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Growth Marketing vs. Performance Marketing: Key Differences

If you’ve searched for marketing strategies or follow #MarketingTwitter, there’s no doubt you’ve seen the terms “growth marketing” and “performance marketing” before. If you have, you’ve probably wondered, “What’s the difference?”

All marketing is created with the aim of high performance to help your company grow. Poor naming aside, there are substantial differences between growth marketing and performance marketing.

In this article, we'll define each strategy and describe each's tactics and goals, as well as the most significant differences between them.

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By the end of the article, you’ll have a better idea of whether you should pursue a growth marketing or performance marketing strategy for your company.

How to Evaluate Growth Marketing vs. Performance Marketing

There is a specific time and place for your company to decide on performance marketing. If you’re aiming to sell a certain number of products this month or you’re hoping to boost your email sign-ups, performance marketing teams may be a solution for your business needs. 

However, these things do happen organically through growth marketing campaigns. Instead of focusing on a specific sales goal, growth marketing sets the goal as your business's overall growth. 

If you are an early-stage Saas or tech company looking to grow an audience and aren’t worried about specific sales goals, growth marketing may be the best strategy for your next marketing strategies. 

Successful companies use both strategies, and neither one is better than another. Our goal is to help you better understand the ins and outs of each strategy to help you make a more informed decision for your company.


What is Growth Marketing?

Growth marketing is a full-funnel approach to marketing. While most traditional marketing focuses on generating traffic and leads, growth marketing teams use their expertise to influence the entire AAARRR funnel, what we call the “6 Levers of Growth”:

  • Awareness - how many people know about you and what you offer?
  • Acquisition - how many website visitors can you get into your funnel using a lead magnet?
  • Activation - how well do you nurture and further qualify your leads to ready them for a conversion?
  • Revenue - how many leads do you convert into paying customers?
  • Retention - how do you reduce churn, upsell, and otherwise prevent customers from leaving?
  • Referral - how do you use the experiences of your current customers to influence Awareness, Acquisition, Activation, and Revenue?

Growth marketing teams aren't simply looking to get new business in the door. They also play a key role, along with sales and customer teams, in turning customers into fans. 

Growth marketing focuses solely on driving growth and the metrics directly influencing growth. Growth reams use a strategy and data-driven approach to experiment rather than implement "best practices" or measure vanity metrics.

Common Growth Marketing Tactics and Channels

Which tactics and channels do growth marketing teams use? It dependes on the goal and the established growth strategy. Because of the focus on all AAARRR metrics, growth marketing teams can use nearly tool in their marketing toolbelt. 

That said, growth marketing teams generally gravitate toward tactics compound over time over more on/off types plays. A good example is, a piece of well-written content can attract and convert leads the day it's published and from that point on. On the flip side, Google ads require continuous financial investment. They may produce leads when they are running, but that only lasts as long as the budget does.

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As such, growth marketing tactics and channels revolve around content and using it to influence and deliver value in each lever of growth:

  • Consistently published blog posts with CTAs leading to contextually relevant lead magnets
  • SEO: KW research, optimization, and link building
  • Automated email marketing
  • Targeted email marketing campaigns to specific lists or contacts based on past behavior
  • Repurposing content across social media, search platforms, and in different formats
  • Creating lead magnets for use across cold, warm, and hot webpages on the website.

RELATED: 6 Criteria Differentiating Growth Teams vs. Traditional Marketing Teams 

Growth Marketing Metrics & Goals

As we've discussed, growth marketing's “North Star” metric is growth rate. But there can be numerous other metrics that growth teams measure, such as:

  • Website traffic: direct, organic, or other channels
  • Leads of all types: Marketing-Qualified Leads (MQLs) and Sales-Qualified Leads (SQLs)
  • Email metrics like opens and clicks
  • SEO metics such as Domain Authority and how the website ranks for specific keywords
  • Retention statistics like churn rate, upsells, and cross-sells.
  • Revenue generated from current customers through direct referrals, case studies, or testimonials.

What is Performance Marketing?

Performance marketing is a term to refer to online marketing and advertising programs where advertisers pay only when a specific action occurs. This action may be a generated lead, a product’s sale, a click on an article, or any number of user-driven actions. 

In contrast to growth marketing, the goal is to obtain new customers. Performance marketing is all about impressions, clicks, and leads. There is little to no focus on activation, and revenue, retention, and referrals are a consideration for another individual or team in the marketing department.

Performance marketing is also a one-and-done system. As long as you have the budget to keep ads going, they will produce. But once the budget is gone, the campaign is turned off, and your asset isn’t visible. This is why performance marketing is usually best for one-off campaigns.

Common Performance Marketing Tactics and Channels

Performance marketing relies on paid marketing channels. Common tactics used in performance marketing include:

  • Native advertising: These types of ads don’t look like traditional advertisements. They align with the publication or website's established editorial style and tone and provide the kind of information the publication's audience expects.
  • Sponsored content: According to Hubspot, sponsored content is a type of promotional media that's paid for by an advertiser, but created and shared by another brand, influencer, or publisher. Companies using sponsored content sponsor a company or influencer who aligns with their target customer segment and topic. When done right, sponsored content feels like a natural fit rather than an invasive ad.
  • Affiliate marketing: This is when you earn a commission by promoting other people’s products. Often, brands will partner with influencers and who have an “affiliate” link, where the influencer gets a small cut of profit for generating that sale. 
  • Social media advertising: This is precisely what it sounds like - an advertisement on social media. It may take the form of sponsored advertising or native advertising, or it may also be a banner or video ad. 
  • Search engine marketing: When you use websites like Google, the first few results usually say “ad” next to them. You can pay to advertise on search engines and be one of the first things people see when looking for a specific product. 

Performance Marketing Metrics & Goals

Is your goal to generate sales? Is your goal to have a potential customer sign up for an email blast? Determining your most important and impactful metrics is crucial before deciding on performance marketing. 

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Performance marketing campaigns typically track metrics like:

  • Return on Ad Spend (ROAS): how much your business earns per dollar you spend on advertising.
  • Return on Investment (ROI): Your sales growth minus your marketing cost, divided by your marketing cost. This tells you how much you gained from the investment that you made in advertising. 
  • Cost Per Impression (CPM): The amount the advertiser pays a publisher per one thousand impressions.
  • Cost Per Click (CPC): The amount the advertiser pays per click of their ad. It is the total ad spend divided by the number of ad clicks.
  • Cost Per Sale/Cost Per Conversion (CPS/CPV): The amount an advertiser pays per sale generated by an ad. It is the total ad spend divided by the dollar amount of sales generated by the ads. 
  • Cost Per Lead (CPL): What the advertiser pays when they receive a sign-up from a customer from an ad. 
  • Cost Per Acquisition (CPA): What the advertiser pays when a specific action occurs. This action may be a form of completion, a click, or a sale. 

Growth Marketing vs. Performance Marketing: Which is Right for You?

There are many different factors to consider when answering this question, but let’s look at two of the most important factors:

  1. What stage is your company in?
  2. What are your goals for the next 3-5 years?

If you’re an early-stage company with a solid product that fulfills a need the existing alternatives don’t, growth marketing is the better fit. Why? It focuses on optimizing and building for growth, not just impressions, clicks, and downloads. Growth marketing looks at how a company grows from all angles, not just dumping leads (qualified or not) to a sales team.

Growth marketing teams hone in on what makes a company grow and then execute on it, using data and experiments to guide them on their way. And goals in a growth marketing strategy aren’t subjective. Whatever the growth goal is, you create the model and either hit the numbers or you don’t. Growth is achieved through making customer acquisition a profitable endeavor.

Performance marketing requires a higher budget, and you need to know how to use the necessary platforms. Of course, you can outsource to marketing firms, but those may be more expensive, and their answer for any shortcomings will be “Spend more to get more.” 

Performance marketing doesn’t focus on qualifying leads and nurturing them through a buyer journey; it’s purely transactional. This is not the right play for early-stage companies who need to build awareness, convert leads, and prevent them from churning.

Growth Marketing is a Proven Path to Growth

That might seem like a bold claim, but we’ve done the math and know growth marketing works. We’ve helped brands generate over $100,000,000 in added client revenue and raise over $90 million in funding. If you have a growth mindset and want to become a high-growth company, we may just be the right outsourced growth team for you.

Your next step is to download our Growth Marketing Kit. Aside from having practical resources you can use for your company right now, you’ll also learn more about our approach to growth marketing to determine if your goals and our philosophy align.