Following article written by me on the Voices section of AgencyFaqs:
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From the perspective of an advertiser’s objectives, there are two broad genres -- one is advertising for brand saliency and the second is advertising for generating business or acquiring customers. Performance marketing refers to the second genre of advertising. Marketing managers are increasingly allocating more monies towards advertising for performance and the internet is the only medium that is truly capable of specific measurement in terms of ‘cost of acquiring a customer’ or ‘cost of generating a transaction’.
Advertisers are using the internet as a direct response medium. A medium where they can actually specify their objectives in terms of cost per acquired customer. It is estimated that almost 70 per cent of the online advertising in India is happening for ‘performance’. Google alone enjoys close to 25 per cent share of the total online advertising in India. It is also estimated that 50-60 per cent of banner advertising is also happening for performance.
However, advertisers have still not exploited the true potential of Internet as a medium that can increasingly deliver ROI objectives of advertisers. It is very fashionable to talk about ROI, but the fact is that the offline agencies are still grappling with understanding the Internet and most of the online agencies are still using primitive tools and technologies..............
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You can read the full article here: http://www.agencyfaqs.com/perl/digital/voices/digispeak/index.html?id=12
