In a market with tense competition and uncertainty, companies are grappling to come up with unique customer acquisition strategies to stay on top and keep their revenue flowing. 

Budgets are tight but so are your marketing targets and getting the word out about your product and driving adoption isn’t free.

If this led you to meet the crossroad of whether to allocate more budget on growth or performance marketing during, read on. You’ll be more equipped to answer this question by the end of this article. 

What is performance marketing

Performance marketing is a strategic approach to generating results such as new users, leads and product activation through targeted and paid advertisements. 

Think about every ad run on YouTube, Facebook or any other blog posts you read. It’s a 'throw money, get results fast’ channel. You invest in advertising platforms hoping you’ll get more results than what you’ve paid for. 

However, in the modern day, it’s no longer just about the budget. In efforts of advertising platforms to deliver better experiences to end-users, marketers are forced to be more strategic in targeting the audience that matters to them. In channels like Google ads, targeted and relevant content are crucial ranking factors. Additionally, knowing what keywords to bid on and how much are also key elements in the strategy.

Similarly with paid social channels, running ads only to audiences that matter to you helps avoid paying for impressions to non-qualified audiences. 

What is growth marketing

Growth marketing is a data driven approach to marketing, leveraging organic channels where certain audiences often hangout.

Unlike performance marketing, growth marketing not only focuses on generating new users, it also helps improve customer retention.

To throw in a couple of examples, you finding this article is growth marketing and giving you ‘free’ content didn’t happen by chance - SEO is what led you to find this article, and the channel, content marketing.

Content marketers leverage search results data to determine if a topic or a keyword has enough search volume to write about. More demand, more chances to sell. 

Growth marketing vs. performance marketing

To help you better understand the difference, here’s a run down of channels mostly used in these marketing methodologies. 

Performance marketing channels

Google ads 

Google AdWords is an online advertising platform where advertisers pay to display their ads on Google's search results page. By targeting specific keywords, businesses pay to rank their ads at the top of the page. With a pay-per-click system, advertisers only pay when a user clicks on their ad.

Google AdWords operates as an auction for clicks, but the highest bid does not always prevail. In addition to the amount paid, Google evaluates the quality score to guarantee a positive user experience for ad clickers.

Paid display 

Display ads are advertisements that appear on websites, apps, or videos and are targeted based on specific keywords that relate to the content of the hosting site. These ads can be in the form of text, images, or videos.

LinkedIn ads

LinkedIn Ads is a paid marketing platform that enables access to LinkedIn's social network through a range of sponsored posts and other strategies. B2B companies can effectively leverage LinkedIn Ads to generate leads, build online visibility, share content, and achieve other marketing objectives.

Paid social

Paid social involves showcasing sponsored advertising content on external social media platforms with the intention of reaching particular target customers. Marketers frequently employ paid social media to enhance marketing effectiveness and engage with new customer segments.

Affiliate marketing

Affiliate marketing is a commission-based process whereby publishers promote products or services of another advertiser or retailer through an affiliate link, and receive a payout for driving a specific outcome.

This outcome is often a sale, but can also include leads, clicks, or app downloads. Many affiliate programs are free to join, eliminating the need for a large initial investment. With the right approach, affiliate marketing can evolve from a side project to a lucrative online business, generating substantial income.

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Performance marketing metrics

Understanding the metric is important when deciding on a new marketing channel to launch so you can have the analytics necessary to gather data and get insights on the results these channels bring.

In performance marketing, we’re looking to see:

• CTR  (Click through rate) - The CTR is a measure that indicates the number of clicks your ad gets vs the number of times it was viewed. It indicates how well your ads are performing. 

• CVR (Conversion rate) - It is a metric that measures the percentage of users who take a desired action, such as making a purchase or filling out a form, after clicking on an ad, visiting a website, or interacting with a product.

• Impression - An impression refers to a single instance of an advertisement being displayed to a user on a web page, mobile app, or other digital platform. It simply means that the ad was served or loaded onto a user's screen, regardless of whether the user interacted with it or not. 
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Other crucial metrics to measure in performance marketing are cost metrics, if you aim to generate a quick return on investment. The most common cost metrics in performance marketing include:

• Cost Per Click (CPC): The amount an advertiser pays each time a user clicks on their ad. CPC is commonly used in search engine advertising, social media advertising, and other forms of online advertising where the advertiser is charged per click.

• Cost Per Lead (CPL): The amount an advertiser pays for each lead or customer inquiry generated by their advertising campaign. CPL is often used in digital marketing campaigns where the goal is to generate leads, such as lead capture forms, email newsletter sign-ups, and other forms of user engagement.

• Cost per Sale (CPS): The amount an advertiser pays each time a sale is made as a direct result of an advertising campaign. CPS is a form of performance-based advertising where the advertiser only pays when a sale is completed.

• Cost per thousand impressions (CPM/CPT): The cost an advertiser pays for every 1,000 times their ad is shown, regardless of whether the ad is clicked on or not. CPM is commonly used in display advertising and other forms of online advertising where the goal is to increase brand awareness and visibility.

• Cost per Action (CPA): The amount an advertiser pays each time a specific action is taken by a user, such as making a purchase, filling out a form, or downloading an app. CPA is often used in performance-based marketing campaigns where the advertiser only pays when a specific action is completed.

These metrics tell the per per your desired action. By knowing this, you’d be able to gauge if a campaign’s generated results are worth the investment. 

Growth marketing channels

Content Marketing 

Content marketing is a marketing channel leveraging content such as videos, podcasts, blog, infographic to introduce and promote a product.

Organic content such as blogs and podcasts use search results data to come up with topics that are highly in demand. Content marketers write articles to deliver value to people looking for answers on search engines and social media channels and drive conversions through non-intrusive call to actions. 

SEO

Search Engine Optimization (SEO) refers to the process of refining a website's technical structure, content accuracy, and link prominence to increase its discoverability, relevance, and popularity for user search queries, thereby enhancing its search engine ranking.

SEO initiatives are designed to improve both the user search experience and page ranking by presenting content that meets user search requirements. Best SEO practices include incorporating pertinent keywords in titles, meta descriptions, and headlines (H1), employing descriptive URLs that contain keywords rather than strings of digits, and utilizing schema markup to define the page's content meaning, among other techniques.

Interactive content

Interactive content refers to any form of media that inspires user engagement in conveying its message, elevating the content experience from passive observation to active participation.

Interactive content can take many forms, including calculators, quizzes, ebooks, videos, and animated infographics. While not exclusively digital, the internet provides numerous formats for this kind of content, opening up fresh possibilities for user interaction.

Organic Social 

Organic social media is any activity on social media that is not promoted through paid advertising. It involves utilizing free social media tools to develop and connect with an online audience. In contrast, paid social media refers to any social media content that is impacted by advertising expenditure.

Email marketing

Email marketing is a marketing strategy that leverages emails to publicize a business's products and services, while also motivating customer loyalty. It is a means of informing the clients on your email list about new products, discounts, and other services. Additionally, email marketing can be used to impart knowledge to your audience about your brand's value proposition or sustain engagement between purchases.

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Growth marketing metrics

Growth marketing metrics aren’t that far off performance marketing and can be measured in many ways. However, gathering data could become a challenge if you have multiple growth marketing channels. 

If you’re just starting, Google Analytics might suffice, however, as you grow bigger, the need to implement more robust marketing analytics tools will help your team have access to more accurate data and insights on performance. 

To give you an idea of how to measure the success of a growth marketing strategy, here’s a quick run down of the important metrics you should look at:

• Traffic - traffic refers to the number of users who visit a website or web page. It is often measured in terms of the number of sessions or visits to a website within a given time period. Website traffic can come from various sources, including search engines, social media platforms, referral links, direct visits, and paid advertising.

• Conversion - a conversion refers to a specific action that a user takes on a website or in response to an advertisement, which is considered valuable to the business or organization. This can include actions such as making a purchase, filling out a form, subscribing to a newsletter, downloading an app, or registering for an event.

• Conversion rate - like in performance marketing, growth marketing also measures the conversion rate to gauge how many of the visitors(traffic) made your desired action, whether it’s user sign up, form submission or activation.
  
  

• Retention Metrics - These metrics measure the number of users who continue to engage with the product or service over time. Common retention metrics include churn rate, monthly active users (MAU), weekly active users (WAU), and customer lifetime value (CLTV).

• Referral Metrics - These metrics measure the number of users who refer new users to the product or service. Common referral metrics include referral traffic, referral conversions, and referral rewards.
  
  

• Revenue Metrics - These metrics measure the financial impact of growth marketing campaigns, such as revenue generated, average order value (AOV), and customer acquisition cost (CAC).

These are just a few of the metrics to keep in mind when measuring the success of your growth marketing efforts. Keep in mind that they can vary depending on the medium you use for it. For example, LinkedIn and other social media channels provide analytics on organic social growth which could be different from other channels such as Google. 

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Performance marketing & growth marketing: Which is right for you?

We’ve come towards the end of the article and we saved the best for last. From onemarketer to another, it’s a good practice to have diverse conversion sources.

Some platforms might not perform as great during a period (also known as seasonality) or it simply reached the peak of the curve and the market is saturated. If you’re reliant on one channel, you risk losing sources of user growth when seasonality hits. 

If the budget stands your way, think about your short term goal. Does your company need to generate results fast to catch up to the next funding round? Invest more on performance marketing to get fast results.

If you’re just starting out and don't have the budget yet, learn the skill and crack growth marketing to drive organic growth.

If you’re growing and looking to reduce your CPA, consider growth marketing. You can leverage blogs and content to get more out of your investment. A $200 - $500 investment in a high quality content could bring you conversions for as long as it lives vs. an ad where you can easily spend the same amount in a day and what you get is what you get.

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The role of product-led growth  

There’s one more key aspect to consider – product-led strategy. This takes into account your target market and persona. There are channels that your target audience might engage the most. This is especially true for technical personas. If this is in consideration, growth marketing might be a better strategy for you. 

This initiative is usually led by a Product Marketing Manager who provides insights about the market and conducts a personal analysis to come up with the best way to position the product in the market.

Read our article product-led growth if you wish to learn more.

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Summary:

I hope this article helps. We’re an honest content marketing company who write content to bring value and only offer our solution when it’s right. If you want to drive organic growth, reach out to our team or learn more about our offer here. 

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