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Making the right choices for your business can be an arduous task, especially when it comes to financial decisions like whether to invest in performance marketing. What are the right channels? How much will it cost? Will I see a good return on my investment? Let’s face it, engaging in new marketing tactics can be intimidating.

The experts at DSG understand. We’ve been a leader in executing successful performance-based campaigns in myriad media & verticals over 20 years. Today, we’re breaking down the fundamentals of performance marketing to help you determine if this strategy is right for your business. (Hint: it probably is.)

What is Performance Marketing?

Performance marketing describes media campaigns that are based on specific outcomes.  Whereas awareness or branded marketing is message based and structured to deliver reach and frequency to a target audience, performance marketing is geared toward driving specific user actions (calls, clicks, leads, etc). Rather than paying for the media itself, advertisers are only charged for the desired actions that are performed.

This can be beneficial for many business types, but is often overlooked by business owners who misunderstand the strategies. Performance marketing campaigns aren’t so much of a “set it and forget it” tool as some may expect; rather, they require careful budgeting, monitoring and ongoing optimization to ensure smart spending and prevent a leaky marketing budget.

Types of Performance Marketing

There are numerous types of performance marketing based on an advertiser’s goals. The spectrum of “chargeable events” include views, calls, clicks, leads, acquisitions and sales. Each action represents a certain stage of the “sales funnel” that the advertiser is willing to pay for.

At the top of the funnel is Pay Per Impression or View, where an advertiser is charged for how many times their online banner ad or video is shown. For banner ads, the advertiser is usually charged at a set CPM (cost per thousand ad impressions). Videos are usually charged based on how many times the video is played, and for how long. Both of these tactics are very effective in generating top-of-mind brand awareness when prospects travel further down the sales funnel.

Pay Per Call is a common form of Performance Marketing in which the business pays only for phone calls received from advertising that they’ve placed. Businesses will generally work with media vendors to set desired parameters for call duration and deduplication windows in order to best qualify the calls they are paying for. Businesses that have a heavy focus on phone call leads such as home services, healthcare, and insurance see tremendous success in running Pay Per Call campaigns.

Pay Per Click is another very common Performance Marketing tactic. As the name suggests, this is a fairly straightforward structure where advertisers only pay when their ads are clicked on.  These campaigns are typically conducted within search engines (Google, Bing, Yelp) or social media platforms (Facebook, Instagram, NextDoor). The goal is to have your ad appear at the top of the search engine return page (SERP) or within a user’s newsfeed, so that they will click on it and be directed to your landing page. Pay per Click is ideal for businesses that want scalable, measurable results quickly.

At a more granular level, some marketers deploy more sophisticated campaigns based on the actual conversions that occur once a user is brought to the site. The two primary conversion outcomes that businesses may base their performance on are:

  • Leads: A prospect completes an online lead form, makes an appointment or downloads an app
  • Sales/Acquisitions: The chargeable event is an actual sale or customer acquisition. The transaction can be online (ecommerce) or offline.

Who Uses Performance Marketing?

The customizability that comes with Performance Marketing makes it a solution for businesses of all kinds, from nationwide online companies to local SMBs, regardless of vertical or customer audience. One of the biggest advantages is the precision with which campaigns can be focused at the hyperlocal level, driving only the most relevant leads to individual locations within their footprint. For more detail on hyperlocal strategies, and how they can elevate your marketing, check out this DSG blog.


The key takeaway is to have a strategy for your Performance Marketing campaigns. Your campaigns should be planned out to make the most of your budget, and the choices you make should revolve around the main outcome you wish to achieve. Analyzing and optimizing your campaigns as they run is critical in order to effectively utilize your budget to drive actionable leads that convert to sales.

Follow our blog to learn more about Performance Marketing and how DSG’s customized marketing solutions can help you convert every marketing dollar you spend into measurable value.

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