Performance campaigns can benefit all types of businesses

According to a 2011 survey from PricewaterhouseCoopers and the IAB, revenues for performance-based marketing models in online advertising are double those of traditional online cost-per-impression (CPM) models, MThink reports.

Performance-based business marketing capitalizes on direct interaction with consumers while providing organizations with the transparency, control, measurability, engagement, scale and tools necessary to optimize campaign performance and back-office processes, notes the news source.

Writing for MarketingProfs, Melissa Crossman of Integrate points out that performance marketing is different from traditional because companies are only required to pay for advertising that generates solid leads and sales rather than just interest.

The four primary types of performance marketing campaigns are cost per acquisition (CPA), cost per sale (CPS), cost per fan (CPF) and cost per click (CPC).

CPA refers to a technique where the marketer only receives payment for actions directly caused by the viewing of an advertisement, such as a sign-up for an email list, an agreement to attend a sales event or the actual purchase of a product.

CPS is entirely sale-based, as the name implies, and is most useful for companies that rely heavily on ecommerce for profits. It's also seen as a safe investment.

CPF involves social network marketing, and is especially useful for businesses with a strong brand following on sites such as Facebook or Twitter. It's intended to primarily generate Likes and followers from users that fit the company's target market.

CPC may be the most well-known method of the four, and can be defined by allowing companies to pay for ads that visitors click on when they visit a site. This is ideal for those just starting out or with a strict budget, because, for example, if you happen to pull in 1,000 clicks on a site with a CPC of 25 cents, it will cost you just $250.