No doubt, you have seen the terms “performance marketing” and “growth marketing” side by side in articles on marketing. By any means, all marketing is about growth and performance. When marketers think of growth, they automatically equate it with high performance in the realm of metrics, driving business growth.
So, is there a difference between “performance marketing” and “growth marketing”?
If you go on Google Trends, you will see almost the exact correlation over the last 5 years in the search demand for these terms.
If you search online, there aren’t many resources available to differentiate them, either. We can try here, though, to prove there similar, yet not the same.
What Is Performance Marketing
We look at performance marketing as being driven by return on ad spend and ROI. More clearly, this means if you put $1 into a marketing effort, you want to get $2 back.
To make this work, you have to keep repeating and optimizing the process through your marketing channels. Part of this includes refining your PPC campaigns and finding ways to hit the sweet spot on how much to spend to get the results you want.
Your goal in performance marketing is to engineer the optimum return on ad spend. You do it through search – both organic (SEO) and paid (PPC), conversion rate optimization, and A/B testing, all driven by data and analytics.
What Is Growth Marketing
We look at growth marketing as encompassing performance marketing but being more holistic across the entire marketing funnel. That would also include organic growth – SEO optimization and content marketing, which is the long-term strategy. It would involve your upper funnel marketing as well – paid advertising with video ads, Facebook ads, Instagram, and LinkedIn.
With growth marketing, the end goal is to scale your business fast. You start with the lowest hanging fruit, of course, and target people who are already looking for you, in-market. But you also look for ways to expand your market up the funnel by engaging new audiences, educating, and nurturing them along the user journey.
Finding the right growth hacks for your marketing campaigns is equally important as keeping the customer acquisition cost (CAC) stable. Establishing the right unit economics at an early stage can even help you define your pricing strategy.
In some cases, you can even risk your profitability and ROAS to get more leads faster and allow your business to scale. Suppose you’re gearing up for Series A funding, for example. In that case, you may even decide to stomach negative ROI for the short term, if that will keep you on the trajectory of winning the market and chasing out competitors.
Performance and Growth Marketing and the Marketing Funnel
In a nutshell, performance marketing functions best at the bottom of the marketing funnel, while growth marketing incorporates performance but covers all funnel stages to accelerate business growth.
With this frame of reference, you can decide for yourself which one fits your needs better. This might help you define how you see marketing success and what goals to set for your team.
Next, consider assessing digital marketing agencies based on these 3 major criteria: demand capture, lead generation, and brand building.