Pay Per Performance Advertising

Written by Seth Cotterell
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Pay per performance advertising is one of the most revolutionary things to happen in the advertising industry in recent memory. Pay per performance advertising is changing the way marketing campaigns are conceived of and carried out. The results of this trend are dramatic, though many people are still unsure what exactly pay per performance advertising is. Let's take a brief look and hopefully clear up some of the confusion surrounding the shift in the advertising industry.

Traditional vs. Pay Per Performance Advertising

To more fully understand what pay per performance advertising is, let's take a look at where it came from. In traditional advertising models, you pay ahead of time for the air time that your commercial will be using. This air time varies depending on the time of day and the season. Thirty second ads during popular sporting events can cost over $1 million. Ads late at night and during off season cost less because it is expected that less people are watching.

The problem with this type of advertising is that there is no way to track its impact. You pay all this money for broadcast airtime that might not be providing any positive results at all. You hope that sales go up as a result of your commercial, but there is no way to really be sure. If you're beginning to question the reasonability of this scenario to yourself, keep reading and you'll see why pay per performance advertising has become such a popular alternative.

Pay per performance advertising differs fundamentally from traditional advertising because you do not pay in advance merely for television airtime. Instead, you only pay for the results your ad generates. You wouldn't pay for car repairs if you couldn't even drive your car out of the mechanic's shop, would you? Of course not, and you shouldn't pay for advertising unless you're sure it works.

How Pay Per Performance Advertising Works

Like traditional advertising, the first thing you do is select a target audience. Once you've targeted your audience, you then create a commercial. Once your commercial is made, it gets aired on television. As calls or other inquiries come in, you pay for those leads or sales. Instead of gambling on success, you pay only for results.

There are many different tools pay per performance advertising companies use, but one of the most popular is the television infomercial. Infomercials allow you to present a vast amount of information in a unique, engaging way. 66 percent of the public watch infomercials regularly, so this is a great way to get your product seen. Infomercials, and the other pay per performance advertising tools, provide a channel of direct response. It is important to be able to track results.

To recap, these are the most prominent pay per performance advertising highlights. The advertising company is affiliated with broadcast networks. It will be able to get your ad seen on hundreds of local or national stations. You do not pay for the airtime. Instead, you are charged for each inquiry, lead, or sale that comes as a direct result of your commercial. If your ad is ineffectual and nobody calls, you do not pay. You can then redesign your advertising strategy. If your ad is very successful and the response volume is high, you pay more, but you'll be happy to do so because that means your ad is doing what it's supposed to and your sales are increasing. You'll only be paying for the positive results your advertising generates.

Benefits of Pay Per Performance Advertising

As you see, pay per performance advertising is quite different from traditional advertising. Its superiority to traditional methods comes from its affordability and its adaptability. The flexibility you get from pay per performance advertising simply can't be matched in traditional advertising. You can manage your advertising campaign in real time and make changes as necessary. Its low cost will also put a smile on your face and its incredible results will put money in your pocket.


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