Performance Marketing

What is performance marketing?

Performance marketing is an umbrella term for online marketing strategies in which advertisers only pay for measurable actions. Unlike traditional branding marketing—where reach and visibility are the main focus—performance marketing concentrates on specific, trackable results such as clicks, leads, downloads, or purchases.

The principle: every euro invested is attributed to an outcome (attribution). This way, you know exactly which campaign, which channel, and which ad format delivers the best return on investment (ROI). Performance marketing is therefore a core component of digital marketing—especially for companies looking to optimise their customer acquisition cost.

The most important performance marketing channels

Depending on your objectives and target audience, different channels are suitable:

Search Engine Advertising (SEA)

Google Ads is the classic: you bid on keywords and pay per click (CPC). Ideal for users with high purchase intent who are actively searching for your solution. Complement SEA with organic SEO for maximum visibility.

Social media advertising

Meta (Facebook/Instagram), LinkedIn, TikTok—each platform offers precise targeting. B2B companies reach decision-makers best via LinkedIn Ads, while B2C brands rely on Meta and TikTok.

Display and programmatic advertising

Banner ads on websites, delivered automatically via real-time bidding. Ideal for retargeting—i.e., re-engaging website visitors who have not yet converted.

Affiliate marketing

Partners (affiliates) promote your product and receive a commission per conversion. A low-risk model, as you only pay when it works.

Key metrics and KPIs

Performance marketing runs on data. You need to know these KPIs:

• CPC (Cost per Click): Cost per click—the basis of all paid search campaigns
• CPM (Cost per Mille): Cost per 1,000 impressions—relevant for awareness campaigns
• CTR (Click-Through Rate): Ratio of clicks to impressions—an indicator of ad relevance
• Conversion Rate: Share of visitors who complete a desired action
• CAC: Total cost of acquiring a new customer
• ROAS (Return on Ad Spend): Revenue per euro spent on advertising
• CLV: Long-term customer value—crucial for assessing whether acquisition costs are worthwhile

Developing a performance marketing strategy

A successful strategy follows a clear framework:

1. Define goals and budget

What is your primary goal? Lead generation, e-commerce sales, app downloads? Define a target CAC based on your customer lifetime value.

2. Target audience and targeting

Use the platforms’ targeting options: demographics, interests, behaviour, lookalike audiences. Analyse the customer journey to identify the right touchpoints.

3. Creative and ad development

Create multiple ad variants for A/B tests. Test different headlines, images, CTAs, and landing pages.

4. Set up tracking

Implement robust conversion tracking. Without precise data, performance marketing is blind. Use UTM parameters, pixels, and server-side tracking.

5. Launch, test, optimise

Start with small budgets, test systematically, and scale what works. Performance marketing is an iterative process.

Optimising campaigns

Continuous optimisation is what separates good performance marketing from average:

• A/B testing: Systematically test every element—from the ad and landing page to the CTA
• Bid strategies: Use automated bidding strategies (Smart Bidding) for more efficient delivery
• Audience refinement: Refine your audiences based on performance data
• Landing page optimisation: The best ad is useless if the landing page has poor user experience
• Funnel optimisation: Analyse the entire sales funnel and identify drop-off points
• Marketing automation: Automate follow-ups and nurturing sequences for generated leads

Performance marketing vs. content marketing

Performance marketing and content marketing are not opposites—they complement each other:

• Performance marketing: Immediate results, scalable, but costly if used continuously
• Content marketing: Slower build-up, but more sustainable traffic without ongoing ad spend
• Ideal combination: Use performance marketing to promote content and collect data quickly. At the same time, invest in organic channels (SEO, local SEO) for long-term results

Distributing thought leadership content via paid channels is a particularly effective strategy in B2B marketing.

Common mistakes in performance marketing

• No tracking: Without proper conversion tracking, you are throwing money out the window
• Targeting too broadly: The more precise the audience, the better the performance
• Only one variant: Without A/B testing, you are leaving optimisation potential on the table
• Ignoring the landing page: The ad brings visitors—the landing page must convert
• No retargeting: Up to 97% of first-time visitors do not convert on the first touchpoint
• Not considering CLV: If you only look at CAC without knowing CLV, you will optimise the wrong way

Frequently Asked Questions