The ultimate guide to performance marketing | Timothy Davis (Shopify)

Jul 28, 2024 1h 42m 29 insights Episode Page ↗
Timothy Davis, former Head of Performance Marketing at Shopify, shares tactical insights on paid growth. He covers when to invest, how to run "signs of life" tests, platform choices, common agency mistakes, and building an internal team.
Actionable Insights

1. Embrace Paid Marketing

Consider paid marketing for every company, especially paid search, as platforms increasingly prioritize paid listings over organic results. Paid search is user-driven, making it a baseline investment for nearly all businesses.

2. Focus on Data Signal

When hiring for performance marketing, prioritize candidates who can distinguish ‘signal’ from ’noise’ in data, as data analysis is more critical and harder to teach than platform mechanics. This ensures focus on relevant metrics that drive business results.

3. Forward Think, Backwards Plan

Define your ultimate long-term goals (forward thinking) and then meticulously map out the immediate, iterative steps and milestones required to achieve them (backwards planning). This strategic approach ensures progress towards ambitious objectives.

4. Test for Signs of Life

Conduct small, low-budget ‘signs of life’ tests on new platforms to identify early positive signals before scaling. If a signal is found, then build a comprehensive campaign around it, rather than immediately going full throttle.

5. Prioritize Product-Market Fit

Avoid significant paid ad investment if your product lacks market fit or operational readiness (e.g., correct currency support). Running ads without this foundation will likely lead to low conversions, wasted spend, and user annoyance.

6. Align Metrics to Goal

Focus on specific metrics that directly align with your campaign’s primary objective, such as conversions for purchase, reach for awareness, or funnel entry for consideration. Disregard metrics that are irrelevant to the campaign’s core goal to avoid noise.

7. Build Lookalike Audiences

Initiate platform experiments by uploading your existing customer base to build 1% lookalike audiences. These audiences are highly correlated to your target users and offer the strongest initial signal for potential success.

Begin your paid growth efforts with Google Search due to its user-driven nature, where users actively search for relevant keywords. Once established, expand to Meta (Facebook/Instagram) and YouTube, especially if you have video creative available.

9. Leverage Platform Partners

Consult platform representatives (Google, Meta, LinkedIn) for anonymized competitive benchmarks and industry insights. They can provide valuable data on metrics like click-through rate and CPC for your specific competitors, helping you understand your performance relative to the market.

10. Cultivate Learning Mindset

Create an organizational culture where it’s acceptable to fail in experiments, viewing every outcome as either a win or a learning opportunity. This reduces pressure and encourages continuous experimentation and improvement.

11. Optimize Ad Relevance

Continuously improve ad relevance and strength by incorporating platform suggestions, such as adding unique headlines or keywords. This directly boosts your quality score, leading to more impressions and better performance.

12. Eliminate Poor Performing Ads

Proactively identify and pause or remove ads with poor quality scores or high CPCs, as even a single underperforming ad can negatively impact overall account performance. This improves the account-level quality score and efficiency.

13. Focus on Click Share

Prioritize showing ads to the right person as often as possible, measured by click share, rather than merely maximizing overall impressions. This shifts focus from ’ego marketing’ to effective user engagement and conversion.

14. Strategic Competitor Bidding

Consider ‘coattail riding’ by bidding on competitor keywords if your product offers a similar solution. However, ensure your ad copy adheres to trademark rules to avoid violations and potential removal by platforms.

15. Use Multi-Touch Attribution

Employ a multi-touch attribution model, preferably time-decay, to credit all channels that contribute to a user’s conversion journey. This acknowledges that initial touchpoints are less impactful for conversion than later interactions.

16. Test Creative Iterations

Always test different ad copy and creative variations, even seemingly simple ones, as the most effective options may not be what you initially expect. No idea should be left on the cutting room floor; always be willing to learn what works.

17. Invest in In-House Creative

Consider hiring an in-house creative person for better brand tone matching, faster iteration, and consistent content production. In-house talent often outperforms agencies in matching brand identity and quickly generating new test ideas.

18. Implement Ops Cadence

Establish a detailed operational spreadsheet (ops cadence) outlining weekly, bi-weekly, and monthly tasks for all performance marketing activities. This ensures accountability, provides transparency to cross-functional teams, and helps prevent forgotten tasks.

19. Accelerate New Hire Impact

Onboard new team members quickly by providing clear expectations, early responsibilities, and hands-on training, aiming for impact within 30-45 days. This approach gets people up to speed faster than slow-rolling introductions and handbook reading.

20. Evaluate Hiring Needs

Use a workload calculator to track team members’ time spent on meetings, PTO, optimizations, and reporting. Hire new team members only when existing staff consistently exceed capacity after efforts to cut non-essential work and streamline processes.

21. Test Creative with Control

When testing new creative, run A/B tests with a control group (e.g., a logo-only ad or existing ad) against your new creative. This helps isolate the creative’s true impact on engagement and conversion, providing clearer insights.

22. Leverage Video Ads

Prioritize video advertising on platforms like YouTube if you have the creative resources, as video is currently performing very well when measured correctly. Ensure you have a ‘flywheel’ for consistent creative refresh.

23. Craft Emotional Creative

Develop video ads that evoke emotion, such as comedy or happiness, to create a memorable connection with users. Emotional ads are more impactful and lead to more favorable actions after viewing.

24. Consider LinkedIn for B2B

Use LinkedIn for B2B marketing, especially for higher LTV products, due to its powerful targeting capabilities (job titles, companies). However, it is more expensive, so establish a presence on Google and Meta first.

25. Defend Against Brand Bidding

Monitor for competitors bidding on your trademarked brand terms; if found, report violations to Google and analyze auction insights for genuine threats versus accidental close variants. Google will disallow trademarked names in ad copy, but misspellings can slip through.

26. Utilize In-Platform Tools

Maximize the use of native platform tools and features, as they directly influence the signals sent to the platform’s algorithms for optimization. Sending the right signal helps the platform deliver desired business results.

27. Run Incrementality Tests

For significant ad spend (over $50K/month), partner with platforms to run geo-experiments or conversion lift tests to measure the true incremental impact of campaigns. This ensures you’re not taking credit for conversions that would have happened anyway.

28. Collaborate on Ad Copy

Foster collaboration between performance marketers and creative teams for ad copy, testing all ideas. The performance marketer brings data insights, while the creative team offers fresh perspectives, leading to more effective ads.

29. Hands-On Account Management

Ensure performance marketers are actively managing accounts, making weekly, bi-weekly, and monthly adjustments directly within the ad platforms. This ‘getting shit done’ approach drives the best results by staying on top of optimizations.