A big mistake amongst new business owners or marketers is wanting results fast. They decide the time to create an audience is too long and won’t have proof that their marketing is attributing to an increase in business back-end performance. So they go down the route of paid media marketing and end up wasting thousands of dollars of ad spend.
Paid media campaigns are more appetizing at first because they can generate results fairly quickly and make it easy to see how the marketing budget impacts things like conversions or revenue.
So what direction should you get into first? Performance Marketing or Growth Marketing?
In this article, we talk about what both are and the best uses cases for each.
What is Performance Marketing?
According to Taboola, Performance marketing is a comprehensive term for online marketing and advertising programs where advertisers pay only when a specific action occurs. These actions can include a generated lead, a sale, a click, and more.
The idea behind performance marketing is that every dollar spent on your marketing campaign attributes to revenue. Let’s say you spend $1 on the marketing campaign, that $1 investment needs to attribute to at least $1 of revenue to say you break even on that campaign. That revenue could come upfront as a sale or long-term like a lead generated who purchases later.
A performance marketer tends to use marketing techniques that generate actionable results very quickly at a set dollar price. They are given marketing budgets to spend and need to hit revenue goals based on that budget. Performance marketing tends to focus on short-term results instead of long-term results.
What is Growth Marketing?
Growth marketing puts an emphasis on carrying our marketing campaigns to grow the business in the long term. The objective is to establish a well-oiled inbound funnel from lead acquisition to final conversion.
The idea is that if you put dollars into the optimization of each of the different stages throughout the funnel, you will create a well-oiled machine that will allow your business to grow exponentially.
How do Performance-based Strategies Differ from Audience-based Strategies?
Performance-Based Marketing Strategies
As mentioned, performance marketing relies on channels that are mostly paid. The great thing about paying for exposure is that you can get results pretty quickly and are tailored to your audience if done correctly.
Paid Social
Paid social media involves running advertisements or boosting organic posts across the various social media channels in hope that you’ll find someone willing to purchase your offer.
There are numerous campaign types you can run on most social media networks. You can run sales conversion campaigns, lead generation, and click-to-call.
The most popular social media network that offers paid media is Facebook. Facebook Ads is a very effective tool for e-commerce businesses to advertise on because it probably has the largest pool of audience members across all ages and generations.
Instagram, Tik Tok, and Snap Chat have also grown in popularity as paid social channels since are mostly geared toward the younger demographic.
With social media being more popular than ever, these paid platforms aim to be very accessible. With the number of advertisers on these platforms (mostly on Facebook), social media ads can get pretty expensive depending on the vertical.
As a potential advertiser, you need to ensure you are properly communicating the offer and have very compelling creative & landing pages that’ll make the ad viewer convert.
Search Engine Marketing
Another form of paid media that balances quality and price is search engine marketing. Search engine marketing is great because your advertisements are shown to people that intend to have their problems solved.
For example if you are advertising coffee on Google, your ad will show up when people enter coffee-related queries (depending on the keywords you select) into the Google search engine.
Google and Bing are two of the most popular search engines that provide advertising services. However, Google accounts for a large majority of all internet searches so it’s more commonly used than Bing for search engine marketing. YouTube is also another search platform that offers space for ads.
The types of ads found on search engine marketing platforms include basic text ads and display ads (image ads). Cost per click or conversion costs all depend on your ad quality, competition, and the vertical you are in.
One thing to also note, there are many restrictions on what you can and cannot advertise. For example, to run advertisements related to health insurance, you need to provide certification that you are indeed a health insurance carrier.
Affiliate Marketing
Affiliate Marketing is when you have an outside party (an affiliate) help you promote your product or service with the incentive for them being a commission or an up-front rate for their service.
Usually, affiliates have a website that drives traffic to a certain vertical and places your ad on that website that links back to your landing page. The traffic that completes your landing page form or purchases your product can be them traced back to the affiliate through a pixel and they will be compensated for the effort
What’s great about affiliate marketing is that it’s much cheaper to run advertisements. Your cost per acquisition or cost per conversion is also much cheaper than paid social media or search engine marketing. You can also find ad networks tailored to specific verticals like affiliate networks of gambling or insurance websites, two verticals that are restricted on most paid social media and SEM platforms.
The downside to affiliate marketing is although you can acquire volume very cheaply, the quality of the person visiting your landing page might be suspect. Plus, good publishers or ad networks are very hard to come by.
Native Advertising
Native Advertising is when people are shown advertisements that blend into the content of articles or websites they are viewing. The website visitor sees the ad and clicks on it, thinking that the image is a part of the webpage.
This channel is becoming more and more popular due to the restrictions brought on by search engine marketing. This performance marketing method matches the best affiliate marketing and search engine marketing have to offer. Native ads are also very cheap and affordable.
Growth-Based Marketing Strategies
Growth marketing is very slow and methodical. The main idea is to grow your audience. You seek out where your audience is and build a marketing channel to effectively acquire their attention and drive them into your funnel.
Search Engine Optimization & Content Marketing
Writing search-optimized content is a great way to build a new audience. However, creating content that matches your customers’ intent and having that rank organically on the search engines is no easy task.
Typically, you want to start with content that is related to your product or service. How-to articles, infographics, and lists are some of the first types of content pieces you should focus on and probably would be easiest to rank for.
Once you get some customers and traffic to these pages, you may then look to better directly address your customer’s problems. If you survey your audience and notice they are having similar concerns about your product, you should maybe write an article to address that.
Content marketing is an integral part of audience growth because it is the “gas that fuels the car”. Every other channel like social media marketing and email marketing feeds off the content you develop. Making good content and optimizing it for search should be a high-priority item when adopting a growth marketing strategy.
Email Marketing
Email marketing is an effective strategy to grow your audience. Having an email sign-up or a form to a lead magnet is a way to create a captive audience. This captive audience will be exposed to your brand and its offerings over time.
On average a customer needs 7 exposures to your brand and an offer to make a conversion. Email marketing is an effective tool because your audience will be shown emails and content weekly from your brand. The people who engage the most will most likely convert on a product purchase.
There are several avenues you can head down in email marketing. You can set up an e-commerce automated email flow that triggers based on user actions on your website for example sending an abandoned cart message. The goal of these emails is purely transactional.
Email newsletters are better suited to nurture your audience on your brand. You want to provide useful information to them to keep them engaged.
Organic Social Media
Using social media to promote your business is a necessary technique that all businesses can probably utilize in 2022. You can create organic posts of your blog articles or offers in hopes to drive traffic to your website.
In the last few years, social media has changed. The days of primarily posting links to website content on social networks and getting reach are gone.
Using engaging content like videos and photos is probably the number one way to get some sort of reach organically on social media. Depending on how engaging the content you make, you have a chance to go viral and be exposed to millions of people. However, that is a very unrealistic expectation to approaching social media.
The goal should be consistent. Creating good content day in and day out will help you grow your audience.
What are the ideal use cases for each?
Growth Marketing Should Be Used By Newer Brands
You should opt for a growth marketing strategy if you are a newer brand. Before you even think about using paid media, you need to identify the characteristics of your target audience. You need to find out where they hang out and what channels you need to optimize to reach them.
Once you find your audience, you then need to find out more about the unique attributes of a person willing to convert. Find out the age, location, purchasing habits, interests, and other information you can use to better help you target the customers that want to convert to your product or service. Also, once you get this figured out it can help you leap into the performance marketing world.
The problem with jumping into performance marketing right away is that you’ll most likely lose a lot of money testing and retesting trying to figure out who is your ideal audience.
Performance Marketing is for Established Brands
If you’re more of an established brand looking to get results quickly, performance marketing is the way to go. As long as you have an idea of the characteristics of your target audience and enough budget to sustain a test ($3000 per month minimum) you should be alright. Make sure that you have optimized your landing pages for conversion and that your ad creative looks good and communicates the message you are trying to send.
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