bearing fruit.

However, with performance marketing, you can see the results. The affiliate network you are using will be logging the campaign metrics you choose. This will allow you to know if you are getting good quality conversions.

Increased ROI

Performance marketing helps you get a higher ROI, making it a less risky option for merchants. In addition, since businesses are only required to pay for what is requested, performance marketers can set up the estimated profit potential. 

Since a commission rate is set for affiliates, marketers can accurately determine the profit margin and avoid last-minute surprises.

Better Advertising Reach

Performance marketing helps you expand your marketing efforts, as affiliates use several methods when promoting products. 

Through performance marketing, you can benefit from other marketing methods such as:

  • PPC ads
  • Product reviews
  • Email marketing
  • YouTube Videos
  • Product reviews
  • Banner ads
  • Facebook groups
  • Blogging

Validation By A Third Party

Instead of claiming how great your brand is, others will be saying it for you. Performance marketing makes use of third-party validation through affiliates and influencers praising and promoting your products. 

This is also helpful to know that 92 percent of buyers make a purchase only after they read an authentic review.

In Conclusion

Seeing as to how over 80 percent of advertisers in the U.S. now use affiliate marketing, it is safe to say that this method is truly effective. 

Not only is it a safe, risk-free way to advertise your products, but it can also show you how your reach is growing.