Performance Marketing vs. Growth Marketing: How to Prioritize Correctly

As a business owner, you know that marketing is essential to your success. But, with so many different marketing strategies available, it can be hard to know which one is right for you.

In this article, we'll compare two of the most popular marketing strategies: performance marketing and growth marketing. We'll discuss the pros and cons of each approach, and help you decide which one is right for your business.

Let's dive in and break down each marketing strategy to figure out the best marketing option for you.

Understanding Performance Marketing vs Growth Marketing

Let's start by learning what these types of marketing strategies mean and how they work in any industry. Next, we'll look at their advantages and disadvantages.

What is performance marketing?

Performance marketing is a results-driven approach to marketing. Businesses that use this approach focus on achieving specific goals, such as increasing sales or generating leads.

To do this, they invest in paid advertising, such as Google AdWords or Facebook Ads. They then track their results carefully to see how effective their campaigns are.

Performance marketing is a popular choice for businesses that want to see immediate results from their marketing efforts. It's also a good option for businesses with a limited marketing budget.

What is growth marketing?

Growth marketing is a more holistic approach to marketing. It's about finding sustainable ways to grow your business over time.

Businesses that use this approach focus on building a strong brand, creating valuable content, and developing long-term relationships with their customers. It can include loyalty programs, email marketing, and strategies like leveraging online business cards.

Growth marketing is a popular choice for businesses that want to scale their operations. It's also a good option for businesses that have a large marketing budget.

Now that we've looked at the basics of each marketing strategy, let's compare their pros and cons.

The Pros and Cons of Performance vs Growth Marketing

You'll find some overlaps between these two marketing approaches, but their core approaches to marketing will demand different efforts, budgets, and skills.

Let's start with performance marketing.

Performance Marketing Pros:

Here are some of the advantages or pros of using performance marketing in your business

Can be a cost-effective

The main benefit of performance marketing is that it can be a cost-effective way to market your business. With paid advertising, you only pay when someone clicks on your ad.

This means that you can control your marketing budget and only spend what you can afford. But on the flip side - it will get expensive when you're determined to get conversions.

Can be used to target a specific audience

Another advantage of performance marketing is that it allows you to target a specific group that matches your buyer persona.

For example, if you're selling products for new mothers, you can use performance marketing to target ads to women who are pregnant or have recently given birth.

This ensures that your ads are seen by people who are most likely to be interested in what you're selling. And there are several ad platforms that help you target the right people - this includes Google Adwords, Facebook, Reddit, and other ad marketing platforms.

Can provide quick results

A final advantage of performance marketing is that it can provide quick results.

If you're running a time-sensitive campaign, such as a holiday sale, performance marketing can help you generate leads and sales quickly.

This is because you're specifically targeting people who are interested in what you're selling.

In a case study by Think With Google, The Honest Company was able to increase its return on ad spend by 47% through testing and experimentation.

Being able to run split tests and see immediate outcomes is another major advantage of performance marketing.

Performance Marketing Cons:

Now, let's look at some of the disadvantages or cons of using performance marketing in your business:

Can be expensive

As we mentioned earlier, performance marketing can be expensive. This is because you're paying for each click on your ad. So, if you're not careful with your budget, you could end up spending a lot of money on your marketing campaign without seeing any results.

Doesn't translate to long-term results

Another disadvantage of performance marketing is that it doesn't always translate to long-term results. Yes, it can help you generate leads and sales quickly. But once your campaign is over, those leads and sales will stop coming in.

This is because you're not building a relationship with your customers. You're simply paying to get their attention for a short period of time.

Now, let's look at the pros and cons of growth marketing.

Growth Marketing Pros:

Here are some of the advantages or pros of using growth marketing in your business:

Can be a long-term strategy

One of the main benefits of growth marketing is that it can be a long-term strategy.

Unlike performance marketing, which is focused on generating leads and sales in the short term, growth marketing is about building a relationship with your customers.

This means that you can continue to market to them even after your initial campaign is over.

For example, if you're running a holiday sale, you can use growth marketing to not only generate sales during the sale but also to build a relationship with your customers so that they come back to you in the future. Just be sure to ask people to subscribe to your newsletter or opt-in for communication so that you can reach them later.

Can be used to increase brand awareness

Another advantage of growth marketing is that it can be used to increase brand awareness.

With performance marketing, you're focused on generating leads and sales. But with growth marketing, you're also focused on boosting your reputation.

This means that people will remember your brand even when they're not actively looking to buy anything. And this can be beneficial in the long run as it can lead to more sales and loyal customers.

Can help you save money

A final advantage of growth marketing is that it can help you save money.

Unlike performance marketing, which can be expensive, growth marketing is a more cost-effective way to market your business. Especially over the long run.

This is because you're not paying for each click on your ad. Instead, you're focused on building a relationship with your customers. As a result, you'll drive organic traffic over time, build a brand image, and establish yourself as a thought leader.

Growth Marketing Cons:

Now, let's look at some of the disadvantages or cons of using growth marketing in your business:

Takes time to see results

One of the main disadvantages of growth marketing is that it takes time to see results.

Unlike performance marketing, which can provide quick results, growth marketing is a long-term strategy. So, it can take months or even years to see results.

This is because you're focused on building a relationship with your customers. And this takes time and several interactions.

It needs more resources

Another disadvantage of growth marketing is that it requires more resources. This is because you need to invest time and money into creating valuable content in blogs and podcasts, interacting with customers, and building a brand. And if you're not careful, this can quickly become expensive especially when you start investing in tools.

So, those are some of the pros and cons of performance marketing and growth marketing. As you can see, each has its own advantages and disadvantages.

So, Which One should you choose?

There's no absolute right answer to choosing between these two approaches. Ultimately, you have to ask yourself:

• Do you have enough funds at present to sustain performance marketing strategies like ads?
• Can you wait for several months or years before you see an outcome from your content creation?
• What's more important to you right now? Sales or building your reputation?

When you answer these questions, it becomes quite clear what you should do. And better still - you can combine both approaches to marketing, so you don't have to choose one or the other.

Over to You

So, what do you think? Do you prefer performance marketing or growth marketing?

Hopefully, this post has given you enough insights to decide this on your own. Choose the right approach based on what you want to achieve for your business.