When companies find their marketing efforts rewarded, they must consider ways of scaling or amplifying their effectiveness. Sadly, only a few firms have gotten to this point. In the US, the business failure rate in their first year is 18.4%.
Inaccurate consumer targeting and other issues can cripple marketing campaigns. Others need help looking at the right metrics. Enter growth and performance marketing—two concepts pushing the boundaries of traditional marketing goals.
This article offers an in-depth view of the key differences between performance and growth marketing, which you can use to select the best marketing strategy for your business or startup.
Growth and performance marketing offer different strengths and pose various risks. In fact, marketing agencies emphasize how these two cover distinct sections in the marketing funnel.
Other comparative reviews delve into the stages of business growth (e.g., early-stage, maturity) when discussing growth marketing vs. performance marketing. For a more comprehensive assessment, these marketing concepts are pitted against each other through their strategies, outcomes, and flow or process.
Before getting into the nitty-gritty of marketing showdowns, consider dissecting their respective definitions.
Performance and growth marketing consists of tactics that empower businesses to improve and expand their market share.
Performance marketing includes affiliate marketing, pay-per-click, and search engine marketing.
Growth marketing includes content marketing, email marketing, and search engine optimization (SEO).
A common rookie mistake people commit is to launch a marketing campaign without thoroughly reviewing their target audience, goals, and expected ROI. To avoid this route, growth and performance marketers must consider the elements in their strategy that can directly or indirectly impact their cost or budget.
So for performance marketing, marketers will look at campaigns that directly influence revenue. On the other hand, growth marketing focuses not only on programs but channels to test and further improve all these in a way that optimizes the marketing budget. In other words, a performance marketer sees growth in new customers, while the growth marketer expands this goal to include current customers.
Did you know? Return on investment (ROI) helps select a brand's marketing channels and prove the value of the proposed marketing strategy.
As mentioned, growth marketing ensures that companies attract new customers and retain loyal patrons wherever they are in the marketing funnel (from awareness to customer retention or referrals). Hence, its process is cyclic compared to the performance marketing process.
Growth marketing starts when it analyzes market data, ideates based on analysis, and prioritizes and tests the marketing campaign. Then it goes back to research with the primary objective of learning what consumers want. Marketers use different marketing tools to do this effectively, such as the social listening tool Archive.
Growth marketers can benchmark and identify their campaign's weaknesses in the testing process. Growth marketers use such insights to improve their relationships with consumers, generate content for content marketing strategies, and expand their consumer base.
Performance growth marketing can be similar, but the process is charged with speed. Marketers define their goals, select marketing channels, and create a campaign message. Performance marketers execute the campaign to analyze and optimize their strategy until the goal is achieved and the desired metrics are met.
Because of this straightforward approach, business owners and marketers looking for fast gains in a short period always go for performance marketing. Of course, growth marketers will see progress, but they have to expect these favorable metrics to show up after a long time. In short, it's a slow but steady pace for growth marketing.
When it comes to strategies, comparing performance and growth marketing is like looking at apples to oranges. Both can boost businesses with marketing capabilities that can expand brand awareness and increase leads and sales.
But because they are designed for different marketing goals, they need to meet the same targets. Does that mean they should be treated on the same level? No sane marketer will ever say yes. However, combining both strategies is an excellent way to make the most of a company's marketing resources.
In other words, a marketer will run short-term performance marketing strategies using their knowledge of the tactics, processes, and metrics. And as they reap the rewards, they can simultaneously work on the slow but sure pacing of growth marketing. They can invest in more e-commerce platforms and consumer-focus tools, like Archive.com.
By running simultaneous short- and long-term campaigns, companies solve the perennial problems that stump early marketers:
Besides parallel campaigns, marketers and business owners can use their business stage and budget as factors. If the company is new to the market, it might need more time (and resources) to prepare to perform a holistic approach like growth marketing. For a lean budget, performance marketing strategies might make more sense.
Comparing the strategies, outcomes, and processes of performance and growth marketing can sometimes cause marketers to assign one method as inferior to the other. But by combining or running parallel growth and performance marketing campaigns, marketers can reap more than just a few metrics or leads.
Want to leverage the best marketing strategy for your business? Visit Archive.com and learn how our marketing app can boost your chosen strategy.
Yes, pay-per-click ads like Google ads fall under performance marketing, besides impressions or views on a CPM (cost per thousand).
To spot a growth market, companies must conduct one or a combination of these assessments: consumer segmentation, product/service, competitor, diversification, and purchase situation analyses.
No, the two aren’t the same at all. Direct media buying involves two parties agreeing on a flat fee or sponsorship. Performance marketing is based on customer or visitor clicks (e.g., cost per click or pay per click).