The marketing world moves a mile a minute, and it can be hard to identify what trends will dominate the landscape. Just like when programmatic advertising took the marketing world by storm in 2017, performance video is a new trend that offers the personalization and return on investment marketers need to get ahead in a fast moving space.

Performance video specifically targets customer demographics with personalized messaging, allowing a business to show different potential customers programming that will directly appeal to them.

While video advertising has been a hallmark of marketing for years, brands are changing the way they use it.  Specifically, they are looking for video that is the proper length for social media embedding, while engaging the viewer with a specific call to action.

For a practical example, imagine how a coffee company might use performance ads to target specific groups. The company may target young professionals with a video showing a group of office workers clustered around the coffee maker. For social activists, the same company might focus their ad on the brand's fair-trade practices and humane worker treatment. 

As with every other area of marketing, performance video results are measured with data analysis and adjustment--advertisers can use data to adjust their video message with different calls to action to best appeal to an audience. Companies that produce performance videos start with an idea that they think will engage their audience, then measure what works about the ad and what doesn't work. If an ad has a good click-rate, but a poor conversion rate, marketers simply adjust to see if simple tweaks can make a difference.

Having established what performance video is, here's why it's transforming the marketing world and has applications in webpage advertising and social media touch points:

1. Performance video gets higher conversation rate.

Because performance video ads are tailored to specific customer personas, they get higher conversion rates than more generic visual advertising.

The clothing startup ThirdLove is a performance video success story. Before it invested in the tactic, the women's undergarment company relied on static image ads that had a stagnant conversion rate. After making the switch to video, ThirdLove saw its click-through rates rise by 27 percent, while its cost per acquisition decreased by 25 percent.

Performance video maximizes conversions by communicating directly to the customer. In a video, advertisers use a clear call to action that asks the viewer to learn more, shop now or reach out. While most advertising requires the viewer to remember the ad for future research, this video tactic gives a direct step viewers can take to engage with the brand.

2. Performance video reaches new audiences.

Many brand websites use consistent, general language that's meant to appeal to everyone who visits. By contrast, performance ads allow brands highlight specific, more niche product uses or services that will appeal to a narrow subset of customers. Not only can marketers do this with the content of the ad, but they can also play experiment with placing ads where their audiences are most likely to stop scrolling and view the video.

For example, to directly market their new pocket printer to millennials customers, the tech company HP produced a series of Facebook performance videos. By testing multiple types of videos, HP discovered that their six-second videos performed best with younger viewers, rather than 15-second videos. By focusing on those shorter videos, HP used performance video to drastically cut their cost per acquisition among millennials consumers.

3. Performance video works on new platforms.

Performance videos have been popular on Facebook for years, but the trend is catching on with newer platforms like Pinterest and TikTok as well.

Businesses can use Pinterest to target an audience of crafty users who are always looking for new projects, but they vary widely in age, artistic media and income level. Rather than trying to capture this varied audience with generic advertising, performance video allows brands to narrowly target those individual demographics.

For different reasons, performance videos are growing in popularity on TikTok. TikTok clips are 15 to 60 seconds long, a perfect fit with the quick video advertising. And because many videos on the site are intentionally low-quality, brands can keep production costs lower by minimizing editing, working with amateur actors and actresses, and creating an organic, do-it-yourself aesthetic.

Performance video may be new to the marketing world, but it is about to become one of the most important tools at your disposal. Personalization will only become more important in marketing, and brands need to create video that engages narrower audiences to stay ahead. Featuring more relevant content in an easy to package format, performance video is perfect for the modern marketplace.