All you need to know about performance marketing

Performance marketing is an approach that can help marketers optimize growth, identify new revenue streams, and other innovative ways to reach their goals. For example, 92% of marketing agencies are increasing the time, resources, and budget for marketing automation integration. Over 75% of marketers are reporting on how their marketing is influencing revenue. In this guide, we define performance marketing, outline how it works, and share best practices so you can get the most out of this popular marketing method.

Performance marketing is an incredibly fast-paced and fast-changing industry and it is crucial to keep up with the latest industry trends that will set you apart from the competition. We have selected a number of must-read publications for performance marketing experts that cover all you need to know about it in 2021.


What is performance marketing?

Performance marketing is a marketing method where advertisers pay for the number of actions – such as Installs and clicks – completed by users. There must be a measurable result for the publisher to receive payment, offering a different approach to the traditional method of paying to display an ad. This is a goal-driven approach to marketing that requires you to adapt and optimize your strategy based on performance results. The KPIs that align with your company goals can include metrics such as lead generation, installschurnretention rateROAS, and ROI.

Learn more about “What are performance marketing campaigns?

what is performance marketing


How does performance marketing work?

Performance marketing is mutually beneficial for advertisers and publishers because it enables both parties to target campaigns according to their KPIs. Moreover, paying for completed actions means advertisers can be confident they are getting a fair deal. Advertisers also benefit from free brand exposure to users that do not click on the ad.

There are four groups in the performance marketing ecosystem:

  • Advertisers are looking for ways to advertise their products. For example, a mobile game that wants to generate installs and ROAS.
  • Publishers (which includes Affiliate Partners) have advertising space that can be used by the Advertiser. For example, this could be a website or mobile app with advertising options such as banner ads, interstitial ads, and video ads.
  • Third-party tracking platforms: Advertisers can work with a tracking platform to track performance and gain valuable analytics that enables them to make strategic changes and push towards their targets. Also known as affiliate networks, this is a critical component of the performance marketing ecosystem. These third-party platforms can also be used for payments to publishers and strategy consultation.
  • Affiliate managers: These can be in-house members of an advertiser’s team or a specialist agency hired by the advertiser. Their task is to use their expertise to connect affiliate networks and optimize performance.


Learn more about “What makes a good performance marketer


How does affiliate marketing work?

Affiliate marketing is the promotion of products through affiliates who take a commission for connecting an advertiser with their target audience. The affiliate partner receives an agreed amount from the advertiser for every conversion, install, or sign-up driven by their promotional efforts. Commission rates and monetization models will vary depending on the nature of the product but this is agreed upon before promotion.

This includes models such as CPM (Cost Per Thousand), CPC (Cost Per Click), and CPA (Cost Per Action). This s a low-risk performance-based strategy that only costs the advertiser money for the conversions generated by the affiliate partner. You can work with companies such as Apptrust, Liftoff, and Vungle to leverage the benefits of affiliate marketing.

Learn more about “Everything you need to know to develop your affiliate marketing strategy in 2021”


Performance marketing strategies

Here are three examples of performance marketing strategies that can be included as part of your overall strategy:

Dynamic remarketing: A benefit of performance marketing is the ability to personalize the user experience and optimize results. You can use the data you have acquired to practice dynamic remarketing. For example, if a user has left items in their cart in your e-commerce app you can target them and push them further down the funnel. For mobile games, this could be incentivizing users to complete the next level by offering them an extra life or discount on in-app purchases. Remarketing ads can be served in several places such as social media, search ads, and display ads.

Learn more about “How Your Gaming App Can Benefit from Partner Marketing

Influencer marketing: Working with influencers is a smart way to reach your target audience. You can include influencer marketing in your performance marketing strategy by agreeing on performance-based rewards. For example, you can agree to a Cost-per-Click (CPC) business model to ensure that you are only paying influencers for the user activity. An additional advantage to this scenario is that you gain brand awareness with an influencer’s audience even if the CTR is low.

what is performance marketing


SEO: An official blog for your brand can generate leads, sales and increase exposure. You can create a blog and practice SEO to gain a higher ranking on search engines. This can be a smart way to reach your target audience who haven’t heard of your brand by targeting keywords related to the pain points and your product’s USP. Moreover, SEO is a data-driven marketing method that can be improved over time.

Email marketing: Creating a mailing list can be a powerful strategy for driving revenue, retention, and brand reputation. Moreover, an influencer’s mailing list can be useful to brands when trying to reach their target audience.

Learn more about “Performance Marketing Strategies”


How do performance marketing platforms work?

Performance marketing platforms offer several ways to advertise your product, including the methods listed above. Users will be exposed to ads depending on a combination of factors such as:

  • Audience targetingAdvertisers can set the type of user they would like to see their ad, which will be matched based on user behavior and information that allows audience segmentation.
  • Conversion rate: On the one hand, when an ad successfully converts users, this can gain increased exposure for better results. On the other hand, if your ad doesn’t convert, the network may give it less exposure to its audience.


Learn more about “How do Performance Marketing Platforms work?


What are the benefits of performance marketing? What features to look for when picking a performance marketing software?


Performance marketing offers several advantages that can benefit businesses, including:


  • Measurable and trackable results: Performance marketing allows you to track and measure the effectiveness of your campaigns accurately. You only pay when a specific action is taken, such as clicking a link or submitting contact information. This feature gives businesses an edge in optimizing their campaigns and improving their return on investment.


  • Expanded reach: Performance marketing allows businesses to publish ads on various online platforms, reaching their target audience more quickly. This approach builds brand awareness and provides flexibility in payment formats, making it a cost-effective option for businesses.


Performance marketing can help businesses achieve their desired outcomes by improving their campaign’s efficiency and reducing costs.


The purpose of performance marketing software is to help businesses monitor, measure and improve the performance of their digital marketing campaigns based on predetermined metrics. 


Ad networks, agencies, and advertisers typically use a performance marketing platform for pay-for-performance advertising models like affiliate marketing and pay-per-click (PPC) campaigns. 


Here are some of the features that you should look for when picking a performance marketing platform:




  • A/B testing: This capability allows advertisers to test and improve different elements of marketing campaigns, such as landing pages and ad copy. 


Swaarm offers a unique analytics tool called Explorer that allows marketers to slice and dice real-time data for informed decision-making. When advertisers use a performance marketing software, businesses can optimize their marketing campaigns to achieve desired outcomes and increase their return on investment (ROI).

Learn more about “Everything you should know about performance marketing. Why do you require a performance marketing platform?


What is performance marketing tracking platform? Managed Vs. In-house marketing tracking platform — which one is better?


A performance marketing tracking platform helps advertisers monitor critical metrics such as clicks, conversions, leads, bounce rate, etc. They can gauge the marketing campaigns better when they use tracking software. When it comes to the software, there are two options, one is to build your own platform, and another option is to use managed services. Which one is the best for you? 


Managed services: Many companies have already built performance marketing tracking platforms. It may be the best option for many businesses that want to scale faster to use their services. You need to pay a subscription fee to the company to use their platform. This fee might be charged to you once every month or year. Some of these platforms have unique features that can help boost your efficiency. 


For example, with the performance marketing tracking platform that Swaarm developed, you can prevent fraud using optimization rules and use workflows to automate tedious manual tasks that might take a lot of your time. The main drawbacks of using a managed service are that you will have recurring expenses, and you should be willing to consent to third-party vendors’ terms and conditions. 


In-house: Developing performance marketing software using your in-house teams is another way to keep track of your key marketing metrics. However, this method requires you to spend a lot of money on software development and maintenance. 


You also need the right talent to assist you in this whole process. While it is both time-consuming and costly, it can help you design and build a platform that best fits your requirement. 


Learn more about “Managed versus in-house performance marketing tracking platforms.


What are the top-performing marketing channels?

There are several channels available to advertisers when practicing performance marketing. Here are three of the most popular methods that can be used to reach your target audience.

  • Affiliate marketing: This is an arrangement when an advertiser gives commission to affiliate partners for traffic and sales generated as a result of their exposure. 94% of publishers use multiple affiliate marketing networks and 65% of affiliate marketers generate traffic by blogging.
  • Social media advertising: This is the practice of advertising on social media to drive installs and revenue. Social media offers large audiences that can be targeted by advertisers. Social platforms gained 1.3 million users every day in 2020 and 90% of people with access to the internet use social media.
  • Search engine advertisingSearch engines such as Google, Bing, and Baidu offer advertising options. This means your products can appear for search terms that are relevant to your brand, increasing exposure and driving installs.


Learn more about “How to choose a marketing channel?

what is performance marketing


How is performance marketing different from brand marketing?

The main difference between performance marketing and other methods, such as brand marketing, is the focus on a measurable result. With this, there is no payment to the publisher for exposing a user to the ad. Important performance marketing metrics include revenue, installs, and retention. On the contrary, brand marketing acknowledges the value of metrics such as impressions, reach, and likes. Marketers can use both types of digital marketing depending on the aim of their campaign and how they want to measure success.

Learn more about “How do brand and performance marketing work together?


Best practices for successful performance marketing

1. Use campaigns to test and experiment

Every campaign is an opportunity to test, optimize and experiment for the best results. For example, this includes A/B testing your ad creativity and optimizing your ads over time. When A/B testing, remember to develop a hypothesis using your analytics and knowledge of your target audience. You should know what you want to test and what you expect from each variable, including considerations about your target audience and how you will respond if your hypothesis is proven or disproven.

2. Your long-term goals should be considered when adapting your strategy

Continuously adapting your performance marketing strategy based on new information is a smart way to stay ahead of the curve and optimize your campaigns. This will help you improve key metrics such as CTR, retention, and churn. However, you also need to stay true to your long-term goals. At every step of your optimization, consider whether these changes are beneficial to your brand in the long run in addition to making a short-term impact.

Learn more about “Successful Performance Marketing: 8 best practices you need to follow in 2021

3. Gather all your data sources

If you are practicing performance marketing across several channels – from search engine advertising to social media – you should consider all the ways you can learn from this data. Each channel will provide data on your most valuable customers which in turn helps you target similar users and maximize revenue. Ensure that you can create lookalike audiences from each channel for the best results. This valuable data will also inform your hypothesis when testing.

Relationship-building is also a key part of achieving success within the industry. Establishing positive liaisons with fellow stakeholders can lead to boosting your company’s income and generating more brand advocacy. Performance marketing conferences are the ideal place to educate yourself on all the latest trends, which is another key requirement for any performance marketer worth their salt.

Learn more about “The best performance marketing conferences in 2021 and 2022”


How to measure performance marketing campaigns

Advertisers should work with a tracking platform to measure performance marketing campaigns. Mobile measurement companies enable you to gather data relevant to your goals, including the metric that is part of your payment model. For example, you can use a tracking platform to measure how many installs were generated as a result of each campaign.

Learn more about “The Key metrics for performance marketing campaigns

In addition to gaining critical data that can be used to optimize performance, tracking platforms have several other benefits. For example, Swaarm is designed to make it faster and easier to manage your campaigns. We have innovative automation tools, fraud prevention technology and offer the highest level of platform stability.

Learn more about “How to measure performance marketing campaigns in 2021


Summary of performance marketing

Performance marketing empowers marketers to make data-driven decisions and optimize results over time. You only pay for the number of actions completed by users, such as Installs and clicks. This is an ecosystem that includes advertisers, publishers, third-party tracking platforms, and affiliate managers. You can gain the benefits of performance marketing for methods such as native advertising, affiliate marketing, social media advertising, and search engine advertising. Due to the nature of performance marketing, gathering data is critical to measurement and optimization over time.

You may also want to read: “Mobile tracking: Which cost model is the best investment?”

Swaarm is an affordable, easy-to-use platform for successfully measuring, optimizing, and automating your marketing efforts. Contact us to find out how our innovative technology can help you grow your business at scale.