When it comes to strategy for data-driven marketing, there are two dominant approaches that are typically discussed: performance marketing and growth marketing. Both approaches are rooted in measurement (what did we get) and optimization (what are we going to do going forward), but the philosophy behind the approach as well as how it plays out practically are different. If you’d like to recognize these differences, you could consider changing the way you think about acquiring customers and growing your business.
Performance Marketing: The Efficiency Machine
Performance marketing focuses on explicit, immediate, and measurable outcomes. The performance marketer expects every campaign to have a specific action in mind—was it a click, a lead, a purchase, a download, etc. The model is pretty straightforward: performance marketers will only invest in channels that can deliver predictable, cost-effective results.
Key aspects:
- Pay-per-action pricing models
- Short horizon ROI targets
- Optimizing for specific channels
- Linear attribution models
- Evaluate performance as campaigns
Performance marketers like to scale things that work well. They know what a winning ad creative looks like, can optimize for audience targeting attributes, and maximize return on ad spend through testing and tinkering.
Growth Marketing: The Lifecycle Engineer
Growth marketing takes a more broad experimental approach. Growth marketers are less focused on paid acquisition in isolation—they are reviewing the entire lifecycle of the new customer, searching for scalable opportunities.
Principles in brief:
- Full-funnel optimization
- Integration with product-led growth
- Cross-functional collaboration
- Long-term value creation
- Systematic experimentation framework
Growth marketers don’t just acquire users; they also work to activate users, retain them, and turn them into advocates. They may optimize onboarding flows, experiment with referral programs, or improve product features that contribute to organic growth.
The Strategic Differences
Focus of Timeframe
Performance marketing requires short-term returns and monthly goals, while growth marketing promotes sustainable long-term growth, providing an opportunity to accept lower upfront returns for higher value over time.
Scope of Influence
Performance marketers own paid acquisition channels and campaign spend, whereas growth marketers will work and collaborate with cross-functional teams including product, engineering, and customer success functions to optimize the full user experience.
Measurement Model
Performance marketing will primarily articulate success through direct attribution—this ad generated this sale. Growth marketing will embrace complex attribution models and evaluate their contribution to broader business metrics.
Risk Tolerance
Performance marketers typically prefer high fidelity and established scalable playbooks with results that are predictable, while growth marketers will embrace riskier experiments that may lead to leveraged growth multipliers.
When to Choose Each Approach
Choose Performance Marketing When:
- You need immediate, predictable results
- Budget efficiency is the primary concern
- Your product has proven market fit
- Scaling existing successful campaigns
Choose Growth Marketing When:
- Building long-term competitive advantages
- Exploring new market opportunities
- Optimizing complex customer journeys
- Focusing on product-market fit refinement
The Integrated Approach
The most effective companies don’t pick performance marketing over growth marketing or vice versa; they implement both. The performance marketing approach gives a measurable and reliable practice for customer acquisition, and growth marketing is designed to investigate new opportunities and optimize the entire customer experience.
This integrated strategy could look like:
- Using performance marketing to scale existing proven paid channels
- Using growth marketing to test new acquisition strategies
- Optimizing conversion funnels through your performance marketing practice
- Building programs to improve retention linked to growth marketing experimentation
Building Your Marketing Strategy
When developing your marketing strategy, consider the stage of your business and your business objectives:
Early-stage companies benefit from growth marketing experimentation while trying to find product-market fit and identifying potential scalable acquisition channels.
Scaling companies require precision from a performance marketing strategy while expanding their existing proven channels. Growth marketing can then be used for experimentation testing other opportunities.
Mature companies are typically using both—they will employ performance marketing for predictable growth while exploring innovation and market expansion through growth marketing.
The Bottom Line
Performance marketing and growth marketing strategies are not opposing philosophies; they complement one another for different strategic purposes. The key is to understand when to use each approach based on specific situational criteria and how to integrate both for maximum business impact.
Success is identifying a marketing strategy that aligns with your growth objectives, the maturity of your business, and the state of the market.