What’s the difference between growth and performance? You may see these terms associated with marketing, and they may seem like the same thing. However, we promise you, they’re not! Growth and performance marketing have different yet related functions when it comes to your campaign. If you want to learn more about them, keep reading.
By the end of the article, you should have a full understanding of growth and performance marketing. More importantly, you’ll be able to confidently decide when it’s best to focus on one or the other and be prepared to tackle and overcome challenges along the way.
Growth Marketing vs. Performance Marketing: Understanding the Former
Growth marketing is a full-funnel approach that focuses on (you guessed it!) growth. While performance marketing is concerned mostly with conversion, growth marketing goes way beyond that. For your efforts here, you’re invited to take a step back and see your brand’s bigger picture — beyond immediate sales.
While both growth marketing and performance marketing aim to attain measurable success, only the former typically looks into after-sales considerations like retention and referrals. For more details, check out the discussion below.
Core Principles and Objectives
Growth marketing takes a much broader approach that includes:
- Keeping your existing customers engaged and loyal to the brand;
- Continuously testing and refining your strategies;
- Crafting content that brings value to all segments of the audience;
- Making advocates out of customers by encouraging referrals.
With growth marketing, the job doesn’t stop at conversion. Since the focus is long-term growth, you’re continuously trying to get more value out of existing assets (hint: customers).
Key Metrics and KPIs
The most common metrics associated with growth marketing are the following:
- Customer lifetime value (LTV), which is a number that tells you the total revenue generated from the customer;
- Churn rate, which is the percentage of customers who didn’t repurchase or stopped using a product or service;
- Retention rate, which is the percentage of customers who continue using your services or buying your products;
- Net Promoter Score (NPS), which measures customer satisfaction and their likelihood to recommend the company;
- Customer acquisition cost (CAC), which tells you how much you have to spend to get a customer;
- Conversion rate, which is the percentage of users who completed the desired action, like a signup or a purchase.
Some of these metrics can be used for both growth and performance marketing. However, for the latter, the implications will not have as broad of a scope because you’ll only be focused on conversions.
Real-World Examples of Growth Marketing in Action
Growth marketing can lead to more sustainable results. Examples include:
- Airbnb’s user-generated content: Airbnb encourages users to share their own pictures and reviews, which improves the company’s trustworthiness.
- Spotify’s personalized playlists: The playlists are created based on your listening history, creating a truly personalized experience. This helps reduce the churn rate because music that fits your taste is always within reach.
As you can see, it’s not just about converting; it’s about retaining interest in the company and its offers.
Growth Marketing vs. Performance Marketing: Understanding the Latter
Usually, performance marketing is a short-term, conversion-focused subset; however, it may be used within a broader growth marketing strategy. If this is the case, you are probably wondering why we’re still comparing growth marketing and performance marketing. Oftentimes, the two terms are used interchangeably, and we think it’s time that we set the record straight!
Performance marketing is designed to generate short-term outcomes. Growth and performance marketing have things in common, but we hope the following distinctions will help clarify their differences.
Core Principles and Objectives
When comparing growth marketing and performance marketing, the latter focuses more on immediate, measurable actions like clicks, leads and sales. With performance marketing, you’re looking for immediate returns on your ad spending. Specifically, you want to get the most (clicks, sales or whatever measurable outcome you’re looking for) from your budget.
Of course, both growth marketing and performance marketing are concerned with improving the yield from the resources used. But here, the supposed yield should be immediately measurable and should easily be associated with your efforts.
Key Metrics and KPIs
Below are the most common metrics used to evaluate success in performance marketing:
- Clickthrough rate, which is the percentage of users who clicked on the ad after seeing it;
- Cost per click, which tells you how much you’re spending per click;
- Conversion Rate and Customer Acquisition Cost are also relevant to performance marketing.
As we discussed earlier, some metrics can be used for both growth and performance marketing. For example, CAC matters for both immediate conversions and long-term growth.
Real-World Examples of Performance Marketing in Action
We’re proud to contribute to the success of many brands in growth and performance marketing. However, here are our favorite case studies that highlight our success in the latter.
- Betnacional: We created rich media ads to generate leads for Betnacional and were able to achieve a CTR of 0.50%.
- FCA: We offered a limited-time bonus to those who visited the FCA dealership, from which we were able to reach an average CPC of $0.14.
- HSBC: To attain leads for HSBC’s credit cards, we linked the desire to create a comfortable future with the offer. Based on our efforts, we achieved a $0.06 CPC and a 1.5% conversion rate.
Elements of both growth and performance marketing are present here. Visit our case studies page to learn how we can generate immediate outcomes for you.
What is Growth Marketing vs. Performance Marketing? An Assessment of the Key Differences
Now that we’ve discussed the two individually, you’ve probably noticed many similarities. For one, they both look at measurable characteristics. However, they also differ in multiple aspects. To better define both growth and performance marketing, let us focus on where they’re different.
Scope
Growth marketing and performance marketing are naturally integrated because both contribute to similar goals associated with a company’s success. While the latter’s efforts stop the moment a user becomes a customer, the former covers a wider scope that takes into account customer retention and referral.
Growth marketing is concerned not only with getting customers but also about making the most out of the ones you already have and optimizing the entire customer lifecycle.
Common Approach
Another stark difference between growth marketing and performance marketing is their approach to achieving results. From what we’ve observed, here are the biggest distinctions.
- Growth marketing drives long-term customer relationships by combining organic and paid strategies, such as posting on social media, maintaining an email list or improving on-page SEO.
- Performance marketing targets specific audiences with measurable outcomes to generate immediate conversions (you’re basically paying for ads to get views and, ideally, action right away).
While both strategies contribute to revenue, performance marketing is directly tied to sales conversions, whereas growth marketing nurtures long-term value and customer loyalty.
Metrics Used
The metrics used can be different, which is expected as we’ve already established their scope. Both growth and performance marketing use a lot of quantitative measurements. However, the metrics you use for growth marketing prioritize long-term data. You want to see the entire lifecycle, from their initial engagement through to purchases and referrals.
Meanwhile, performance marketing is generally specific to a campaign. The metrics won’t necessarily track long-term customer engagement.
Integration Strategies: Making Growth Marketing and Performance Marketing Work Together
Although growth and performance marketing work on different timelines, there are still benefits to integrating them as part of a single comprehensive strategy. Think of it this way: consistently great performance leads to growth. By integrating the two, you can guarantee that every effort contributes to your goals. Therefore, you’re effectively limiting the wastage of your ad budget. So, how can you integrate growth and performance marketing into your campaign strategy?
Make Decisions Based on Data
If you’re using data to inform the direction of your strategy, you’re probably already integrating growth and performance marketing. Here’s how:
- Growth marketing looks at long-term data to determine where the focus of performance marketing should be.
- Launching performance marketing campaigns then creates more data.
- The resulting data for growth marketing explores any insight and considers both past and current performance.
This is an endless loop between growth and performance marketing. Here, both types of campaigns can improve continuously based on incoming data.
Take Advantage of Automation Technologies
Focusing solely on growth marketing or performance marketing can be difficult, given how fast-paced the online world is. To improve your integration efforts, why not create an automated workflow that’s focused on growth? You can use automation tools to streamline audience segmentation and personal messaging.
Once you’ve brought the audience to the awareness stage, you can then utilize your performance marketing campaign. Since they’re already familiar with the brand, you can more easily get them from the top to the middle of the funnel.
Use Cross-Platform Strategies
Your overarching efforts for growth and performance marketing should be consistent across platforms. If you can guarantee that, here are some cross-platform strategies that you may want to consider.
- Creating an ad and landing page to offer users a free sample: This gets them closer to a sale while also creating a stronger brand impression.
- Developing evergreen posts that introduce products/services as solutions: By integrating growth and performance marketing this way, you’ll improve brand authority while also potentially driving users to try or buy.
- Retargeting existing customers: If you have a new offer, you can increase the customer lifetime value by retargeting customers so they buy again.
Tools and Techniques for Measuring Success for Performance Marketing vs. Growth Marketing
As an advertiser in the digital world, you know that it will take more than just your expertise to be successful in creating, managing and improving campaigns. For both growth marketing and performance marketing, you’re going to need tools.
Marketing tools help avoid repetitive tasks, allow you to process the incoming data more quickly and give you time to focus on work that will bring better returns. So, let’s discuss the most useful measurement tools for growth and performance marketing. To maximize the potential of these tools, let’s also explore proven techniques for measuring both.
Tools for Growth and Performance Marketing
Which platforms are you using for your marketing efforts? That alone will narrow down the measurement tools that you can use. From what we have seen, these are the most useful tools for growth and performance marketing:
- Google Analytics: For tracking user activity on the website such as page views, user page views and conversions;
- Hotjar: For recording heatmaps and user sessions to get a better sense of their experience;
- Ahrefs: For tracking keyword rankings and organic traffic (mostly applicable to growth marketing);
- Social platform tracking tools: Like Meta Business Suite and TikTok Creator Analytics.
These all play a role in both growth marketing and performance marketing. Just select the platforms that have the most value for your purposes.
Techniques for Measuring Success for Growth and Performance Marketing
Since you’re looking at vastly different timelines, it may not be a good idea to use the same measuring techniques for your growth and performance marketing efforts. So, let’s talk about measures that are applicable to growth marketing and performance marketing separately. We’ll also explain them to give you a better sense of how to incorporate them into your campaigns. However, just use them as your starting point for your analyses. There are many ways to measure your growth and performance marketing efforts.
Growth Marketing
With growth marketing, you want to prioritize the macro perspective. Here are a few measurement techniques that you may find useful.
- Funnel analysis: See where the users are falling off the funnel so that you know where to optimize.
- Retention curve analysis: Determine if converted customers remain engaged or churn off quickly.
- Cohort analysis: Follow various audience segments based on their interactions, behavior and other relevant information over time.
In terms of growth marketing, all these tools will help you identify any problems or weak points that you can optimize.
Performance Marketing
Since you’re looking at the short-term, the measurements you take for your performance marketing efforts should work on your data quickly.
- Return on Ad Spend (ROAS): Compare the financial returns against ad spend for a campaign or platform.
- Conversion rate: This is the percentage of visitors who performed a certain action.
- Engagement rate: This is the percentage of users who engaged (in the form of likes, comments, etc.) over those who saw the ad.
Between growth and performance marketing, the metrics here tend to require you to perform further processing; however, you can view them as they are without any further analysis.
Growth Marketing vs. Performance Marketing: Challenges and Considerations
Both marketing strategies offer a powerful way for you to generate short- and long-term positive outcomes for the brand and the business. However, they still come with a few challenges. Before you engage in your growth marketing or performance marketing efforts, you should be aware of the potential setbacks. By doing so, you’ll be able to make smarter decisions for your campaign. And don’t worry! In the next section, we’ll share how you can navigate through and address these challenges in your growth marketing and performance marketing strategies.
High Investment Required for Promotions
Let’s admit it: it’s just getting too expensive to advertise! The competition is growing across all industries, which means more people bidding for the same ad space. So, what does that mean for your growth and performance marketing campaign?
- You may have to spend more to achieve your desired results.
- The financial returns won’t be as high since they’re eaten up by the ad budget.
- You may need to cut the campaign short if you’re on a limited budget (that usually has a stronger impact on performance marketing).
The issues with growth and performance marketing can be especially prevalent on high-demand platforms such as Meta and Google.
Diminishing Returns on Your Efforts
However, even if you have all the money in the world, it doesn’t mean that everything’s going to be great for your growth and performance marketing campaigns. You may face diminishing returns on your investment in the forms of:
- Ad fatigue: Your audience gets tired of seeing the same content over and over again;
- Audience saturation: You’ve reached everyone possible;
- Decreasing engagement rates: Even without changing anything, you may see your growth marketing and performance marketing engagement rates drop.
All these factors come down to the law of diminishing marginal returns. Essentially, it means that for every additional input that you have, you’ll get less back. However, this happens when you overuse the same strategy without optimization. You can prevent it by utilizing A/B testing, refreshing your creative design and developing new targeting strategies.
Dependence on Specific Media
Growth and performance marketing efforts tend to be associated with the biggest platforms on the market. However, if you rely on them solely to reach your audience, then you may end up facing these issues with your growth and performance marketing campaigns:
- Having your reach affected due to algorithm changes;
- Needing to keep up with the changing regulations for the platform you’re using;
- Having the success or failure of your growth marketing and performance marketing efforts decided largely by one service.
Think about your company’s main sources of leads and sales. Imagine that those disappear tomorrow. How affected would your growth marketing and performance marketing campaigns be? If you’d essentially have to start from scratch, then take this as a sign to adopt a multi-channel approach for both growth and performance marketing to reduce platform dependence.
Data Handling Regulations and Restrictions
The internet may not be a physical place, but your growth and performance marketing campaigns there are still governed by the laws of different countries. And as we’ve seen, more and more people are becoming more aware of the privacy implications of third-party data collection.
If you rely on third-party cookies for your growth and performance marketing efforts, then stricter regulations may prevent you from running your campaign effectively. The European Union has the GDPR, which sets strict guidelines on how you can collect information from EU citizens. And it’s not just laws that can affect growth marketing and performance marketing. Even Apple’s Safari browser has completely blocked third-party cookies. The key alternative here is first-party data collection (email lists, CRM-based targeting, direct customer interactions, etc.).
Transparency Issues
Now, we’re not saying that you’ll be completely in the dark when you run growth and performance marketing campaigns. However, the things you see in your analytics dashboard, such as CTR and CPC, are just the outcomes. Have you ever wondered what happens in between?
For your growth marketing and performance marketing campaign, you won’t be aware of every site where your ad is posted. You won’t always know the full context of where your ad appears or how users engage with it before clicking. Without this qualitative data for growth marketing and performance marketing, you may not be able to make the best decisions for your campaign. You can utilize different solutions to improve transparency in ad tracking. Some examples are attribution modeling, post-click analysis and AI-driven analytics tools.
Top Tips for Generating Both Short-Term and Long-Term Successes with Performance and Growth Marketing
If you ask us, challenges are just part of the game! As you’ve seen in the previous section, there are some things that you need to watch out for, as they can impact the effectiveness of growth and performance marketing. However, that doesn’t mean that you just have to eat the losses from those considerations. With these tips, you can address the most common issues and get the best yields from your efforts.
Focus on Low-Investment Strategies as Well
Both growth marketing and performance marketing will most likely require some form of financial investment. However, between the two, the former is generally cheaper. While it involves paid elements, it focuses more on organic and cost-efficient strategies.
So, why is this a good idea? Organic growth strategies can yield long-term results without requiring a lot of money. With a limited budget required, you can try many different approaches to meet your goal. Just remember that it’s all about finding the balance between growth and performance marketing.
Switch It Up
As a common principle, a potential customer needs to encounter the brand at least seven times before they buy anything (although not a universal rule). However, consider the customer’s perspective. It can get annoying to see the same things over and over. So, keep your growth and performance marketing content fresh! By doing so, you can:
- Limit the chances of ad fatigue;
- Perform split testing;
- Adapt to a wider scope of customer preferences.
At MGID, one way that we implement this in growth and performance marketing is through dynamic ads. Here, different elements of the ad are automatically changed based on things like location and browser history.
Diversify Your Efforts
Have you ever heard the expression, “Don’t put all your eggs in one basket”? This applies to growth marketing and performance marketing as well. Make sure your marketing efforts are diverse. What does this mean?
- Use different platforms for advertising.
- Experiment with various ad formats.
- Consider the requirements of different audience segments.
By spreading your talents and budget across different growth and performance marketing efforts, unexpected events won’t affect you as much. For example, if the ads don’t perform as well on one platform, there are still others that you can rely on.
Invest in First-Party Data
The things you can do for growth marketing and performance marketing are highly reliant on the prevailing regulations. For instance, the tools you have long relied on for data collection may not be available in the future. Brands are already shifting towards first-party data collection due to regulations like GDPR and cookie deprecation. That’s why, as an advertiser, it’s valuable to have your own data for growth and performance marketing. You can try the following:
- Encouraging your viewers to sign up for things like newsletters and free resources;
- Creating interactive surveys and quizzes;
- Tracking purchase patterns;
- Creating loyalty programs;
- Using customer feedback.
When collecting data for growth and performance marketing, remember that you don’t have to do it all at once. You can ask for different information during your interactions with your audience.
Partner with Reputable Advertising Platforms
How sure are you that all the money you spend on growth and performance marketing is going where it’s supposed to? While you may not be able to go into minute details, you want to be sure that the ad platform is delivering what you want. Look for platforms with transparent reporting, strong brand safety measures and advanced targeting options.
For native advertising, having MGID to help you with growth marketing and performance marketing ensures that your ads are only shown to an audience who is likely to be interested and to take action. We work with more than 32,000 websites, so we can always find the perfect match for your content.
Growth Marketing vs. Performance Marketing? Both Are Necessary for Measurable and Sustainable Successes
It’s often best to divide a big goal into smaller, more attainable ones. That’s basically the difference between growth and performance marketing. While growth is needed to set the tone on where you want the business to be, performance marketing provides the financial means to get there.
For both growth and performance marketing, native advertising can be highly effective. Experts like us can help you boost the returns that you get from your ad budget. Just sign up for MGID to access top tools and resources (including a personal manager!) to help you succeed, regardless of your focus. Let’s make it happen!
