Performance marketing vs digital marketing. Most people get this wrong.

Let us clarify once and for all. Way too many people confuse “Performance marketing” with “Digital Marketing” and say that it’s simply performance-based reporting in a digital-channel world, and that’s wrong.

Digital Marketing is the all-encompassing umbrella that includes everything from social posts to display advertising, to email marketing flows, to search engine optimization (SEO), to brand building activities on sites like YouTube. The primary goal of digital marketing is presence, reach and storytelling about your brand.

On the other hand, Performance Marketing is simply a subset of Digital Marketing and is the portion of Digital Marketing which is driven by measurable actions (either click-through on ads or actual online conversions, or sales, etc.) taken by consumers. Therefore, every single penny spent on Performance Marketing must be accountable for generating a return on investment (ROI) through performance metrics (like Cost per Acquisition etc.) and so forth.

This is where most people get it wrong. They believe performance marketing is restricted to “the bottom of the sales funnel”, so they drastically cut Marketing budgets that support Brand Awareness & Brand Building and focus solely on Performance Marketing. This leads to poor performance results within three months. Why? Because Performance Marketing requires Brand Awareness to work. People don’t click on ads of companies they’ve never heard of, they click on ads from companies they’ve previously established some type of awareness/connection with.

In summary:

Performance Marketing is a function of Digital Marketing. Digital Marketing creates and develops Brand Awareness/Brand Building, and Performance Marketing leverages those Brand Awareness/Brand Building efforts to drive performance results. One does not function without the other.

So next time someone says “performance marketing is better than digital marketing,” the real answer is simple. One is the garden. The other is the harvest. To grow anything that lasts, both are essential.

For your thoughts: Can you have successful performance marketing without a strong digital marketing foundation?