What is performance marketing?
Performance marketing is a type of marketing where advertisers pay only after a specific result happens, not before the ad even runs.
The non-profit Performance Marketing Association defines it as online marketing and advertising programs where advertisers pay marketing companies when a specific action is completed, such as a sale, lead, or click. That action can take different forms depending on the campaign, a set number of clicks, a percentage of a video watched, a completed call to action, or, in mobile performance marketing specifically, an app install.
How is performance marketing different from other forms of marketing?
In more traditional types of marketing, the payment scheme is reversed: the advertiser pays upfront and then the publisher runs the ads. This has its place, especially for raising brand awareness.
The table below summarizes the key differences.
Brand marketing does have its drawbacks. Metrics such as likes, favorites, retweets, and perceived equivalent media value all carry some weight, but they rarely show up clearly on a client's bottom line.
With consumers facing a screen almost constantly and hundreds of companies competing for their attention every day, it's no surprise more marketers are turning to performance marketing to focus on results that are easier to track.
What are some examples of performance marketing?
There are quite a few types of performance marketing, depending on the channel. You can run performance marketing campaigns on in-app ad networks like Unity Ads, social media channels like TikTok or Facebook, or even search channels like Apple Search Ads.
Unity Ads uses Vector, Unity's AI-powered ad platform, to match games with the right players and optimize bidding toward measurable outcomes.
Here's how that plays out for real studios:
How Voodoo unlocked growth at scale with Vector
Voodoo diversified its UA strategy using Unity Ads powered by Vector, unlocking stronger in-app purchase ROAS campaign performance for its titles. Read the case study.
How Playrix grew Gardenscapes with a CPE offerwall
Playrix used the ironSource offerwall to run a cost-per-engagement campaign for Gardenscapes, increasing quality installs by 1,500 percent. Read the case study.
How Metacore boosted IAP and ARPDAU 5x
Metacore integrated Unity LevelPlay into its monetization strategy, leading to a 5x boost in IAP and ARPDAU among non-paying users. Read the case study.
Each channel may offer different pricing models. For example, cost per install (CPI) or cost per engagement (CPE) is popular on in-app ad networks, while Apple Search Ads usually runs on a cost per tap (CPT) basis.
Of course, these are just a few types of performance marketing, and as the industry continues to evolve, we can expect to see even more advertising trends emerging.
How is performance marketing measured?
Performance marketing campaigns are usually priced and tracked using one of a handful of common models, each tied to a different desired action:
- Cost Per Click (CPC): Pay when someone clicks the ad.
- Cost Per Install (CPI): Pay when someone installs the app.
- Cost Per Engagement (CPE): Pay when someone takes a specific in-app action.
- Cost Per Action (CPA): Pay when someone completes a defined action, like a sign-up or purchase.
- Cost Per Mille (CPM): Pay per 1,000 impressions, more common in awareness-leaning campaigns.
Marketers also track return on advertising spend (ROAS) to see whether a campaign is actually profitable, not just active.To go deeper on how these campaigns work in practice, see Unity Learn's Deeper Dive into User Acquisition, or Implementing performance-driven paid user acquisition for a hands-on walkthrough.
What are the benefits of performance marketing?
- Pay for real results: Budget goes toward actions that actually happened, not just potential exposure.
- Easy to optimize in real time: Campaigns can be adjusted quickly based on live performance data.
- Lower financial risk: Spend is tied to outcomes, reducing wasted ad budget.
What are the challenges of performance marketing?
- Doesn’t build a brand on its own: A pure focus on immediate actions can leave long-term brand recognition underdeveloped.
- Needs scale to work well: Smaller campaigns may not generate enough data to optimize effectively.
- Attribution can get messy: Figuring out which touchpoint actually drove the result gets harder across multiple channels.
Frequently asked questions (FAQ)
Is performance marketing the same as affiliate marketing?
No. Affiliate marketing is one specific channel within performance marketing, where a third-party affiliate earns a commission for driving a result. Performance marketing is the broader category, which also includes paid search, social ads, and other channels, as long as payment is tied to a measurable action.
Does performance marketing replace brand marketing?
Not usually. Most companies use both: brand marketing builds long-term recognition and trust, while performance marketing drives the immediate, measurable actions that convert that awareness into results.