Performance Marketing, also known as results-based marketing, is a term many may have come across online or heard in passing. For those not in the marketing world, it might still sound unfamiliar but the concept itself is actually quite straightforward.
Performance Marketing follows a clear and systematic process: it starts with setting specific goals, selecting the right marketing channels, preparing the creative content and messaging, continuously tracking results throughout the campaign, and finally, measuring the outcomes once the campaign concludes.
Even just from this first paragraph, you can already sense how structured, precise, and cost-effective this type of marketing approach is. If you want to dive deeper, keep reading, the following sections provide a simple and practical summary of what is performance marketing, designed to be both easy to understand and easy to apply.
Table of Contents
What is Performance Marketing?
If you’re wondering what is performance marketing, this article offers a clear and simple explanation. At its core, Performance Marketing is a type of digital marketing where businesses only pay for actual results, whether that’s an increase in sales, more service users, or the number of leads who fill out a form as targeted.
These results can be clearly tracked and measured using key performance indicators such as ROI (Return on Investment), ROAS (Return on Advertising Spend), and other metrics, depending on the campaign’s goals and the marketer’s or business owner’s preferences. Importantly, performance marketing is not just about running ads.
Unlike traditional marketing, where businesses often pay large sums upfront without knowing if they’ll get measurable results, performance marketing helps reduce risk by charging only when the desired outcome is achieved.
Another key advantage of performance marketing is its flexibility. Businesses can choose from a variety of strategies under this approach, including different channels, techniques, and campaign objectives, which we’ll break down in the following sections.
Branding Marketing
Even for well-established or saturated brands, performance marketing can help boost brand visibility through strategies focused on awareness. These might include social media campaigns, native ads, and content marketing, all targeted at specific audiences.
By identifying pain points and encouraging meaningful action, performance marketing helps people recognize and remember the brand to build a strong image that shows how the brand truly meets customer needs.
Affiliate Marketing
Affiliate Marketing is one of the clearest examples of performance marketing. In this model, businesses work with third parties like influencers or bloggers who promote their products or services.
These affiliates encourage specific actions; like clicks, visits, or purchases, and only get paid when those desired outcomes happen. This gives businesses better budget control and a clearer picture of what’s working.
Programmatic Marketing
Programmatic Marketing is a powerful tool that makes ad buying more precise and cost-effective. Using automated systems, it targets the right audience, bids the right price, and delivers a higher return on investment (ROI).
It also provides real-time, in-depth data analysis, allowing advertisers to quickly adjust their strategies for even better performance.
What Are the Benefits of Performance Marketing?
Now that you understand the concept, let’s explore the next key question: What are the benefits of performance marketing? In this section, we’ll take a closer look at how businesses can leverage this approach to grow effectively and make the most of their advertising budget.
Performance marketing doesn’t just offer measurable outcomes. It also gives businesses the freedom to test new strategies, reduce investment risks, and generate tangible returns at every stage of the campaign.
1. Efficient Budget Planning
One of the standout advantages of performance marketing is precise budget control. Businesses can clearly define how much to spend on each platform and only pay when a specific result occurs, whether it’s a click, a registration, or a purchase.
This makes it ideal for small businesses with limited budgets and large enterprises looking to optimize every dollar spent. It minimizes overspending and ensures full transparency when calculating return on investment (ROI).
2. More Accurate Targeting
Another strong benefit of performance marketing is its ability to target specific audiences in great detail. Marketers can segment by age, gender, interests, income level, behavior, location, and even online activity.
This precision allows brands to deliver their products or services to the right people, increasing the chances of conversion and reducing ad waste by avoiding irrelevant audiences.
3. Real-Time Strategy Adjustments Based on Live Data
Because performance marketing operates on digital platforms, it enables real-time tracking. Businesses can instantly see which ads are performing well and which are not. Based on that data, they can adjust messaging, visuals, targeting, or platforms right away.
This agility improves overall campaign performance and shortens the feedback loop, helping businesses seize opportunities instead of waiting for results that may come too late.
4. Measurable and Verifiable Results
So, what is the key strength of performance marketing? Without a doubt, it’s the ability to measure and verify outcomes at every stage.
For example, if the goal is to generate 2,000 leads, performance marketing allows for precise tracking to see if the goal was met, and if not, how far off it was. You can also calculate cost per lead, making it easier to evaluate campaign efficiency.
These clear results help marketers adjust future plans using real, data-backed insights.
How Do You Measure Performance Marketing Effectiveness?
If you ask, what is at the heart of performance marketing? The answer is simple: measurable, trackable results, with a heavy focus on ROI (Return on Investment).
Every user action, whether it’s a click, sign-up, or purchases tracked, analyzed, and compared against pre-set KPIs to assess how well the campaign performed.
To evaluate this effectively, marketers use a range of important metrics, each offering different insights into campaign costs, performance, and value. Let’s take a look at the most commonly used ones:
1. CPM (Cost Per Mille)
What it measures: The cost to show your ad 1,000 times
Best for: Brand awareness campaigns
Formula | CPM = (Ad Spend × 1,000) ÷ Total Impressions |
Example | CPM = (20,000 baht × 1,000) ÷ 300,000 impressions ⇒ CPM = 66.66 baht |
2. ROAS (Return on Ad Spend)
What it measures: How much revenue you earn for every baht/dollar spent on ads
Best For: Sales-driven campaigns
Formula | ROAS = Revenue from Ads ÷ Ad Spend |
Example | ROAS = 500,000 baht revenue ÷ 100,000 baht ad spend ⇒ ROAS = 5x (or 500%) |
3. CPC (Cost Per Click)
What it measures: The average cost per click on your ad
Best for: Driving traffic to a website or landing page
Formula | CPC = Ad Spend ÷ Total Clicks |
Example | CPC = 10,000 baht ÷ 20,000 clicks ⇒ CPC = 0.5 Baht |
4. CVR (Conversion Rate)
What it measures: The percentage of visitors who take a desired action (purchase, sign-up, etc.)
Best For: Landing page and funnel optimization
Formula | CVR = (Number of Conversions ÷ Total Visitors) × 100 |
Example | CVR = (1,200 purchases ÷ 3,000 visitors) × 100 ⇒ CVR = 40% |
5. CPA (Cost Per Acquisition)
What it measures: The average cost to acquire one conversion (e.g., a sign-up or purchase)
Best For: Cost control in lead or sales campaigns
Formula | CPA = Ad Spend ÷ Total Conversions |
Example | CPA = 50,000 baht ad spend ÷ 6,000 purchases ⇒ CPA = 8.33 baht |
5 Key Steps: What Is the Process of Performance Marketing?
From the previous section, you now understand what performance marketing is and the many benefits it offers. It’s clear that this approach is highly cost-effective and well-suited for modern businesses. In this section, we’ll break down the 5 key steps that make performance marketing even more impactful and results-driven:
1. Plan and Define Your Performance Marketing Campaign Goals
The first step in answering “What is the process of performance marketing?” is to clearly define the goals and outcomes your business wants to achieve before launching the campaign.
For example:
- You may want to pay only when a potential customer fills out a registration form to book a home viewing (Cost Per Lead).
- Or you might pay when someone clicks on your ad introducing a new electric car model (Cost Per Click).
By setting specific performance-based goals upfront, you ensure that every ad dollar goes toward driving real, measurable actions.
2. Choose the Right Channels for Your Performance Marketing
When thinking about “how to choose the right channels for performance marketing,” the key is understanding your target audience’s online behavior through buyer persona research.
For example:
- Are they scrolling Facebook feeds daily?
- Do they post lifestyle photos on Instagram?
- Do they binge-watch videos on TikTok?
- Do they regularly shop on platforms like Lazada?
Once you know where your audience hangs out, you can choose the best-fit marketing channels, such as:
- Social Media Marketing – Ads on Facebook or Instagram feeds
- Affiliate Marketing – Paying influencers or bloggers to promote your product or service
- Display Ads – Banner or pop-up ads across websites
- Native Ads – Ads that blend in with content, often found at the end of articles
- Search Engine Marketing (SEM) – Paid search ads that appear at the top of Google when users search for relevant keywords
3. Create Content That Matches Your Target Audience
Once you’ve chosen the right marketing channels and analyzed your audience’s online behavior, the next step is to understand their pain points and how your product or service solves them.
Then, create content, whether static images or videos, that aligns with their behavior and grabs attention from the very first second.
Make sure the copy and visuals are compelling enough to stop them from scrolling and prompt them to take action, whether it’s clicking, signing up, or making a purchase.
4. Monitor Campaign Performance and Optimize Along the Way
As mentioned earlier, a major strength of performance marketing is the ability to track and analyze campaigns in real time.
This means you can:
- Monitor how well your campaign is performing at any stage.
- Identify opportunities to optimize the campaign for better results.
Whether it’s tweaking your ad copy, adjusting targeting, or reallocating budget across platforms, this step is crucial for ensuring your campaign delivers maximum return on your investment.
5. Evaluate Results and Learn From the Campaign
Once the campaign period ends, it’s time to evaluate performance. Compare the actual results against the original goals:
- Did the campaign meet its KPIs?
- What strategies or techniques worked best?
- Were there any weaknesses or issues that need improvement?
This post-campaign analysis helps your business gain valuable insights and refine future performance marketing efforts for even better results.
Why Convert Cake for Performance Marketing?
In a digital landscape where results matter more than reach, Performance Marketing is the strategy that drives true business growth, and this is where Convert Cake excels. We don’t just generate clicks or impressions; we deliver measurable ROI by building campaigns that focus on conversions, sales, and long-term customer value. With a strong data-driven foundation, we analyze real user behavior, map full-funnel strategies, and constantly optimize for performance at every step, from awareness to retention.
Convert Cake’s Performance Marketing Expertise
- Full-funnel strategy planning that aligns with the customer journey
- Hyper-targeted ad campaigns with smart audience segmentation
- Creative designed specifically to convert, not just look good
- Precise tracking systems with real-time performance dashboards
- SEO-aligned content tailored to drive both traffic and action
- Scalable ad structures built for long-term, sustainable ROI
- Business-minded thinking with deep understanding of each brand
- Transparent execution: no hidden fees, only clear results and support
Conclusion
Now that you understand the concept, benefits, and key steps of performance marketing, you might be wondering how to get started, or how to avoid wasting time and budget on trial and error. That’s where Convert Cake comes in.
We are a specialized performance marketing agency with proven expertise and hands-on experience working with a wide range of businesses, from SMEs to global brands.
If you’re ready to drive measurable growth and achieve your business goals with confidence, contact Convert Cake for professional Paid Media services today.
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