Glossary / Definition
Performance Marketing.
A marketing approach where payment is based on measurable results, such as sales or leads.
Performance marketing focuses on paying affiliates based on the performance they deliver, aligning incentives between merchants and affiliates. This approach ensures marketing budgets are spent effectively on measurable outcomes rather than impressions or brand awareness alone.
By emphasizing results, performance marketing encourages affiliates to optimize their strategies continuously and focus on driving valuable actions that contribute to business growth. It encompasses various models, including CPA, CPC, CPL, and CPS, allowing for flexible program structures that match business objectives.
Modern performance marketing incorporates advanced analytics, attribution modeling, fraud prevention, and optimization technologies to maximize ROI. In SaaS businesses, performance marketing often focuses on metrics beyond initial acquisition, including trial-to-paid conversion rates, onboarding completion, and customer retention indicators.
Related terms
- Affiliate An individual or company that promotes products for a merchant in exchange for a commission.
- Affiliate Marketing A performance-based marketing strategy where affiliates earn commissions by promoting a merchant's products or services.
- Affiliate Network A platform that connects merchants with affiliates to facilitate affiliate marketing partnerships.
- Affiliate Program A system where a merchant rewards affiliates for driving traffic or sales through their marketing efforts.
- Commission The fee paid to an affiliate for generating a specific action, like a sale or lead.
- Click-Through Rate (CTR) The percentage of people who click on an affiliate link compared to those who view it.
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