Performance Marketing Channels Explained: Driving Results Without Wasting Budget

In today’s competitive marketing landscape, performance marketing channels have become essential for driving efficiency and impact. These channels, including search engine marketing, social media advertising, affiliate marketing, and programmatic display, focus on achieving measurable results while minimizing waste. 

Plenty of marketing strategies require companies to focus on long-term goals like brand building and customer engagement—areas where the traditional marketing funnel excels. But most of us can’t afford to wait for results. If you're in a hurry to drive revenue and need to see more immediate returns, you'll want to keep reading about full-funnel performance marketing and the channels used to drive measurable outcomes. 

Don’t be mistaken; marketing funnels and performance marketing funnels are related but have distinct benefits and drawbacks when steering consumers through the buying process.

Marketing Funnel Stages

The traditional marketing funnel are a framework for the stages a customer goes through when buying a product or service. Conventional marketing strategies address a customer's needs and friction points at each stage of the buying process, which typically include:

1. Awareness – where consumers first learn about your brand.
2. Interest – where potential customers express interest in your product/service.
3. Consideration – when they start comparing options and evaluating your offering.
4. Conversion – the final stage, where they make a purchase.
5. Retention – post-purchase engagement to build loyalty and repeat business.

This funnel focuses on branding, storytelling, and building relationships with the customer over time. Marketers design strategic content, social media, SEO, ads, and PR to guide customers closer to the purchase stage. The goal is not just conversion but also building long-term brand equity.

A fully built-out funnel for an edible brand might look like this: a curious customer sees an eye-catching post about the brand’s high-dose gummies on Instagram, clicks through to a blog explaining the differences between product formulations, signs up for a newsletter to receive a first-time buyer discount, makes a purchase, and later receives invitations to exclusive product drops, building a lasting relationship with the brand.

Performance Marketing Funnel Overview

Performance marketing funnels, while similar in structure, place a stronger emphasis on measurable outcomes and direct responses at each stage. Data and metrics drive optimization for actions such as:

1. Impressions – how many times ads are shown.
2. Clicks – how many people click on the ad.
3. Conversions – leads, sign-ups, or purchases.
4. CPA (Cost Per Acquisition) – measuring cost efficiency in acquiring a customer.
5. ROAS (Return on Ad Spend) – measuring revenue generated from ad spend.

Full-funnel performance marketing is transaction-focused and revolves around paid media channels like search ads, display ads, and social media advertising, with a heavy reliance on testing, optimization, and real-time data (found in the marketing attribution dashboard) to ensure efficiency and ROI.

A performance marketing journey for a THC beverage brand might look like this: a potential customer first notices the brand through display ads introducing flavors and benefits but doesn’t “click-through” until they start searching on Google for “low-dose THC drinks” and a targeted paid search ad appears. When they forget the drinks in their shopping cart, retargeted ads offer a limited-time discount, prompting them to make their first purchase. 

Differences Between Traditional and Performance Marketing Funnels

The marketing funnel encompasses the entire customer journey. It focuses on long-term brand growth, whereas the performance marketing funnel strategy focuses on immediate, measurable results, specifically optimizing paid advertising campaigns for short-term returns.

Benefits of Traditional Marketing Funnel Strategies

1. Brand Building: Fosters long-term brand equity and offers insights into customer behavior.
2. Increased Engagement: Guides customers through their journey, enhancing engagement and conversions.
3. Sustainable Growth: Builds customer loyalty for repeat business and effective resource allocation.

Drawbacks of Traditional Marketing Funnel Strategies

1. Time-Consuming: Building relationships and brand loyalty takes time, leading to slower results in driving conversions.
2. High Costs and No Guarantees: Brands pay upfront for ad placements based on estimated audience size (e.g., CPM), not the campaign results.
3. Limited Flexibility: Once established, the traditional funnel takes longer to adapt to real-time changes in consumer behavior or market trends.

Benefits of Performance Marketing Funnel Strategies

1. Measurable Results: Clear metrics are tied to specific user actions, allowing marketers to assess ROI accurately.
2. Cost Efficiency: Advertisers only pay for desired actions (like clicks or conversions), making it budget-friendly compared to traditional advertising methods.
3. Optimizable Campaigns: Continuous data analysis and A/B testing enable real-time adjustments to improve performance and maximize results.
4. Scalability: Campaigns can be scaled up or down based on performance, allowing for flexible marketing strategies that adapt to changing needs.

Drawbacks of Performance Marketing Funnel Strategies

1. Short-Term Focus: Prioritizes immediate results like clicks and conversions, neglecting long-term brand growth and customer loyalty.
2. Resource-Intensive: Requires constant data analysis and optimization, which is highly demanding in time and effort.
3. Audience Fatigue: Aggressive targeting can lead to over-saturation, weakening retention, and risking negative brand associations.

Key Characteristics of Full-Funnel Performance Marketing Strategy

1. Pay-for-Performance: Advertisers only pay when a desired action (e.g., click, purchase, sign-up) is completed. Standard pricing models include:some text
   • Cost-per-click (CPC): Advertisers pay for each click on their ad.
   • Cost-per-acquisition (CPA): Payment is made when a user completes a specific action, like making a purchase or filling out a form.
   • Cost-per-lead (CPL): Payment occurs when a lead (potential customer) is generated.
   • Cost-per-sale (CPS): Advertisers pay a percentage of the sale made through their ad.
     
2. Data-driven: Performance marketing funnels rely on tracking, data analysis, and optimization. Advertisers monitor campaigns in real-time, making adjustments based on performance metrics.some text
   • Click-Through Rate (CTR): Measures the percentage of ad views that result in a click.
   • Conversion Rate: Tracks the percentage of clicks that lead to a desired action, such as a purchase or sign-up.
   • Return on Ad Spend (ROAS): Calculates revenue earned for every dollar spent on advertising.
     
3. Optimizable: Campaigns can be continuously refined based on results. Advertisers use A/B testing, audience segmentation, and other methods to optimize for higher conversions and lower costs.some text
   • A/B Testing: Allows advertisers to test different versions of ads, landing pages, or offers by comparing their effectiveness.
   • Audience Segmentation: Advertisers break down audiences by demographic, behavioral, or psychographic factors to create tailored messaging.
   • Cost Optimization: Ads and bids are adjusted to reduce expenses while maintaining or increasing conversions.

Top Performance Marketing Channels

Performance marketing isn't effective on all channels because of variations in user behavior and platform dynamics. Brands need to select the performance marketing channels that align with their goals and audience for the best results. Here are the best marketing channels for performance-focused funnels:

• Search Ads (e.g., Google Ads): Ads displayed based on users' search queries, with payment based on clicks or conversions.
  
• Display Ads: aka banner ads, tailored to the bottom of the funnel to drive conversions with dynamic product ads or limited-time offers.
  
• Social Media Ads: Paid ads on platforms like Facebook, Instagram, and LinkedIn that can target specific demographics and behaviors.
  
• Affiliate Marketing involves partners promoting a brand's products, and the advertiser pays for sales or leads generated through affiliate links.
  
• Native ads are ads placed seamlessly within website or platform content, focusing on engagement and clicks. They use platforms like Outbrain, Taboola, and social media native placements to boost engagement and drive user actions.‍
• Shopping ads: appear on platforms like Google Shopping and Amazon Ads, featuring product-specific ads in search results or e-commerce sites, with payment based on clicks or conversions to directly drive product sales.‍
• Mobile and in-app advertising: delivers ads within mobile apps or games, targeting app installs, clicks, or in-app purchases to engage mobile-first audiences for specific actions.

Turn Clicks into Cash Right Away With Full-Funnel Performance Marketing Agency

Why play the waiting game? Performance marketing funnels are your key to immediate success in the cannabis race. Team up with MediaJel, a full-funnel marketing agency, to design, optimize, and scale your campaigns for maximum impact. Contact our strategists to discover your revenue potential! Schedule Your Demo!