Marketers Confused About Performance Marketing Vs. Growth Marketing
There is a lot of confusion in the marketplace around the definitions of performance marketing, growth marketing, and how the two differ from each other. That’s what data shows from a survey conducted by agency 3Q Digital, founded by David Rodnitzky.
To determine how marketers think, the agency targeted 400 marketing leaders, with titles ranging from senior manager to CMO in the U.S.
The team looked at companies in four specific industries: retail, technology/Software-as-a Service, financial services, and healthcare sectors. The companies had annual revenue of at least $100 million and at least 100 employees.
When survey participants were asked whether they knew the definition of performance marketing, 97% stated that they did. But when respondents were presented with six statements and asked to select all that apply to performance marketing, only 13% of respondents selected five or more correct definitions, with 1% selecting all the right answers. Eighty-nine percent selected two or more incorrect definitions, and 21% selected more incorrect definitions than those that were correct.
For clarity, the report identified the statements that apply and the ones that do not.
What Performance Marketing is:
- Specifically focused on all things search — organic (SEO) and paid (PPC and Social), conversion rate optimization, A/B testing, and driven by data and analytics — to reach consumers at the right moment in the right context.
- A repeatable process with continuous optimization, driven by short-term metrics like return on ad spend (ROAS), ROI, conversions, and revenue.
- Primarily bottom of the marketing funnel activity that monetizes your audiences, pushing content geared toward conversions and revenue and achieving marketing goals that are not necessarily tied to business goals.
- Expression of the brand’s customer experience, and not the entire journey.
What Performance Marketing is not:
- The combination of demand creation and demand capture to engage people, motivate behavior, and generate intent buying.
- Focused on all stages of the marketing funnel, including brand building, demand creation, and demand capture.
The same question was asked about growth marketing. This time, only three answers were applicable to the term, and there was even more confusion among respondents.
Only 10% got five or six answers correct, with only 1% selecting all of the right answers. Some 56% scored more than two or three incorrect answers, while 35% got more answers incorrect than correct, and 81% did not understand that growth marketing requires using broader company goals to plan media strategy.
Less than half (46%) think growth marketing includes cross-channel measurement connected to the health of the business and higher-level business objectives/strategies.
What Growth Marketing is:
- Long-term, full-funnel strategy to grow a larger and highly engaged audience to help reduce churn and increase the lifetime value of each individual customer — attracting, engaging, retaining, and turning customers into brand champions.
- Broader cross-channel measurement connected to the health of the business and higher-level business objectives and strategies.
- Leveraging broader company goals to plan digital media strategy.
What Growth Marketing is not:
- Combination of brand awareness and demand creation to engage people and motivate behavior.
- Delivering valuable customer experiences, seeking new ways to add useful information, build relationships, and foster loyalty.
- Specifically focused on bottom-funnel activity, pushing content geared toward conversions and revenue.
The survey findings suggest that it is time for marketers to move to a growth marketing approach. Earlier this year, the agency rolled out the 3Q Digital Growth Model in response to the challenges the agency and clients faced.
Only 18% of all respondents — 72 of the 400 surveyed — are thinking about growth marketing or have a growth marketing mindset.
3Q Digital created pillars to determine things such as strategic approach, data management & activation, management buy-in, resources & structure, and integrated customer experience. Then they scored the group into segments defined as laggards, challengers, performers, transformers, and disrupters.
To succeed in these times, the agency believes, more marketers must rely on growth marketing. And there is much room for improvement.
Here’s what the data shows:
- 1% of respondents were classified as “Laggards,” and all came from the financial services industry.
- 10% were classified as “Challengers,” evenly distributed across all four industries (retail, SaaS/tech, financial services, and healthcare).
- 57% — the majority of respondents — identified as Performers and were spread across retail, SaaS/tech, and healthcare.
- 27% of respondents were classified as “Transformers” and 40% of these came from the SaaS/tech industry.
- 5% were classified as Disruptors — those who have reached the top tier — and are represented by all four industries.