The difference between growth and ad agencies

In his weekly Podcast, Taylor Holiday from the Common Thread Co. growth agency, pointed out a common misconception customers have about what growth agencies do.

Oftentimes, they go to a great agency, give them a ton of money, and expect the agency to produce a ton of mind-blowing creative that will magically transform the brand into something more culturally relevant.

But instead of a 4x or 5x magnitude of change in their ROAS, they get a 1.5x.

Is this a failure on the growth agency side?

Not necessarily.

Growth agencies do iteration. And sometimes production, but what they aren’t is a “Mad Men” style agency, whose job is to come up with an amazing story, or a ground-breaking campaign idea.

If you want those, you need to go talk to a brand or advertising agency.

Because here’s the point - if you want the 5x return, your campaigns need to connect with people in a deep, multi-faceted way. Or in Taylor’s words: “capture the zeitgeist”.

As a brief reminder, here’s what growth agencies do:

• Growth Hacking: smart, non-classical tactics to drive growth.
• Performance Marketing: data and analytics-driven marketing ROI optimization. This can include ad creative iteration (small changes to drive better results).
• Conversion Rate Optimization (CRO): website conversion rate optimization.
• Customer Acquisition and Retention: can include personalization and customer success programs.
• Marketing Automation: tools and platforms to scale things like email or social media marketing.

In other words, growth agencies will change how you do your marketing.

They won’t change what your marketing says.

Conversely, an advertisement agency does something like this.

Takeaway: growth agencies will help you market better while ad agencies will fundamentally redesign your message.