A relatively new development in the advertising and marketing field, performance marketing is a unique combination of innovation and advertising. By harnessing the power of the internet, advertisers and marketing companies have direct and comprehensive strategy for promoting products and services. Based on the specific actions of users on a website – either the completion of a sale, or the click of a banner ad – the marketing company is paid only when the user performs those actions. The advertiser pays only based on clicks, and the marketing company has hard data to show exactly who is responding to specific advertising methods.

As one of the newest aspects of marketing plans, performance marketing is still developing and growing. The potential for new forms of performance marketing techniques is huge – developers are working on performance marketing for cell phones, digital media and other ways of reaching potential customers. Performance marketing is structured through advertising campaigns that are generated specifically for a retailer. The retailer and its affiliates are both the beneficiaries of a successful campaign. With paid per click/sale/completion the retailer only pays for what is used, and the affiliate is rewarded for creating a successful campaign.

Measurement tools allow the advertiser to use analytics to discover virtually every aspect of the customer interaction, and make adjustments to maximize the successful campaigns. This allows the retailer to evaluate on a cost basis the financial investment of reaching a new customer, or to discover the average value of orders placed online.

The information that is collected through performance marketing is verifiable, real-time information that a company can use to build not only additional marketing campaigns, but to develop products and services that are in demand, while eliminating unused material. This type of marketing is valuable to companies of every size, from the smallest corporations to Fortune 500 companies.