A performance marketing agency is an agency that manages and optimizes digital marketing campaigns across various channels to achieve performance goals, like increased conversions and maximized return on investment (ROI).

People may confuse performance marketing with paid media marketing, like pay-per-click (PPC). While the latter focuses on creating brand awareness and generating traffic, performance marketing services concentrate on generating measurable results and a positive ROI. PPC and other paid advertising efforts, and even SEO, are considered part of performance marketing.

Some companies may also believe that handling performance marketing in-house will save them money, but it's more complex than merely launching ads across different platforms. For example, about 35.7% of global online users use ad blockers, which can significantly reduce the effectiveness of online advertising efforts. This statistic highlights just one of the many challenges that performance marketing companies are equipped to handle expertly:

• Inadequate expertise across various aspects of performance marketing
• Insufficient grasp of digital marketing strategies and industry best practices
• Difficulty with ad bidding and related strategies, leading to inefficient ad spend
• Lack of manpower and low budget for necessary tools and technologies
• Limited access to advanced marketing and analytics tools that hinder campaign performance
• Struggling to scale campaigns quickly in response to market changes or business needs
• Inexperience in analyzing complex data sets to effectively optimize campaigns
• Inability to measure results and track ROI across various digital marketing campaigns
• Difficulty keeping up with fast-evolving trends, making it hard to remain competitive
• Lack of access to valuable industry networks and partnerships that could enhance marketing efforts

Statista estimates that global digital advertising spending will reach $646 billion in 2024 and skyrocket to a whopping $870.85 billion by 2027. What this means is the battle to win customers will be even tougher, especially for small businesses with limited resources.

Success story

You may have a marketing target, but knowing the right strategy and metrics to use can be a complex thing. We chose the following case study to demonstrate how a performance marketing company’s expertise successfully guided a business toward achieving its year-on-year (YoY) revenue goals:

• Challenge: AHLA Insurance heavily relied on year-over-year performance data to track growth in policy purchases, revenue, customer acquisition cost (CAC), and return on ad spend (ROAS). However, in 2023, it encountered revenue and profitability challenges, including rising cost per click (CPC) on Google Ads and inconsistent tracking on Microsoft Ads.
• Solution: To address AHLA's revenue goals, Black Propeller implemented a focused paid search strategy on Google and Microsoft Ads, prioritizing core insurance products, such as vacant land insurance policy. The performance marketing agency also leveraged Google Ad’s Performance Max to expand reach and revenue and launched a YouTube video remarketing campaign targeting site visitors who hadn't completed a purchase.
• Results: The strategy resulted in a remarkable 151% increase in policy purchases for core insurance products through paid search, while vacant land policy purchases rose by 74%. AHLA's total YoY revenue from paid search got a significant boost of 136%.

Performance marketing agencies help businesses optimize their online marketing efforts to achieve desired results, such as clicks, leads, traffic, and sales. They often use pay-per-click (PPC), affiliate marketing, and social media ads, to effectively reach and engage the target audiences and turn them into qualified leads or loyal customers.

Here are the performance marketing services typically offered by performance advertising agencies:

• Pay-per-click (PPC) advertising
  Managing and optimizing campaigns on platforms like Google Ads and Bing Ads to drive targeted traffic
• Search engine optimization (SEO)
  Improving website visibility in organic search results through on-page and off-page optimization techniques
• Social media advertising
  Creating and managing ad campaigns on platforms like Facebook, Instagram, and LinkedIn to reach specific demographics
• Affiliate marketing
  Partnering with other businesses or content creators to promote the brand’s products or services, while offering commissions on generated sales
• Email marketing
  Creating and implementing email campaigns that engage customers, nurture leads, and drive conversions
• Content marketing
  Creating high-quality content like blog posts, articles, and videos to attract and engage target audiences
• Video marketing
  Creating and promoting video content to enhance brand awareness and engagement across various platforms
• Conversion rate optimization (CRO)
  Analyzing the performance of websites and landing pages to identify areas for improvement and increase conversions, such as sign-ups or purchases
• Programmatic advertising
  Using automated technology to buy and sell digital advertising space in real-time auctions, allowing advertisers to target specific audiences more efficiently
• Retargeting/remarketing
  Implementing strategies to re-engage users who have previously interacted with the brand but did not convert
• Data analytics and reporting
  Tracking and analyzing campaign performance metrics to measure its effectiveness and identify optimization opportunities

Success story

Even established brands sometimes experience a slump in their marketing efforts and turn to performance marketing agencies for a successful turnaround. We chose this case study as an example:

• Challenge: National Public Radio (NPR), a prominent media brand, relies on corporate sponsorships to sustain its operations. Its subsidiary, National Public Media (NPM), aimed to improve its sponsorship acquisition efforts by lowering the cost per acquisition (CPA) and driving more conversions through its website's landing page.
• Solution: KlientBoost, a performance marketing company, developed a comprehensive marketing plan to attain its objectives within a three-month timeframe. The plan included a variety of tactics like single keyword ad groups strategy, smart ad bidding, attribution research and modification, and breadcrumb technique.
• Results: Within just two weeks, the campaign delivered impressive results:
  • 1,485% increase in conversion volume
  • 94% boost in conversion rate
  • 21% decrease in cost per click (CPC)
  • 38% increase in clickthrough rate (CTR)

The costs for performance marketing services vary depending on the strategies used (e.g., PPC, SEO, email marketing) and the campaign objectives (e.g., ROAS, CAC, traffic, conversions). Therefore, there are no standard rates for a performance marketing package, as agencies customize their pricing based on specific business needs and goals.

However, since performance marketing falls under the umbrella of digital marketing, agencies generally charge between $2,000 and $20,000 or more per month. Below is a breakdown of typical costs for the most commonly used performance marketing services:

• PPC advertising: up to $10,000 per month
• Email marketing: $500-$5,000 per month
• SEO: $1,500-$5,000 per month
• Affiliate marketing: 5-30% of affiliate revenue

You should hire a performance marketing agency because it offers expertise to fine-tune and maximize your marketing campaigns and deliver successful results. For example, it can easily identify the most effective channels to run your ads based on where your customers are searching — whether it’s Google, Facebook, or LinkedIn.

Performance marketers can also do continuous testing and make data-driven adjustments to campaigns to achieve or even exceed your business goals.

Many businesses partner with performance marketing companies because they:

• Have specialized knowledge and experience in various digital marketing strategies, channels, and tactics
• Have proven processes and experienced teams that can bring faster results
• Use analytics and data to track campaign performance, identify trends, and make data-driven decisions
• Have access to advanced marketing tools and technologies that enhance campaign effectiveness
• Can maximize advertising budget to achieve a better return on investment (ROI)
• Use advanced audience segmentation techniques to reach a wider audience and specific customer groups
• Can quickly scale marketing efforts based on performance and changing business needs
• Stay updated on the latest trends and changes in digital marketing
• Provide detailed reports on campaign performance for better decision-making

Success story

We chose this case study to show the challenges of in-house performance marketing, and how a skilled agency rescued a struggling campaign and recovered wasted ad spend:

• Challenge: An eCommerce company was draining its ad budgets on inefficient Amazon campaigns. To turn the tide, it hired a performance marketing agency to lower its advertising cost of sale (ACoS) and boost campaign performance.
• Solution: JumpFly launched Sponsored Products and Sponsored Brands campaigns on Amazon and implemented both automated and manual targeting strategies. To beat the high ACoS, the performance marketing company analyzed search term reports to identify and eliminate underperforming keywords and reduce wasteful spending.
• Results: By structuring the campaigns better and implementing Amazon best practices like negative keywords tactics, the client reduced its overall ACoS by over 26% within the first two months while also cutting monthly ad spend by nearly 54%. There was also a remarkable 32% lower ACoS across all JumpFly-built campaigns.

Choose the best performance marketing company for your business by following these steps:

1. Have clear business goals
   Define your specific marketing objectives — do you want to increase sales, get more signups, or improve brand awareness? It's important to find an agency that understands your goals and will align its strategies accordingly.
2. Search the right platforms
   Search for potential performance-based marketing agencies on credible directories like DesignRush, verified review platforms, and major search engines, such as Google and Bing.
3. Check for experience and expertise
   Look for agencies with proven experience in performance marketing services, especially within your industry. Then review their team profiles to see if they have the relevant expertise and specialized skills.
4. Check their services
   Make sure the performance advertising agency offers a range of services, including PPC, social media advertising, SEO, and analytics, to meet all your performance marketing needs.
5. Assess portfolios and case studies
   Review the performance marketing agency’s past projects with companies in your industry but focus on success stories that clearly demonstrate its results.
6. Look for client reviews
   Research verified client reviews and testimonials to get insights into the agency's reputation, customer service, and overall satisfaction from other businesses.
7. Ask for proposals
   Create a list of potential performance marketing agencies you want to work with and then send out detailed requests for proposal (RFP) to further shortlist your candidates.
8. Set up a call
   Set up an interview with the agencies so you can get to know them better and discuss your project.
9. Ask about their process
   Ask about their approach to campaign development, execution, and optimization. Look for an organized, systematic approach in their responses.
10. Discuss KPIs and reporting
    Ask how performance based marketing agencies will report on campaign performance and key metrics, as transparency will keep you informed about your investment.
11. Inquire about tools and technology
    Inquire about the tools and technologies the performance marketing company uses for campaign management, tracking, and reporting because the right tools are important in maintaining campaign effectiveness.
12. Discuss budget and costs
    While considering the pricing, also explore performance based marketing agencies. It’s a compensation model that can ensure they’re motivated to deliver exceptional results that directly impact your bottom line.
13. Consider their cultural fit
    Assess whether the agency’s values, communication style, and work ethic align with your company culture. A good partnership thrives on mutual understanding and collaboration.

Do you still need help finding the right performance marketing agency? Visit our Marketplace and give us some details about your business, we'll provide you with a list of five top-rated agencies that match your requirements — for free.

Narrow down your search for the best performance marketing companies using DesignRush's filters. You can search by budget, ranging from $1,000 to $50,000, and other specific criteria.

You can also browse through our agency directory to explore more agency profiles by location, niche industries, area of expertise, team size, pricing, and hourly rates to comprehensively compare performance marketing companies and find the best one for your brand. 

Here are the key success metrics to track the effectiveness of performance marketing campaigns:

1. Impressions
   The total number of times an ad or piece of content is displayed to users, regardless of whether they interact with it or not
2. Clicks
   The total number of times users click on an ad, link, or call-to-action (CTA) within a campaign
3. Click-through rate (CTR)
   The percentage of users who click on an ad or link against impressions, which measures engagement and relevance
4. Cost per click (CPC)
   The cost the advertiser paid when someone clicks on an ad
5. Cost per lead (CPL)
   The average cost of acquiring a new lead, indicating the cost-effectiveness of a marketing campaign
6. Cost per acquisition (CPA)
   The average cost of acquiring a new customer, including all associated costs like marketing and sales expenses
7. Customer lifetime value (CLTV)
   The possible revenue a customer can generate for a business throughout their relationship with a brand
8. Marketing qualified leads (MQL)
   Total number of potential customers who have shown interest in a company's products or services based on marketing efforts
9. Conversion rate
   The percentage of users who complete a desired action, such as making a purchase or signing up, after clicking an ad
10. Churn rate
    The percentage of users or customers who stop doing business with a company over a specific period, also known as attrition rate
11. Traffic by source
    Tracks the number of website visitors from different sources, e.g., organic, paid search, referral, and social media
12. Engagement rate
    Measures user interaction with content, including likes, shares, and comments on social media ads
13. Attribution model metrics
    Tracks which channels or touchpoints contributed to a conversion, e.g., first-click, last-click, or multi-touch attribution, providing insights into the customer journey
14. Return on ad spend (ROAS)
    The amount of revenue generated for every dollar spent on advertising
15. Return on investment (ROI)
    The profitability of a campaign by comparing the net profit against the costs incurred

Protect your business from costly mistakes and mediocre results by keeping an eye out for these red flags when hiring a performance marketing agency:

• Overpromise success
  Avoid performance marketing agencies that guarantee immediate results as they often overlook the time it takes to achieve sustainable growth; this can lead to unrealistic expectations.
• Lack clearly integrated strategies
  Avoid single-service agencies or those that focus on only one aspect of advertising or marketing, as they often lack a fully integrated strategy. For example, Google Ads should run simultaneously with social media ads to achieve your conversion goals.
• No clear metrics
  Don't work with a performance marketing company that doesn’t clearly articulate the key performance indicators (KPIs) or ROI, it may not be serious about delivering measurable, data-driven results.
• Poor communication skills
  Don’t consider an agency if it shows poor communication during your initial call. If it’s slow to respond or doesn’t address questions thoroughly, it could signal future communication issues and lack of support.
• Relying on complex system for communication
  Be wary of companies that rely on platforms like Slack or ticketing systems for communication. It shows inflexibility that can hinder timely responses and efficient problem-solving.
• Overuse of jargons
  Skip performance marketing companies that excessively use terminologies or buzzwords without clear explanations because it indicates they’re trying to confuse or impress you, rather than genuinely inform.
• Lack of data-driven strategies
  Watch out for vanity metrics, like follower count, because they don’t contribute to your ROI. A good performance marketing agency should focus on data-driven strategies and provide reports that directly reflect your business goals and impact.
• Doesn’t provide ad creatives
  Beware of performance advertising agencies that only run ads but don't provide the copy or creatives. Effective advertising relies on strong creative elements, and the performance marketing agency should have full control over these aspects to ensure proper testing and optimization.
• Poor reviews
  Be cautious of performance marketing agencies with low ratings or negative reviews. Check verified review platforms like DesignRush or Trustpilot to read authentic client feedback and testimonials.

These are the questions to ask when hiring a performance marketing agency:

Its Relevant Background

1. How many years of experience do you have in performance marketing?
2. What industries or niches have you previously worked with?
3. Can you provide case studies or examples of past success stories for businesses similar to ours?
4. Do you have in-house experts for different marketing channels, or do you outsource some services?
5. What certifications or partnerships do your team members have?
6. What is your team structure and who will be our main point of contact?
7. Can you provide a detailed breakdown of the costs involved in your services?

Its Services and Processes

1. What specific performance marketing services do you offer (e.g., PPC, email marketing, social media advertising)?
2. What tools and technologies do you use for campaign management and analytics?
3. Can you explain your process for audience segmentation and targeting?
4. How do you handle A/B testing and optimization?
5. How do you stay updated with the latest industry trends and technologies?
6. What kind of analytics tools do you use to track campaign performance?
7. What kind of reporting can we expect throughout the project?
8. How do you ensure transparency and communication during the campaign?
9. How do you handle client feedback and suggestions?
10. What is your typical timeline for seeing results from a new campaign?

Relevant to Your Project

1. How would you identify and target my ideal customer?
2. How will you integrate our existing marketing efforts with your strategies?
3. How do you allocate my marketing budget across different channels to maximize ROI?
4. How do you ensure that the KPIs align with my overall business objectives?
5. How do you optimize my campaigns to improve performance and reduce costs?
6. How do you plan to handle changes in market conditions or trends during the campaign?
7. What steps do you take to ensure compliance with my industry's regulations and data privacy?

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