Performance vs. Growth – Two sides of the same coin?

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Amish Zinzuwadia, Paid UA Lead at Yodel Mobile, looks at the differences between Performance and Growth Marketing, and explains how they complement each other in a successful app marketing strategy.   

In the dynamic and competitive landscape of mobile apps, success is often measured by intricate performance metrics contrasted against broader, long-term goals of growth and sustainability. In app marketing, performance marketing and growth marketing are usually distinguished as two schools of thought. However, the line between these two disciplines is blurring, and they could soon merge into a unified approach.

Let’s start by revisiting each discipline individually to understand the key differences that make these two strategies work together.

What is Performance Marketing?
Performance Marketing is all about achieving tangible outcomes. It entails pinpointing your Key Performance Indicators (KPIs) and fine-tuning your campaigns through testing and adjustments until you reach your objectives. This involves analysing engagement metrics like clicks and clickthrough rate (CTR) to optimise your creative elements and messaging.

Delving deeper into the customer journey, you assess conversions such as Costs Per Install (CPI) and Costs Per Acquisition (CPA). This is typically aided by a Mobile Measurement Partner and data you can pull directly from the advertising platforms. Performance Marketing operates across a variety of channels, including Search, Social and Programmatic Display. However, it’s important to emphasise that it comes at a cost – careful media budget planning is crucial to maximise your marketing investments, a perpetual endeavour to answer the age-old question posed by John Wanamaker over a century ago:

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

What is Growth Marketing?
This is a more holistic approach to your marketing, and not just a numbers game. It takes a broader, more long-term view, and investigates strategies to grow your user base and retain them. Metrics are still important, but not necessarily the same ones as for Performance Marketing. It’s all about quality vs. quantity, looking at deeper metrics such as Lifetime Value (LTV) and Daily or Monthly Active Users (DAU/MAU), because if these are on the rise, then we know the more users we acquire from Performance will stick around longer and drive sustainable business growth, such as revenue or engagement. The channels to run Growth Marketing on are not the usual suspects. They encompass non-direct sources such as content marketing, referrals, CRM & ASO. Money always matters, so there are budget considerations for Growth Marketing, but measuring your ROI is not as simple as CPIs or CAC. Uplifts in engagement, active users, or new product utilisation, over a longer period of time, is what will matter the most.

The cross collaboration of Performance and Growth Marketing
Though there are intrinsic differences between Performance and Growth Marketing, bringing the two together will elevate app acquisition, engagement, and retention strategies for any app brand. This convergence integrates the precision of Performance Marketing’s data-driven approach with the strategic, holistic vision of Growth Marketing. By aligning objectives, leveraging insights, and optimising user experiences, this collaborative effort is the key to success.

Data is oil with Performance Marketing and Growth Marketing
Data is akin to the modern-day oil. This is because data is valuable for any business to help them thrive and grow. Its significance lies in driving effective campaigns, now propelled by Machine Learning and Artificial Intelligence, to optimise and target the most relevant users – hinging heavily on conversion data. Furthermore, growth in any application is contingent on understanding user data – identifying where engagement drops and devising strategies for enhancement.

Customer behaviour insights, preferences, and trends through performance analysis inform growth strategies. Concurrently, growth initiatives aid in retargeting audiences and enhancing performance metrics.

This is something we have trialled and tested across categories for various brands. For one of our Video on Demand clients, our data analysis identified that they achieved a higher conversion on Sundays. It may sound simple, but this insight dictated how we allocated our budgets throughout the week. So, by allocating a higher budget on Sundays, we achieved maximum results and ramped up ROI. The era calls for us to don our ‘googles’ and embark on a data exploration akin to drilling for oil!

Performing and growing while testing and learning
Performance Marketing may as well be synonymous with testing and learning, and if you’re not doing it, you’re not going to grow. Testing different targeting tactics, creative messaging and channels are all part of the game to help you impact metrics beyond install. Tactics like A/B testing can help you understand what your users prefer, whether it be to help increase conversion rate or improve lifetime value. Growth can incorporate these tactics for their CRM strategies, ATT prompts and pre-screening, user onboarding and all-important elements of the UX. So, being able to then learn from these tests and continually improve is imperative to help your app grow to further heights.

How Performance and Growth Marketing affect the customer journey
I touched on this point above when talking about UX. The journey from ad to app is one thing, but the user does so much more once the app is on their phones. This is where the magic happens for your business. Here are our recommendations for cross-pollinating your strategies:

  • You can use Performance Marketing to identify and target specific user segments based on demographics, behaviours, and preferences.
  • You can then your campaigns to appeal to these segments which help optimise your CPA and maximise your ROI.
  • You can leverage Growth Marketing to analyse user data and behaviour to identify high-potential segments which can similarly help personalise your engagement strategy (you can read more about how to refine your apps customer journey here.)

For one of our food app clients, our Growth team found that users were dropping off before conversion. This was because users were specifically dropping off at the verification stage of the onboarding process, because it was too difficult and tedious to complete. Therefore, we decided to gamify the process by making the verification more akin to a Captcha Screen, which improved the conversion rate.

Everything loops back to the Infinite App Growth Loop
Something very close to our hearts at Yodel Mobile is the Infinite App Growth Loop, a holistic framework bringing together performance and growth, as the insights and feedback from Growth Marketing, such as customer surveys and product usage analysis, can inform optimisations on performance marketing campaigns and vice versa. This offers you a flexible and agile marketing strategy to combat any growth obstacle.

Yodel Mobile’s Infinite App Growth Loop

Performance Marketing and Growth Marketing, although distinct, are inseparable and complementary, working together to drive the success of any app. Performance marketing focuses on immediate results and measurable outcomes, leveraging data and analytics to optimise user acquisition, engagement, and conversions. It’s akin to the fuel that propels the app forward, ensuring a steady stream of users and revenue. Growth Marketing is the compass that guides the long-term trajectory of the app. It’s about building a sustainable user base, fostering brand loyalty, and expanding the app’s reach through innovative strategies and user-centric approaches.

For a successful app, striking the right balance between these two marketing approaches is what ensures long-term success for any app business. Performance Marketing provides the necessary initial thrust, but Growth Marketing charts the course for sustained success. Both strategies should be continuously refined and integrated.

About the Author
Amish Zinzuwadia has over 10 years’ experience in the paid acquisition space and now leads the Paid UA team at Yodel Mobile, covering client strategy, team management and innovation.