Pay for performance marketing is a pricing model in digital marketing. The marketing agency only gets compensation based on specific performance results, such as purchases or leads. For instance, if the marketing agency is tasked with bringing in new leads, they will be paid for each lead that the business gets through the agency’s work.
The marketing agency is tasked with creating marketing campaigns to gather and convert new leads. They then get paid for the leads that they bring after passing them to the business. Therefore, the pay for performance marketing model only pays for the results obtained from the marketing campaign. This model is becoming a shift in the marketing world, and many industries such as manufacturers, distributors, home services (roofers, contractors, windows, etc.) already adopt this model.
When a marketing agency works with this model, they know that they’re only paid for the result they generate. This is very different from the monthly retainer fee which they would get with traditional pricing models. So, the agency must be on its toes and generate solid results for its clients; otherwise, it won’t survive.
