Growth or Efficiency?

April 23, 2024

Growth or Efficiency?

What Should Your Business Focus On?

In the marketing and business landscape there is the age-old conundrum of ‘Growth or Efficiency’. Understanding the difference between the two crucial aspects of performance requires different strategies with the potential to yield significant results.

Efficiency can drive more conversions for the same advertising spend or achieve the same volume for lower ad spend. Conversely, focusing on growth aims to drive a larger volume of conversions, often contributing to brand growth without considering how costly the conversions are. 

However, achieving both simultaneously can be challenging and often leads to debates within marketing teams.

The challenge lies in balancing the desire and expectations for both efficiency and growth while recognising the inherent trade-offs involved. 

The question then arises: Should your marketing team focus on growth or improving efficiency? 

The answer is not always clear-cut, as there is no one-size-fits-all approach. In this blog, we delve into this marketing dilemma, exploring its nuances, implications, and strategies for navigating the balance between efficiency and growing. 

Definition of Efficiency and Growth

Efficiency in digital marketing refers to driving the most conversion volume or revenue for every $1 of ad spend. This is often evidenced by a lower CPA, higher ROAS, or lower CPC depending on your goal. Some positives include maximising ROI on ad spend, reducing waste, and potentially leading to sustainable growth without increasing budgets. However, it may limit rapid growth potential, and reaching new audiences can become more challenging without additional investment.

Growth, on the other hand, refers to substantially growing conversion volume, often through investing in additional top-of-funnel (TOF) activities and increasing media investment significantly. Some pros include rapidly increasing brand visibility and customer base, potentially leading to higher overall revenue. However, it can significantly increase costs in the short term, potentially leading to lower ROI, and efficiency may decrease as you work to increase. 

Efficiency and Growth Trade-off

Achieving both efficiency and growth can be a delicate balancing act because each goal requires contrasting approaches. Aiming for improved efficiency often requires the same or less media investment while the volume gains won’t change significantly. This is because the goal with efficiency is often either to save budget or to achieve incremental gains in volume for the same budget.

Growing your conversion volume often requires significant increases in media investment, which might not yield immediate or proportionate returns in terms of efficiency. This is due to investing more into TOF with the focus on growing future demand, rather than converting current demand at the bottom of the funnel. In addition, efficiency measures can appease short-term goals better, while growing volume can be tougher to sell to marketing and finance teams, as it requires more media investment and time to see returns. This inherent trade-off leads to the pivotal question for marketers: Should the focus be on optimising for efficiency or aiming for growth?

So, Should You Aim for Efficiency or Growth?

The answer depends heavily on the specific goals and stage of the business. If you’re a business looking to cut costs and save budget, then focusing on efficiency is the right option for you. You could also opt for efficiency if your goal is to achieve more conversion volume for the same budget. 

On the other hand, if you want to grow your revenue and cash flow, focusing on volume growth could be the way to go. This could be through expanding your customer base, allowing for new opportunities for further expansion in new markets or product lines. 

Approach For Balancing Efficiency and Growth

Many businesses have multiple competing priorities around goals relating to both efficiency, such as driving the strongest ROI or CPA, as well as growing volume in customer base or revenue. If you’re in the same boat, there’s some good news: it is possible to achieve both. However, it can be difficult to achieve both simultaneously. Therefore, to achieve both, it can require a lot of time, patience and trust. 

To effectively achieve both over the long term it's recommended to adopt a phased approach, starting with a focus on efficiency. By beginning with efficiency you can streamline your operations, trim away any inefficient aspects from campaigns, improve your onsite conversion rate and optimise your strategies to maximise returns. 

This process allows you to establish a solid foundation—a lean and efficient marketing machine—from which you can then expand and grow your brand and volume without becoming overly inefficient.

An example of this strategy could be for the new quarter to focus on efficiency, with the goal of driving your CPA down by 20%. Your marketing activities and efforts over this quarter should align with this goal. 

The next quarter or two could then be focused on scaling volume, and outlining the additional media investment, channels and activity required to achieve more purchase volume.


In deciding whether to focus on efficiency or growth, it’s important to grasp the trade-offs involved in both approaches, as well as your business/marketing goals. 

Whether you're aiming to get more bang for your buck or looking to expand your reach, both efficiency and growth play vital roles, but each could be suitable for certain businesses more than others. 

By planning properly and finding the right approach you can find that sweet spot where efficiency and growth meet through phasing each strategy. 

There's no one-size-fits-all solution, and what works for one business might not work for another. But by understanding the nuances of efficiency and growth and learning from your experiences, you can steer your digital marketing efforts toward long-term success. 

Written by:

Kasun Dantanarayana

Performance Specialist
at Reason

Written by the team at Reason.

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