The ultimate guide to performance marketing | Timothy Davis (Shopify)｜Lenny's Podcast: Product | Career

Is performance marketing just something every company should be doing?

Hot take. is for everyone. If you look at the way each platform is doing, Google, you have to scroll pretty far down to get to or an organic listing.

Meta, it's almost a pay for play now. When you take over for an agency at a company, you crush their performance within a month.

I'm curious what you find they are doing wrong.

Instead of thinking about being on top of the page and that's kind of like ego marketing.

I want to be number one. I want to be there all the time.

It's about showing to the right person as often as possible.

Any other tips for people just to experiment with the platform?

Each platform is different. The user behavior is different.

Make sure you're not too hard on yourself if it doesn't work.

It's okay to fail because we're either winning or we're learning.

Today, my guest is Timothy Davis. Timothy has led performance marketing for all of Shopify for the past two and a half years and as a consultant has helped companies like Pinterest, LinkedIn, Redfin and Eventbrite kickstart and scale the performance marketing teams.

In our conversation, we get incredibly tactical on all things performance marketing and paid growth. when to start investing, how to run signs of life test on each platform, what platforms to investigate and what platforms to bet big on, what types of companies are best suited to invest big on paid growth, whether you should invest pre-product market fit or not, what agencies often get wrong, and what to look for in your investment when you're just getting started.

Plus, what your first three hires should look like, tips for which platforms are most interesting right now, a peek, at Timothy's actual reports that he runs to judge performance if you're watching this on YouTube and so much more This episode is for anyone who's trying to figure out how to kickstart or improve their performance marketing investment.

And I guarantee you'll get something out of this that'll make your life better.

If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube.

It's the best way to avoid missing future episodes. and it helps the podcast tremendously with that.

I bring you Timothy Davis. Timothy, thank you so much for being here.

Welcome to the podcast. Yeah, thanks for having me.

Long time coming. Yeah, I'm really excited we're finally doing this.

I actually posted on Twitter for people to suggest questions for this topic, and there's just so much interest. in what we're going to be talking about, which essentially we're going to be diving deep into all things paid growth, all things performance marketing.

By the way, I have a cold for people in case you wonder why I sound a little weird, but the show must go on.

I want to start with just setting a little context for folks that aren't super familiar with performance marketing, pay growth.

When we talk about performance marketing slash paid growth, first of all, are those two terms interchangeable to you?

And second of all... What falls under the umbrella of performance marketing slash paid growth?

Paid can be... a lot of things. It can be online, it can be offline, it can also even be affiliates.

Typically, when I talk about performance marketing, it's about online only.

But you could argue it's like offline could be performing and affiliates could be performing and stuff like that.

They can be interchangeable, but I would recommend if you are talking about it to kind of specify which one you're talking about because When you do say paid, because I'm in the industry, I would just, oh, they do Google search and they do meta and they do things like that.

But if you do offline, And you just say pain.

We may be talking about things, but missing each other on two two ships passing in the night.

So I think historically, people when they have said paid growth have been fully focused on just online.

Just online. But I would argue in the last couple of years, you could definitely roll offline into that conversation as well.

Okay, so performance marketing, when someone hears that term, it's essentially marketing that you can measure the performance of.

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Hi, Christina. Yes, thank you for having me on, Lenny.

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That's oneschema.co. Is performance marketing just something every company should be doing?

Or is there certain business models where it's like, no, you're probably going to grow through other channels, mostly like SEO or sales or word of mouth.

Hot take, I would say paid is for everyone.

If you look at the way each platform is doing, Google...

Introducing AI plus with paid taking up like the first four spots.

You have to scroll pretty far down to get to an organic listing.

Meta, it's almost a pay for play now. You have to do promoted posts for people to even see your content.

I would say it does depend on the industry you're in.

If you're say leaning heavily into influencer marketing, that is still a paid component.

You may not be doing You may not be doing paid search, but that is a paid component.

But I would say at baseline, everyone should be doing paid search.

The way I usually explain it to people is paid search is user driven.

You have to type in a relevant keyword for your ad to show.

Anything else is more disruptive media. You're on meta. and you're looking at pictures of babies and cats, and then all of a sudden you see an ad for Shopify.

You're watching a YouTube video, maybe a YouTube podcast.

And then in between you get advertisements. maybe for Shopify, maybe for Pinterest, maybe for Eventbrite.

So all of that being disruptive media, will, may not make a whole lot of sense for where you are as a business, But I would say paid search being user driven, having to type in a relevant keyword for your ad to show. should pretty much be for just about everybody.

Everyone should do it. Super interesting.

There's also the most companies grow through one company. growth engine, primarily, say, word of mouth or SEO or sales or paid.

So for some companies, paid will be most of how they grow.

Like say, I always think of booking.com. and Credit Karma and just like most of their growth came from paid growth, online paid growth.

For some companies, it's just like a layer, like a small 10, 20% of their growth.

What are signs that you have the potential for paid slash performance marketing to be most of your growth, like say 70, 80 percent? it.

I always say, where are your users? You will have some data that will allow you to understand that Say right now you're doing really well on TikTok.

Some would argue that's an emerging channel right now.

Great. If that's doing really well for you, maybe you take, because that content could be used on something similar like Snap, See how that does for you.

You could also lean into your Google Analytics or whatever analytics tool you are using and see if you're already getting users from that platform.

If you're currently managing that, if you're don't have a profile on there, and obviously you don't have a presence, it would be really hard for users to find you and get there. but always look at the data that's available to you within your analytics platforms and say,

Users are already finding us here. How can we turn that knob up to 11?

And you can do that with paid because if they're already finding you through that channel, what would happen if you were to just turn it up to 11?

Is there an example of a company you worked with that's known that is an example that where you're like, oh, I see everyone's looking, finding them on, say, Google?

Let's go turn it to 11. Yeah, so there was a company I worked with a couple of years ago called Hair Story and Ipsy.

I know, very funny guy with no hair working on a company called Hairstory.

But they were doing really well from a Google Shopping standpoint.

But when I started consulting with them.

We looked at the analytics and we actually saw that they were getting a lot of people from Meta and TikTok at the time.

And TikTok was very, very new. And they didn't really know what to do with it.

So said, we'll do a small test. we can start on meta with just some Customer testimonials, let's see how that does.

We'll get interest in build a funnel, get retargeting and hopefully get conversions.

TikTok was so new at the time that it was like, we don't know what's going to work. let's just try with what is currently available then once we started doing it we started noticing hey, this doesn't make a whole lot of sense from a creative standpoint.

We were kind of missing the mark of, What we were using on meta was working, was not working on TikTok.

So you can't always just take what is currently working on one platform and apply it to another. because it is a different user experience.

It is a different mindset that the user has when they're on there.

So that was an example of where we were able to take those instances look at their data and say, they're already finding us here.

How can we turn this up a little bit? And I don't remember the numbers exactly, but it was pretty exponential.

Okay, so the core advice here so far is look for where people are coming to you from today.

And then that gives you a sign of where you should start to think about running paid ads, performance marketing on those platforms.

Yeah, and also there's a saying that my current director likes to use, which is signs of life.

You can always do a very, very small test.

You can just put a little money into a platform, see if there's a sign of life.

If there is, then you can pull back and say, okay, we have signs of life.

Now let's build a campaign around that. There's no reason to say, all right, we have a signs of life.

Let's now turn it up all the way. Do we have the right creative?

Do we have the right campaign? Do we have the right messaging for the users on this platform?

Then let's take that approach as opposed to just, hey, signs of light, great, go, run 100 miles an hour.

Make sure you're doing the right thing when you get into those platforms.

Let's follow that thread. A lot of people run little experiments on, say, TikTok and Snap and Twitter and things on LinkedIn.

And they often don't see a lot of results and it's always like, Hey, did we do it wrong?

Or is it the platform's not working? I know it's like a very difficult question. to give like here's how you do a sign of life test correctly but What are some things that you think either people do often wrong when they're trying to experiment with the platform or that you just think they should do when they're trying to look for signs of life.

The number one thing I tell people all the is use your own data, start with your own data.

So take the existing customer base you have, load that up into the platform to build lookalikes.

From there, you can do, and I'll use Meta as the example, you can do a 1%, all the way up to a 10%.

So 1% match, 2%, 3%, so on and so forth.

What I tend to do is build ad sets, one at 1%, because we know that one's going to be highly correlated to what we're looking for. then a two to four, and then a five to seven, and then an eight plus.

More times than not, the A-plus does not work.

But there have been times where it has, so it's... hey, let's do it, let's try it.

But if you also have a very limited budget, because...

Some people don't have the luxury of having an unlimited budget like we do in some of these other companies I've worked at.

Just start with the 1%. See what that sign of life is, because you already know that this is so tied to your existing customer base. if that sign of life is giving you a positive signal, uh, Now you have the information you need to build a campaign.

You need to be successful. What are these percentages referring to?

You may have mentioned it, but when you say 1%, 2%, 3%.

Yeah, yeah. So that is how closely tied they are to that user's behavior on the platform.

So they're 1% tied to what they're doing.

They're visiting similar pages or they have similar behavior on the platform.

So they're more than likely going to be tied to what that user, they're not going to be that user exactly. but they're going to be very correlated to them where 10% is pretty wide base that you're going to hit.

I see. So the smaller the percentage, the closer they are, the closer they will look like they are.

Yep. There you go. How do you know if it's the creative that is failing versus it's just like never going to work?

Is there something that tells you that's what's not working?

It's a million dollar question, to be honest with you.

Because you could look at some of the metrics that currently exist in the platform.

Click-through rate basically just tells you are the users engaged because start with the target.

You're getting the impressions are there is the target, right?

That should be your first thing. Yes, the target is correct. users that we want to see are seeing our ads, but they're not engaging with it.

That would kind of be the first thing. But the part that I think you're really trying to ask is creative versus the content.

Because sometimes, depending on the ad unit, you could have a story creative that is literally the creative kind of has to stand on its own.

Not necessarily the content that's in it, but something like an in-feed Creative has a headline, a primary, a description, and a creative.

That's where... Honestly, the only way you're going to get an answer to that outside of the data that's available to you, like click through rate, reach frequency and all those things to kind of pull in more metrics. is a focus group to understand, hey, when you saw this image with this content,

What was your result from it? Now you can build a test within the platform to do a control versus a test where say you take the creative with the same primary and the same description versus a creative that's just your logo, with the headline in the description and see what the results are.

But more times than not, you're not getting the understanding from the user of why doesn't that creative resonate with you?

And they'll give you suggestions in the focus group.

Why does that work better for you than not?

So that's a really, really hard question to answer without having those dialogue with the user to understand that.

Yeah, that makes a lot of sense. How long do you recommend these tests run for these signs of life tests?

And I like this term, by the way, I've heard this before.

Ideally in a perfect world, you're going to hear the word statistical relevance.

Mathematicians will tell you exactly what that number is, and I'm not going to pretend like a mathematician.

But a lot of times it's budget constraint.

So... There could be a VP, finance, anyone like that could just come to you and just say, You have $25,000 for this test.

You only have $5,000. you know, just get that information, get that data.

You can then also build an ops size off of that. hey guys we worked with our meta partners we worked with our google partners uh we put $1,000 behind this test.

We know that our impression share was this, our reach was this.

If we were to put $10,000 into it, this is the expected return we can get from it. based on the click-through rate, the conversion rate that we got from the tests that we ran.

Got it. So basically, you have a limited number of dollars to spend.

That'll tell you how long you could run one of these for.

Any other tips for someone that's trying to experiment with a platform early on for these signs of life tests?

So one is... try a lookalike that is like the most targeted version of the lookalike so 1% you said And then kind of incrementally grow and see like incrementally increase that percentage as you spend more.

Any other tips, I guess, for people just to experiment with the platform?

Make sure you're not too hard on yourself if it doesn't work.

A lot of times companies I've either consulted with or worked at, there was always... pressure, or there was always a need to succeed at whatever experiment we put into market.

I believe in creating an environment where it's okay to fail because we're either winning or we're learning.

And more times than not, if we put something new into a platform that we know nothing about, We're learning the bells and whistles.

We're learning the functionality of it. just know there's going to be things you're not going to understand because each platform is unique.

Each platform is different. The user behavior is different.

So give yourself some grace. Understand that this may not work.

And as long as you're learning from it, you're going to be okay.

I love that. In terms of which platforms people should explore, obviously there's Google, there's Facebook.

Instagram, what are the platforms people should seriously consider at this point?

Google, for sure. And when we say Google, let's make sure everyone understands what Google entails.

Google is YouTube. Google is Google search.

GDN, Google Display Network. There's a lot of things in Google that you can do.

I always say, if you have the creative available, You should really, really be looking at doing video because video is one of those things that I am very bullish on.

It is doing really well. when you measure it the right way.

And as long as you can get that creative and get it consistently just because you have one piece of creative.

If it's doing well, you do need to have that creative refresh, kind of that flywheel going.

Make sure you're doing Google search, again, user-driven.

YouTube and Meta and Meta contains both Facebook and Instagram.

And then based on the data available to you, if you do see users on TikTok, definitely go after those.

But if you're just kind of starting out and you're Just want to get your feet wet into something.

I would say start with Google search, then get into meta.

And if you have video available, definitely get into YouTube.

Awesome. Okay. So Google search, YouTube, Facebook, Instagram, TikTok.

What about LinkedIn? Do you see things happening there for say B2B companies?

Yeah, LinkedIn is very expensive in comparison.

So just know if you're going into LinkedIn, it's going to look almost three times more expensive than other channels. the targeting that's available on LinkedIn, knowing job titles, industries, actually targeting people at certain companies. is very powerful.

The example I always tend to use is that I worked at a company called SoftLayer.

SoftLayer was acquired by IBM because They were trying to build out their cloud portfolio, couldn't do it.

So they're like, hey, let's do the next best thing. by this company.

But when we were just SoftLayer, we were trying to get Coca-Cola. as one of our clients.

And you know those Coke freestyles where you can pick whatever drink you want and put the flavor in it?

No. Oh, man, these are great. Maybe it's a sell thing, but...

Basically, you go up to a Coke freestyle and say, I want Dr. Pepper and I want cherry flavor in it. or you want to coke zero with cherry and vanilla in it, you can do that.

It's kind of the freestyle you get to pick.

The reason they wanted it to be cloud-based is because there's a ton of drinks in there.

So you need to be able to efficiently and effectively say this store needs more sprite, or this store needs more sprite, zero. because you have your whole portfolio in this one machine.

So they want to be able to update things more readily.

And it was between us, AWS, and Microsoft. and met with the sales team and said, what do we need to do to win this?

Because it was a big ticket item for us.

Thank you. And what we found out was they had two concerns about us.

It was recency and private security. So what we did was we found out where the decision makers were.

So A, in LinkedIn, we took Anyone who works at Coca-Cola, we want you to see ads about security and recency.

Outside of that, we also geo-fenced it because you would think Coca-Cola...

Atlanta, that's where the decision maker sits, but they were actually in L.A., So in LA, we geo-fenced them and we knew that they worked at Coca-Cola.

The next time the salesperson got on the call with the team to say, hey, just wanted to check in.

He was like, hey, hey, I get it. Security is fine.

Recency is fine. Thank you. We hear you.

That was great to hear because it was something we were able to do on LinkedIn and we did it in other platforms as well. but we knew we were able to get not only to that decision maker, but everyone around that decision maker. to say hey these these guys may be the ones we need to go with Okay, so just to mirror back what you're saying, you're saying you ran ads on LinkedIn. targeting the execs at Coca-Cola, trying to influence them to overcome these barriers they had to buying to working with you guys.

Amazing. I've seen people do that on Google search, but I've never heard of that.

It makes so much sense to do on LinkedIn.

And it worked. And did they know that you did this or they're just like, oh, I just kind of changed my mind.

One of them was like, we get it. We're seeing it everywhere.

We actually tried, because at the time we didn't have an offline team, we actually tried to buy the billboards around the office as well.

But I didn't know enough at the time from an offline perspective of like the right people to talk to, how long it would take to do it.

So we were trying to pour it on hard. That's incredible.

Like I could see why LinkedIn is more expensive.

That's incredible. powerful. And is the advice then that LinkedIn makes more sense for like higher LTV? higher CV type of products?

Yeah, exactly. I would not recommend getting into LinkedIn and my LinkedIn reps may kill me for this.

I would not recommend getting into LinkedIn until you've tested Google and Meta first.

Now you could be an enterprise level company and it does make sense to start with LinkedIn for sure.

But again, Depending on your audience, I would say more times than not, it would be a Google meta discussion before going to LinkedIn.

Okay, so just generally start with Google and Meta.

Is there one or the other usually? I guess, yeah.

Which one would you start with if you had to pick one?

Yeah. Always Google search. I'm always going to say start with Google search, but it's also creative dependent.

If you don't have the right creative for Facebook, it's going to be really hard to convert because users are just going to either be turned off what you're kind of putting out there.

And then also depending on where your user base is, if they're not on Facebook, It's kind of a moot point.

But if they're browsing around on GDN or YouTube, it makes more sense to go there.

And then you said this insight about video is performing super well right now and you're recommending people use video.

And the key there is you need to be able to make videos, video ads.

Yeah, you got to make sure you have that flywheel.

And the flywheel is just people internally or some company agency that can make video apps for you.

Correct, yep. Cool. I guess, is there any advice there of just how to do that or what ads work well or anything there?

So, yeah, the thing with YouTube is I always say start with emotion.

If you can have an emotional connection with the user, is going to be way more impactful and way more powerful than anything else. to take that further.

When I say emotion, I'm talking about comedy.

I'm talking about you know um happiness.

It's not necessarily just, oh, we need an emotional connection with the brand.

It is just making sure the user feels something after seeing your ad. because then they're more times not going to remember it, which then they will take a favorable action after the fact.

That is super interesting. One last question about platforms.

Are there any other platforms you see working for people that are merging maybe that people aren't thinking about reddit or snap or x or i don't know anything along those lines When you say emerging channels, my brain kind of goes to connected TV, podcast.

VR, advertising, audio, voice search, and even AI stuff right now.

I can tell you podcasts are doing really well for the people that I know are able to measure it correctly.

Right. Connected TV is also doing really well.

You can take the if again, you're doing YouTube right now, being able to take that creative and repurpose it.

But the VR stuff and the AI stuff, that is stuff that is, I would say... very emerging right now because To be completely transparent, I haven't experimented with those things yet.

I kind of like letting other people be the guinea pig and learning from them.

And then if, hey, someone comes to me and they're like, hey, we have budget for this.

Let's go ahead and test it. Great. Let's go.

Let's see what we can learn. Awesome. Podcast ads.

I'm glad you suggested that. I'm a huge fan.

Thank you. They're working really well for a lot of our sponsors and I'm very biased, so you don't need to pay attention to me.

But I also think there's a lot of opportunity there.

Okay, let's talk about when to start investing in performance marketing slash paid growth.

So say you're like a startup. Do you have any advice for when it's time to start? signs a life test or even and then also just when is the time to scale to go like, okay, let's go big on this.

If you are a startup, Typically, whenever I consulted with them, it was, what are the goals?

What are we trying to achieve and when? Because if you're looking for something quick, page that started yesterday, because SEO takes time.

SEO, depending on the market you're getting into, if it's emerging people may not even know your product exists.

There was a product I was working on years ago that if you were traveling to a hotel and say it was a romantic getaway with you and your partner, and you wanted the hotel suite or bed, room done up with like flower petals and champagne and stuff like that, they would do it for you.

Well, they were working with someone before that was like, oh, we should totally be in paid search And if you look at the keywords that they were doing, it was like booking hotel rooms.

It's like, no, that's that's complete disconnect.

They're like, yeah, but we're trying to build awareness.

You don't want to build awareness through search. you build awareness through display media based type media.

When we, transitioned all of their money over at the time and this will age me before meta was a thing, when we transitioned everything over to GDN, That's when the company started really reaping the rewards because we were building the awareness around the product.

So it depends on what is the demand of your product and market.

If you're doing something that is similar to another product and market.

You could do competitor. I call it coattail riding.

Say you have, say, Lenny, you and I create a product that is similar to monday.com. we can go out there and just start bidding on monday.com and say, see why.

Lenny and Tim are better than monday.com and start getting some people in interested, maybe kicking the tires, starting free trials, but they also have other keywords that they can go after in market.

But if you're going after something new like hotel room, you know, flowers and I forget what keywords we were bidding on for that because it was years ago.

People weren't thinking of that. That wasn't something they were searching for.

So it just really depends on a, When do you expect results?

Because SEO can take time. And B, what is the demand in the market for your product?

Some people use paid ads to drive early growth to... bring customers to help them figure out what to build, kind of pre-product market fit.

Is that something you recommend? Is that something you advise against?

Is that a strategy that you've seen work?

Yeah, product market fit is a huge thing.

We've run into some of this at Shopify and we definitely ran into this at IBM.

So for the longest time, you know, IBM is we're a global company.

We should be everywhere. But when we started looking at the data, it was should we be everywhere?

For example, Africa, we were in the whole continent. we weren't just in say south africa or egypt or something like that And the more we dug into it, the more we realized the biggest issue wasn't necessarily that users weren't interested in our product and weren't able to and on purchasing it, it was because we didn't have a product market fit, mainly from an operation standpoint.

In Africa, there are multitudes of different types of currency.

There's the franc. There's the RAN, there's the shill.

And we were just, hey, USD, thank you. So of course they weren't converting unless they were going out of their way to make a way to convert that.

So when we took a step back and we said, okay, where do we want to start?

It was South Africa. That's really where we were trying to get quote unquote stronghold in.

So we had to make sure we had the RAND available.

Once we did that, we started doing tremendously better because we had a product market fit.

They had demand for our product and now we were able to serve them, meet them where they were.

So essentially you're saying probably not smart to run a bunch of... ads if it's not working if you don't have something people actually want yet in that product in that market Right.

Or able to convert because conversion is going to end up being really low.

No one actually cares about what you're doing. all you're going to do is really annoy the users because say in the future they are Hey, I'm still interested, but I don't want to use that product because I already tried.

It's like, no, no, you can totally use it now.

I already tried. I had a bad experience with them and some users will hold that. you accountable to that.

One bad experience and I'm just never giving you my business.

Interesting. So is that generally your advice if you're a startup, you're not feeling like you actually have product market fit yet?

Should you even experiment with and do signs of life tests?

Or should you hold off until it's like, okay, it's actually working.

Let's go. From an operations standpoint, I always want to make sure those things are tied off.

Yeah, it doesn't make sense to, again, if you have a major budget and you're trying to get awareness into a market, Great.

Yeah, you can go after a market, but just know that it's probably not going to convert very well.

Got it. So I wouldn't recommend it. Okay, great.

Awesome. Very, very clear answer. Let's talk about the mistakes that you see companies make when they're investing in performance marketing.

So we got introduced through Casey Winters at Lustrous. former podcast guest, two-time podcast guest, and asked him about you.

And he told me that When you take over for an agency at a company that you work with, you crush their performance within a month.

I'm curious what you see and find they are doing wrong that allows you to be such a hero when you come in and take over.

I think agencies have playbooks. Now, I've worked at agencies.

I did consulting for a long period of time.

It was never an approach I took. I looked at each account and each company as it's own thing.

But I think a lot of agencies just come in and they go, oh, this is like a B and C company.

And this is what we're doing. Copy paste done.

Move on. And they're also not willing to get deep, deep, deep into the weeds of stuff.

I may get a little too far into data. than some other people.

For example, like I have, ops cadence that myself and my team follow.

Within that ops cadence, we have things like finance, performance, structure, keywords, ad copy, quality score, targeting, et cetera, et cetera.

And then with the Within each of those, we have specifics.

For example, the keyword subsection is keyword granularity, brand versus non-brand, search query reports, negatives, so on and so forth.

I feel like agencies don't necessarily get into all of those things every single month. where some of those were doing weekly, some of those were doing bi-weekly and some of those we're doing monthly.

But they touch the things that they think they need to touch, they turn on automated bidding, they're doing their search query reports, and then they just kind of move on with their day because they have 50 other clients they have to get to.

Well, what about looking at your conversions?

Where are we converting? Have we tested different landing pages?

What is a better user experience that we can be getting users right now?

It's a five step process can get it to a three. partnering with like PMMs to say, hey, here's something that I think could help improve our lead to conversion, just stuff like that, that they're too busy with too many other things to focus really, really deep into those.

Typically, whenever I managed an agency in the past and I consulted, I made sure that you weren't stretched thin enough that you couldn't do those things because I'm a firm believer in hiring smart people and then getting out of their way.

But each week having one-on-ones with them just... spot-checking things, just saying, hey, I looked at this.

This doesn't look right what's going on there.

Oh yeah, I do that on this day. Okay, great.

Just making sure you're covered. Because sometimes people won't scream uncle when they should be screaming uncle because they think it's a sign of weakness.

But. Let me know when you're overwhelmed.

Maybe I have a, solution for you. Maybe there's a way I can coach you to be better at something, or we just need to hire more resources because the client portfolio you have is five.

And when we took them on, they were all at a hundred K, but now they're all spending 2 million plus.

We need to offload some of that from you because you're doing such a good job that you've scaled them up.

Let's give you three clients instead of five and hire someone to take those two.

So it sounds like basically they just don't have the time to care and spend on... all the things that they need to be doing.

And when you've helped companies, you actually go deep and you don't have a lot of You have the time to do it well.

I guess when someone's trying to find an agency...

Or someone like you, I know you don't do this much anymore.

Any advice for just like how to know if they're going to be great?

Is it just like agencies in general are probably not a good choice?

Is it hiring someone in-house? I guess what advice do you have for people that are like, oh, man, I want to avoid this? agencies are a good place to get things started.

Even when I was consulting, I would honestly, I'm a big believer in forward thinking, backwards planning.

So if I'm taking this contract on with this new client, what's the end goal for you?

If your end goal is to have this at... performing at $100 million spend.

There's no way one person can do that. So let's create mild sounds along the way of making sure we're checking in and saying, When is the right time to hire?

Whether that's a data scientist, whether that's a creative person in house or replacing me full-time.

There's no reason that you should be holding a company back If anything, you should be helping them get to that milestone and I think that's why I've been able to do so well for myself because I show that hey, I have the best interest for you and your company. as opposed to how much more money can I squeeze from you by holding onto you as a client?

I would say agency consultant is a good way to start because if you as a business owner you shouldn't have to log in.

Oh, I haven't logged into Google in like three weeks to look at stuff because...

I'm doing payroll, I'm doing HR stuff and I'm meeting with clients and I'm doing sales. start there get it to a good place create that milestone of hey when we're spending Shifty K a month.

I need to hire somebody full time to take this over and just have that conversation with your agency and your consultant.

I think more times than not, you will. have a positive reaction to that.

But if you don't, I would say that's a major red flag and probably someone you should be partnering with.

Awesome. Okay. So your advice is to get started on paid growth, buying an agency or like a small shop consultant. type person to get you started, have a conversation.

And when we reach a certain scale, We're going to hire someone internally to run this for us.

And then potentially they'll keep working with you.

Potentially they'll start things on their own.

Or is the assumption they'll start working with you?

They'll become the owner of this thing? Or is it like we may transition you out?

That's a really good point, actually. So there have been times where clients like, hey, we've reached our milestone.

I want to bring someone in. that person comes in and say they're an expert in social media.

Like, hey, I still want you to execute on Google and Bing because that is just not my bailiwick.

I'll take over the social stuff, but we do need to talk about your fee.

Maybe it does need to go down. Completely acceptable.

Let's have that discussion. Make sure we are both aligned to what that should be.

But yeah, there have been times where they're like, hey, we've reached our milestone, we got to bring someone on.

But that person that they bring on is like, actually, I see expansion in this direction. but I can't do this.

Are you willing to stay on and help me with this?

Great. If not, I'll just have to find someone else who can.

I want to talk about the team that used Build over time, but later, but specifically for this first person that you hire, what sort of person Is this person, is it like a data person?

Is it a person that's just done specific performance marketing on channel or what do you look for ideally?

I'm a big believer in, there was a book written by Nate Silver called The Signal and the Noise.

Are you familiar with it? No. So Nate Silver is the guy who created... Yeah, 537.

Yeah, yeah, yeah. And in the book, he basically...

Let me use the word art. Let me use the word art.

Detailed the art of, like, probability... statistics and applied them to like real world circumstances.

It included case studies with baseball, which, of course, I loved. elections, climate change, poker, stuff like that.

And the... I like that book, it's kind of dense, but the thing I liked the most about it was the title. and just changing the title ever so slightly to Signal Not Noise.

So typically whenever I hire people, I want to hire smart people and kind of get out of their way.

But the biggest thing I want to focus on is what is your thought process when it comes to data.

Because I can teach anyone how to do Google ads.

I can teach anyone how to do meta ads. That is not the hard part.

It is the data part. That is the hard part. because there is so much noise going on in those accounts.

They give you everything, which is great.

It's great that they give you all this information, but you can have someone that's Oh, but look at the reach, look at the frequency, look at the CPMs, look at the CPC, look at the conversion rate, look at the cost per lead, look at the cost per MQA.

I'll look at this. Hold on. That's a lot of noise you just said.

So what is the signal and what is the noise?

And let's make sure we're focusing on the right signal versus the right noise.

And that has to be a data person. because there's a lot of data in these platforms.

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That's geteppo.com slash Lenny. Everyone I talk to that's worked with you is just like Tim.

Timothy is incredible. It, working with tons of data and finding the things that matter.

Someone told me that it actually comes from your love of baseball, that you just go crazy with stats and spreadsheets of... baseball games and players and things like that.

Is there something there that you could share that is interesting?

Yeah, so I played baseball my whole life.

But when you... blow out your arm and you're as fast as a sea otter.

It's not very... conducive for you to continue chasing that dream.

But the one thing I always liked was the stats.

Even as a kid, when I would watch baseball games, On TV, it's like, what's this guy batting?

How often is he getting on base? Uh, you know, how many RBI is like, oh, this guy it's terrible average, but he has a lot of RBI.

So that means if there's a runner on base, he may not. get a hit, but he's going to get that guy in.

So you want to make sure you put him in the right spot in the batting order so on so forth i could talk about that for hours But again, that could be another thing where there's a lot of data available.

Which one should you focus on? And ultimately, what is the optimization you're gonna make to the lineup or to the where you place fielders on the field. to ensure that we're doing the right thing and becoming as efficient and effective as possible.

As far as dealing with all that data, that is just, I would say a skill I've learned over time.

Early in my career, whenever someone... It was like, oh, we have this new project.

Who wants to work on it? I'll do it. I was always just eager, you know, like a sponge.

I wanted to get in as much stuff as possible.

I did SEO for a portion of my career. I did email marketing.

I did affiliates. And then eventually I remember the first time I saw paid because again, I was doing like SEO where I was like, we're going to do this and we think it's going to work.

But we won't know for about six months. Someone showed me a paid platform.

I was like, wait, you know, this is the keyword you're betting on.

This is how many times the ad was shown, how many people clicked on it, how many... this is amazing.

I need to get more into this. And that's just kind of where it started.

And when I usually hire people and say, We go through the interview process.

I make sure that there can be data focused.

Really, it's just ensuring that we're focusing on that signal and not the noise.

And one of the interview questions I usually ask is like, I throw a bunch of data points at them and then say, out of all that, what would you do to optimize the account?

And more times than not, they're just overwhelmed. with the people that I like or like, well, what was the purpose of the camp?

What's the purpose of the campaign? The purpose of the campaign is to drive conversions.

Okay, well, I would focus here, like focus on how many clicks we're getting?

And how many conversions? Are we targeting the right people?

Because who cares about how many impressions you're getting?

Who cares about the reach? Who cares about the frequency?

If the goal of the campaign is to get conversions, that's what we should be doing.

If it was awareness, it's how many people saw it.

If it was a consideration, how many people were getting into the funnel and are considering us as from a white paper download or a demo? as the product solution that they're looking for.

That's a great segue to the next question I wanted to ask you, which is just Metrics that you love to focus on, pay attention to when you're helping people with their paid ads.

A lot of people think about CAC. A lot of people think about return on ad spend.

LTV to CAC. I know it really depends on the goals, as you said, and But I guess, is there anything that you find is like, forget these metrics.

These are kind of the bucket that you focus on the most.

Yeah, so for those metrics, I would say I really hope you have... a great rev finance partner shout out to courtney and nick That fantastic finance partners I have at Shopify.

Well, Nick's not there anymore. sad cry emoji, but Courtney, you know, we're able to collaborate on those things, understand this is the investment we're putting in.

This is the expected return. This is the CAC that we can invest basically put a guardrail on, you have to be within.

So hopefully you have a really strong financial partner you can use for those.

But as far as the stuff that I focus on, there are things that whenever We're looking at accounts we'll kind of hyper focus on, for example, Google will give you information about what is going on with your ad copy and how to ultimately show as often as possible.

What I'm showing here is a visual of Brand versus non-brand when it comes to expected click-through rate, landing page experience and ad relevance.

The reason I like building reports like this is because it will kind of show you where your hole in the ship is.

If you look on the left side, expected click-through rate, 75% above average.

Landing page experience, 84% above average.

Then you get down to ad relevance. A lot more colors than there are green.

Only 35% above average. So for your brand ad copy, the clear direction you have from the data that's available to you is jump into the account, and make it more relevant. that will improve your ad strength.

And once you improve your ad strength, That will improve your quality score.

And more times than... I think it's... 12% increase in the number of impressions you can get. if you increase from a below average to an above average. for the data that's available here.

And then on the non-brand side, clear expected click-through rate, you really need to be working on.

That data is also available here. that you can kind of see I put in red.

The one for brand, your quality score being at a nine, but your average CPC is $8.

That is very interesting because it should be the lower your CPC is, I mean, the higher your CPC is the lower your CPC should be.

So that is an investigation that it's like, Hey, here's a signal.

Let's go do a deep dive. So there's further reports that you can look at.

Looking at the ad strength again, average, excellent, good or poor. you can see clearly on the non-brand side, doing really well.

They're doing really well here. Most of their ads, 46 of their ads are excellent and a bulk of their spend is going there.

But if we look on the brand side, you have one ad, one ad. that you could go in and just click pause on that is a pour.

And look at that CPC $7. So just turning that ad off by itself, not only will, I'm a firm believer in that there's a, an account level quality score, not just necessarily a keyword or an ad quality score.

So just turning this one off and removing it from the account, this one ad could dramatically improve your performance.

And then Google actually tells you what you need to do to increase those strengths.

So this report is ultimately powered by this one.

So for your ad strength improvements, they'll tell you, Try adding a few more unique headlines or unpinning some of the ad sets.

Try including more keywords in your descriptions or your headlines.

So they're actually giving you this information, but more times than not, I just feel like people are just missing this and just not taking action on it.

So definitely some stuff available within the account that will help you focus on that signal. versus the noise that you could be just getting from the clicks, the impressions and all those things that are available to you.

That was amazing. For folks not watching on YouTube, you pulled up actual reports from, I think, Imagine Pass clients.

Is that what the... The data was from, okay, so actual reports from past clients. of how you evaluate, and this is Google Ads, basically, Google Ads data.

Incredible. Okay. And so within those reports, you had...

Poor, excellent. How do you determine when something is going great?

Is that something you set like if it's above this threshold?

Is that a benchmark you have or is that Google telling you this is poor?

Yeah, so that's Google telling you. There are some times where you will work really, really hard. to take that poor to an average, that average to an excellent.

And there's just not a whole lot you can do sometimes. kind of is what it is but I would argue more times than not people are not doing those things to improve their ad strength.

So just if you have the change, history available in every account and meta in Google.

If people are doing the test to try and improve and get better, great.

You have the right people working. But if not, that's a clear indication that there's definitely room for improvement.

Something that someone asked on Twitter is for benchmarks around any of the stuff.

Like, how do you know when your CPC is good?

I guess you just look at Google telling you it's excellent versus poor.

How do you know if your conversion rate is good?

How do you know if you're... CAC is good.

Yeah, every industry and every company is going to be different.

Healthcare, lawyers, those are some of the highest cost and average CPCs I've seen.

If I was to compare that industry, say to a B2B industry, it would not be very good at all.

Honestly, what I would tell the user to do Every single platform has partners available.

More times than not, they're kind of like salespeople.

I actually really like the partners. that we have at Shopify, because I do feel that they are partners.

Shout out to Francisco at Google and Sammy and Alana at Meta. and Nick and Sam and Brian at LinkedIn. in case they all hear this, but I think they're really great partners and they will give you that information.

They will actually say, If you give me your the five people you consider to be your top competitors, I will tell you if you are above or below. a certain threshold.

Now they can't tell you CAC because they would have to have transparency into like conversions.

But click-through rate, conversion rate, cost. per click, things like that, they will give you that information because They will anonymize it, so you won't know who is who.

Like if you say, my competitor is monday.com, They won't say monday.com has a click-through rate of 5%.

They won't tell you that, but they will tell you of the competitors you gave us.

And we added three more in just to you know, say, hey, we found some people and also to where if you only give them two, you can be like, oh, it's one or the other.

They'll give you that information because they want you to succeed.

Because if you succeed, you spend more money on their platform.

If you find out your average CPC is really high, take the actions that are in the account that tell you what you can do to lower it, But if you find out that you have a lower CPC, you're like, oh, great.

I thought that was... worse and then you can communicate that internally to your team and say, hey, our average CPCs may seem high, but in reality, we got with our partners and we are, you know, on par with the industry.

Got it. So the advice is don't seek... generic benchmarks for any of these metrics, you can talk to your rep at Google, Facebook, LinkedIn, et cetera.

And they will give you essentially the great summary.

Yes. Yes. Amazing. Okay, going back to the report you just showed, is that a report you developed custom that gives you, like, here's the most important stuff to pay attention to?

Or is it basically an export from Google Ad Manager and...

So these are all exports so that this is just the visualization of the data that's available.

So this all data is available in every account.

This is data available in the account. This is data available in the account.

Now, in saying that, There are more reports that we get into like impression sharing frequency and This is something I tend to look at that not a lot of other people do.

It's not about showing as often as possible because that's what impression share tells you.

And that's kind of like ego marketing. I want to be number one.

I want to be there all the time. It's about showing to the right person as often as possible.

Instead of thinking about being on top of the page, you should think about serving the right user, which can be measured with our click share.

And then Google will put us on top of the page, which we can see through our top impression share.

That's what this whole visualization is here for, where I feel like a lot of people don't do this type of visualization.

And this can be done by leveraging all the user data available in Google, such as you know, demographics, locations, affinity audiences, in market audiences, testing different bid strategies and more.

So the data is readily available, but it's just making the visualization a little bit more digestible.

The reason that I actually have two here to show is because this is an example of when I was working on an account back in 2023, where we started making some changes and you can see that clearly our impression share you know, I would say was baseline.

You know, it didn't really change too much, but look at our click share going up.

Because now again, we're talking more to the right people. not necessarily just everyone, generic people, versus this campaign that was, this was the test and this was the control.

And you can clearly see that We were talking to a lot of people, but no one cared about what we were talking about.

So this was an easy test to call and just say, this one's performing a lot better.

And then verifying the other metrics to look at conversion rate, number of conversions, stuff like that.

This one was the clear winner, so we went in this direction.

This is super cool. I love that you're showing this.

And again, plug for YouTube to actually see the charts you're talking about.

I see one more slide on this deck. I'm curious what's there.

Yeah, so this one, I'm hoping you have show notes. that we can give a shout out to somebody.

Yep, there's a website called PPC Hero. What I usually tell people is terrible name, great content.

The... actual website used to be a little bit more cartoonish with like superheroes on it but now it's you know they've refined it But the writer there, his name is Jacob Brown.

This is what he calls the true competition metric.

And again, this is why I highly recommend we give people the link to the article because this does get a little dense.

So what he does is that he creates four new metrics. with the auction insights that are available.

And Two of those metrics are position above rate when we show an amount of times they show and we don't. added together and it will show how often a competitor ranks above you. and all auctions you are available for.

Using this type of lens is an effective way to identify genuine threats.

Not that just this data can be used to gain comprehensive insights like determining your position and impression share. by creating a baseline that you can see how this data changes over time through different bid strategies keyword and copy optimizations and more. is a very, very powerful one because I do know a lot of people are always concerned about What are my competitors doing?

How are they doing it? Why are they doing it?

And with all the smart bidding currently available, Back in my day, it was all manual bids.

So you could change the bid ever so slightly and then be like, oh, now my competitor is showing above me.

And this is even before Google. gave us Auction Insights data.

This is now available to us in the platform. using this report will actually identify a true threat as opposed to making an assumption based on personalization that maybe you're seeing when you Google a keyword, or using a tool like semrush that ultimately is uh saying oh this This person's appearing above you.

Well, let's run this report and see if it's a genuine threat as opposed to just maybe ego mark.

Super cool. And this comes from PPC hero is what you're saying?

Yeah. Cool. We'll definitely link to that.

There are neither tools or workflows that you find really helpful in analyzing this endless amount of data?

Please, audience, if you are using AI in this way, Let me know, because a lot of the stuff I do is can be a little manual and can be a little time consuming.

If they've found ways to automate through AI, that where I can provide the information that isn't sensitive, that they will you know, make it a lot cleaner and a lot more digestible, let me know.

But a lot of the things I have templates that you can load the data into and it will just automatically give you the result from it.

But yeah, right now it is a little manual, but if there's a way to automate this through AI, please users contact me on LinkedIn and let me know.

Sounds like a startup opportunity right there.

Yeah. Sweet. Okay, let's move in a slightly different direction.

Attribution. What a sexy... Exciting topic.

So attribution, basically, it's how do you assign credit to a channel and to a campaign? uh so that you know where growth is coming from what's working what's the state of attribution today what do you find is is helpful.

How do people do attribution well in today's world?

Yeah, I'm a big... believer and proponent and multi-touch, I fall into the camp of more time decay.

Historically, the research I've done, Users tend to forget very quickly where they first found your brand.

Yes, you should get credit because this is the first time they saw your brand or the first time they interacted with it.

For sure, let's give you some credit for that, but definitely not the reason that they ultimately converted.

Linear is fine as well. But, you know, Overall, I do think attribution by itself is biased.

It does not answer the question of whether the person clicking on or seeing an ad would have converted anyways. even in the absence of that ad.

This is why numerous companies like Netflix, and eBay have done studies to get an understanding of the incrementality of paid advertising campaigns. whether that's conducting GOX or conversion lift test. and important slices of the marketing channel.

I know eBay was very popular when they did that experiment.

I think it was like 2012. And I'll have a link for you for that as well, where they ultimately decided to cut almost all of their brand spend. because they found that users were already going to find them. through organic anyway, so they were just kind of throwing money out the window.

And it was really hard for competitors to get their ads at the top of the page because their quality scores were so low.

Okay, so multi-touch is the way you like to think about it.

Basically give credits to... all of the channels that you detected the user saw your add-on and less credit if it was further back in time.

Right. Yep. And then in terms of tooling, is there tools you love?

Is it stuff you build in-house generally?

How do people go about doing this sort of stuff?

Yeah, I don't know if I want to say I have been fortunate or not.

But most of the companies I've worked with, like the The big companies of the world, the Pinterest, the...

Shopify is the IBMs of the world tend to build things in house.

So from a A third-party tool, unfortunately, I don't have a whole lot of. go to's for that.

So again, either that's a I've been fortunate or I've been sheltered.

And then are there tools that you see people use or is it just like really nothing amazing out there?

None that I've seen that's like, oh wow, that's amazing.

I will always say, make sure you're trying to leverage the in platform tools. because the biggest thing with performance marketing is the signal you're sending the platform.

Because if you are telling the platform, oh, I want to get more of the users that are doing this action, it's gonna do a really good job of giving you that.

But if that action doesn't equal business results, You're not helping yourself at the end of the day.

You're giving it, again, a lot of noise instead of the right signal.

So, uh, try and leverage the end platform tools, or if there is a tool you're using, make sure it does, you know, allow third-party integration through the Google meta TikToks of the world.

Then let's talk about incrementality. You mentioned this idea of How do you know if the money you spent led to incremental growth that wouldn't have happened if you didn't run? run that ad.

Is there any advice there or anything you've seen about just like how to think about incrementality correctly and not just give yourself all this credit for stuff that would have in any way.

Yeah. I mean, there are many ways to judge the effectiveness of growth overall, like some of the stuff if we talked about before brand metrics, awareness, recall, things along those lines.

I know some companies look at leading indicators like visits and clicks. or tribute which of the efforts are linked to or perceived drivers of actions like leads, conversions to prospect, prospect to scale.

But really, the results should be coming from either that geo X or geo experiment or conversion lift.

The results of those experiments should ultimately fuel the plans for what we call IEF incrementality adjusted factor. and will allow you to be more precise and how efficient each channel is. ideally by region.

Sometimes you just have a holistic of like, this is how meta is.

This is how YouTube is. But if you don't have it by region, don't fret.

It's fine. Just have it by platform. And what does that look in practice?

When you're running a conversion lift test, you intentionally do not show your ad to some users when you win an auction and instead Google shows the next bidder's ad. this is your control group and adds up to some opportunity costs that is estimated in terms of impression share per percentage as well as spend holdback, spend holdback is like how much money you will not spend because of this test.

And all of the platforms are willing to partner with you on this because Facebook knows this, LinkedIn knows this, all of them know that they are very visually based. creative assets that are not getting as much credit as they deserve.

So if you go to any of them, you if say you don't have a dedicated rep, you can call and And if you ask for this more times than not, they are willing to partner with you.

And saying that if you're not spending enough, they probably will not. help you with this because there are certain spend thresholds you do need to meet. but I would say at least start there.

And also if you're not spending more than I would say 50K a month in the platform.

Doing this is going to be a lot more work then you're going to get result from.

You're just not going to have enough signal there.

So basically, don't worry about running criminality tests when you're just... Yeah, when you're starting out.

Got it. And okay. And so basically to understand actual incrementality, every platform has a way for you to actually test it. on the platform and the team there can help you run it.

Yep. Awesome. Okay. Let's go back to talking about team structure and how to kind of build your own performance marketing team.

So we talked about the first person that you hire and the advice there was someone that's very, understands how to find signal in noise.

So there's that one person and you, your advice there was maybe around like 50 K.

Was that like an actual threshold they usually recommend?

Or is that just like an example? Every business is slightly different.

I mean, if they're well-funded, 50K may not. the threshold may be higher, but yeah, everyone's different.

50K may be Like if somebody said, if you were to just say, hey, give me a number, I would say 50K. to start having those conversations.

Because if you're at 50K, say for the month of June, great.

It's going to take us three months to hire someone anyway.

So at least start the conversations now.

Awesome. Okay. What are like the first three to five hires look like generally that you recommend? for scaling internally from its marketing.

So the first thing, like we said, someone data driven that can get into the platforms.

The next is going to be creative. Because I need those two now working hand in hand. making sure the creative is matching the tone and also the performance that we're trying to achieve. as a business.

And then third would be a dedicated data scientist. a fully dedicated person because they can help you with things like the incrementality testing.

They can help create reports that will ultimately make everyone's lives better.

They will be able to build analyses that you will not as a generalist will not be able to do yourself.

You know, there's a saying of like, I'm not a data scientist, but I like to play one online. because what they do, they ultimately make us look really good.

Because we're ultimately the ones reporting on the performance of it, but they were the ones that helped build that environment and build all those things for In terms of the creative person, is that like a...

Graphic designer? Is it like a marketing person?

What's like the actual skill set there? It would be more... graphic design slash branding.

The reason for that is because if you have a good marketing mix, you're going to have If we keep it to a three step funnel of awareness, consideration, purchase, you're going to need to build some brand equity in a specific direction. you're going to need to make sure you're communicating value which now you're not being as creative you are being more directional And then ultimately the purchase is like, hey, click here, convert now.

So you do want to give them the ability to still be creative.

Hey, I hired you because you have a good creative eye and you're good at what you do, but now we need to focus on getting that person to convert.

So you give them a little free reign to be creative, but then you also need them to be able to execute against that creative.

You need to get those users. convert. And they're also writing the copy I imagine for like the Google ads.

I usually say that should be collaborative.

The performance marketers should be able to write most of the ads, but I can't tell you how many times in my career where I've written an ad and I'm like, this is the greatest ad ever written known to man.

People will write stories about this ad.

It is amazing. And it flops. Because I'm not the target audience more times than not.

So... I think it should be collaborative and no idea should be left on the cutting room floor because Perfect example.

I was working with ADT, you know, the security company.

We wrote the most perfect ad when Google ads only allowed a headline and two descriptions of 35 and 35?

We got every single value prop in there.

Somehow it was amazing. And the ad that it was going against was dollar sign, zero setup fee.

Dollar sign, zero, install fee. That ad won.

It was like, that is, no. It barely uses any of the characters.

It tells you almost nothing, It won. Had more conversions, a higher click-through rate.

So we took that and we applied that with the value props and it did better.

So It should never be like, unless the idea is don't buy our product, which hopefully someone is not writing that ad copy, it shouldn't be left on the cutting room floor. always tested, always be willing to learn what works, what doesn't.

For this first hire, what's like the title of this person usually in your experience?

Lately, it's been growth marketing specialist, growth marketing manager. because they're going to wear multiple hats. any startup that you're at, you're going to be asked one day to hey, I want you to do performance ads.

And then tomorrow it's like, hey, I need you to help me build out this spreadsheet for a spec sheet that you have no idea what you're doing.

So you're always going to wear multiple hats.

So just having a general title like that to start out with.

And then if that person matures into a role, you can make them more of a specialist.

Or if they start showing signs of like, Hey, I really like doing the social stuff and we've scaled enough.

Okay, let me hire a paid search person. So yeah, I always start with a general.

And then as the team grows, we get more into specialties.

So like growth marketing person. It's kind of like the broad umbrella.

And then are these people sitting in Google Ad Manager and... meta ads and just like running the ads manually.

I'm a firm believer at Shopify, we call it GSD, getting shit done.

I'm a firm believer in getting shit done.

You should be in the account, like I mentioned earlier, with that ops cadence.

We have stuff we need to be doing weekly, biweekly, monthly.

The bigger the company gets, the 10 you wind up in more and more meetings. talking about the things you want to do and how you're going to do it and stuff like that.

But keeping those people kind of sheltered away from that and focused on those things are going to drive the best. results for you, you possibly can get.

And that means hands on keyboards, in the ads manager, tweaking things, setting up a calendar.

I'm a firm believer in setting up a calendar. we did this test, we started this test on this day, That means this test will end on a month from now. put a notification so you have a cool down period and you report out to the org what you did, how you did it, why you did it. and then the results from it.

And then, all right, what we learned from this, is this and we will be applying that to our next test and this is how.

So yeah, hands on keyboards, doing all of those things.

So again, hiring those smart people and just getting out of their way.

I love that. In terms of how this... team grows.

You mentioned when we were chatting that you wait for someone to cry uncle. to hire more and to add to the team to kind of avoid bloat.

Talk about that. Unfortunately, we've seen a lot in the news lately with a lot of tech companies letting go. of some really talented people.

And that is, I feel like just created bloated organizations.

We, every month, my current manager, Dean, created this calculator that we look at that says, how much time are you spending in meetings?

If you have any PTO coming up, put that in there. optimizations, reporting, stuff like that to basically add up to how many days are in the quarter.

Because every quarter, well, not every quarter, but most quarters you'll have vacation or you'll have say, what we call a Shopify burst, where we meet in real life to... you know, get you done in real life as opposed to remotely, you know, put all that in there.

And then what does the number equate to? oh, we're in the red right now for these two to five people.

How many quarters has it been that way? Okay, it's only this quarter.

This quarter we have a summit coming up or we have a burst coming up or We have a lot of travel because we're meeting with partners. so on and so forth.

So maybe this is an isolated thing. Let's go ahead and wait till next quarter.

All right, next quarter, it's red again.

All right, now maybe we need to start having the conversation of what this new hire will take over, what they will be responsible for, and how much work they'll be taking on and doing to replace some of this red that is going on and if it equates to a full head, great.

We can move forward. We've made our business case.

But sometimes it doesn't. Sometimes we're just red and we need to do a better job of making sure, hey, we need to step out of these meetings.

These meetings are sucking out our time and we don't need to be a part of it. or this launch, we don't need to be a part of, we just need to be consulted on it.

We don't need to be in every single meeting every single time or every single communication.

So just making sure we're looking at the right things before we decide to hire someone and making sure that we have stuff for them to do.

And red means they have more work. Yeah, more days than there are in the quarter.

And so they basically estimate here's how much, how many days I need to do the things I've committed to for the quarter.

And then it's like, how many actual days do you have this quarter? yep that is super cool and so step one is okay if you're in the red let's cut some stuff and then if they're still in the red and you've got stuff, then okay, we need to start hiring.

That is very cool. Is that just a Shopify thing or is that something you do on your team?

I've done stuff like that at other companies before, but kind of bringing it forward again, I don't want to take the credit for it.

Dean was kind of the one that brought it back up.

It was like, Oh yeah, I used to do this.

I don't know why I stopped doing it. So it's definitely something I've used at other companies for sure.

That is super cool. You mentioned this ops cadence.

Is that something you can describe just like what this cadence looks like of how you run?

Yeah, so I love me a spreadsheet. So it's just a spreadsheet.

And visually, I'll do my best to describe it.

Let's say column A has those buckets I was talking about, like a finance, performance, structure, keyword, so on and so forth.

And then within those buckets, or let's call those, everyone loves rocks and pebbles right now.

So that's your big rock. Your big rock is keywords.

Then within that, you have pebbles, keyword granularity, Brand versus non-brand, search query reports, negatives, so on and so forth.

And then within that, we say how often we're doing it.

Are we doing it weekly, biweekly, monthly?

And then that allows us to, if anyone in the organization is like, hey, how often are you guys updating ad copy?

Easy answer. How often are you guys doing search query reports?

Easy answer. And it allows us to make sure we hold ourselves accountable to those things because a lot of times we have a lot we're doing.

We're working in Google. We're working in meta.

We're working in YouTube. you could easily forget, oh, I didn't do that. ah, I got to make sure I do that again.

So it's a way to hold yourself accountable, but it's also a way for me as... a manager to go in and kind of spot check that and make sure that they're doing the things that that need to be done in the account.

In the core of this, essentially, there's a spreadsheet that everyone aligns on of here's when and how often we do certain activity. to operate this performance marketing machine they've built.

Yep. Awesome. And it's it's both internally so that everyone knows and then also when people ask, Okay, when are you going to do this?

Okay, here. Here's the date. Yeah. Yeah, so if a cross-functional team or partner wants to know, Easy answer.

We got it for you right here. Here's our whole ops cadence.

In terms of the team, something else folks told me about you is that you're very hardcore about training new people that you hire.

What does that mean? People mean by that?

Yeah, there's a book called, I think it's The First 90 Days.

In it, it actually has a graph that shows when the person starts having an impact and how many days it's been.

And more times than not, it takes about we've all heard it 90 days for someone to have impact.

I want to try and make that 45 days, if not 30.

Most of the time, it has to do with... learning the culture, learning the people, understanding.

Yes, you've done paid before at this other job, but this is how we do it here.

That's where the ops cadence really comes in handy.

It's like, here's how often we do it here.

I understand maybe you did it monthly there, but we do it here biweekly.

I understand you used to do it biweekly.

We do it weekly. And this is how. And also... giving them responsibility early on for something.

For example, Kat on my team was hired eight-ish months ago. she was thrown into the fire very quickly.

She was like, hey, we have this campaign coming up called Additions.

Here's everything we did last editions. This is the results.

These are your responsibilities. These are the expectations.

Go. Go forth and conquer. As you come along, there may be something that doesn't make sense.

I'm here by all means to ask questions, but. what I've noticed is twofold.

One, when you're clear, and what is expected of them.

Like you are expected to do this when, and you already know how to do it. great, and or also in one-on-ones, I'll just open up the account and say, hey, this is how I do it.

Let me show you the way I'm doing it and how quick it is for me.

And you can learn, even though we're remote, I'm showing you as if you're sitting right over my shoulder or we're face to face.

This is how I do it. So if you're doing something different, maybe you know, one plus one is two, three minus one is two, and that's fine.

We both got to the same answer, but if you're doing like nine times five minus two times 12 divided by 15.

No, we can simplify this. So making sure that they're efficient and effective with their time, they're focusing on that signal versus that noise, and giving them responsibility early on to really take ownership of something you can see that people are a lot more quicker to pick up things and start getting that flywheel going of, hey, I want to have impact as soon as possible versus Oh, hey, go read this handbook, week one.

Week two, let me introduce you to the team. week three, it's like slow rolling that we can speed this up, guys, we can get people up to speed and making impact a lot sooner.

And also, don't expect them to be perfect.

You can't expect people to be perfect right out the gate.

I can't remember every little thing I need to tell you. there may be things I can learn from you.

I can't tell you how many times I'm still learning from people around me. that's great I didn't even think of that or I haven't tried that I should totally do that So just know that they're not going to be perfect out of the gate, but giving them... clear direction and expectations will get them where they need to be.

I could see why your team is so effective and so successful.

This all makes a lot of sense. You mind if I do a rapid fire set of questions that people asked on Twitter about very specific stuff?

Yeah, by all means. Okay. ATT. there was like a huge change to the way cookies and attribution and tracking worked online.

And it felt like paid ads kind of like, oh, shit, that's not going to work anymore.

It's over. Facebook is dead. Clearly, that hasn't happened.

At this point, just what is the impact that ATP has had on paid ads and performance marketing?

We were just talking about this. the other day because we have full transparency.

We have people fully dedicated to mobile on the team.

And I had reached out to Sasha, who's on the team and said, Hey, What are we doing with ATT?

What are we doing? Scan all those things because has any of our tactics really changed because of say low opt-in rates.

And kind of the direct question, I mean the direct answer I got from her was As long as we can use scan to provide attribution and measurement for iOS, we're fine.

It's like, okay, that's very straightforward.

I appreciate it. So as long as you're doing those things, you should be okay.

Amazing. That's great. So basically the show goes on, things change, but people find ways to work around it.

Okay, creatives. How impactful are creative in the performance of... ads generally like is that like holy shit people are way under estimating the power of a creative?

Or is it like, okay, it's like a fringe impact?

Way underestimating the power of creative.

The... The best example I can give, do you remember Dollar Shave Club?

Absolutely. Their video. All right. There you go.

Do you remember it? That was creative. Now, the person buying it may have done a really good job of just targeting males.

But I would argue girlfriends at the time... probably would have been aware of it as well.

Uh, I think really good creative should be doing a really good job of telling a story.

And if it does that, again, going back to what we talked about at the very beginning, if you get that emotion with users, whether that's pulling at the heartstrings or comedy. it's going to have a lasting impact.

Okay. Chuck on Twitter asks, when someone steals your traffic, say in Google search results and buying up keywords around your companies, what should you do?

Any advice? Yeah, so that actually goes back to the visual that we showed and I'll pull it back up as I'm talking through it.

The biggest thing is just know that Anyone can do that.

You can do it too. Like if you are ultimately concerned about it, but yeah, a lot of times competitors could be doing it on accident.

And what I mean by accident is within Google, if you're bidding on keywords, Google will do what's called a close variant.

If you were to do, say, e-commerce solution, I bet you Shopify shows up as a close variant at some point or Square or anyone like that.

So they could just be mismanaging their account first and foremost.

Don't give them that much credit. that they're doing this maliciously or even doing it with intent.

But if you do pull this, and again, it will be in the show notes.

If you do pull this report and you do notice that there is a clear threat that's going on here, First things first, let's make sure that they're not doing anything egregious like saying, Lenny and Tim are better than monday.com.

You cannot be if the Brand is trademarked within Google.

They cannot use your name within the ad copy.

Google more times than not will disallow it.

But they could misspell it. Like, I can't tell you how many times I've seen Shopify spelled with two I's because...

Google isn't catching it. But we can always put in a claim to say, hey, Google, please remove this.

But if we do run this, you can kind of see that the orange uh line here and for those that are just listening Orange Line is rather consistent over time.

There is a two-week period where it dips, but it does come back up.

There's another line that at the beginning of this visual, green is actually above orange.

And if you look at the green one over time, it almost disappears.

So the reason I would say make sure you're looking at this report And it's not just ego marketing.

It could be an error. The issue could be the green one specifically could have been getting a close variant.

They identified it. They removed it. oh, wait, a couple of weeks later, we didn't fully remove it.

Now let's remove it completely. And now they're almost gone completely.

So make sure you're looking at the data and reacting to consistent competitor conquesting versus something that could just be an accident or users not knowing what they're doing.

Amazing. And this is PPC Hero again, right?

PPChero.com or whatever. Yes. Okay, cool.

We'll share it. We'll share it. Yeah, we'll link to it in the show notes.

Okay, last question, AI. You mentioned AI.

You're looking for AI tools to help you with your workflows and analyze data, I guess, is there anything you've seen AI impact in the work of paid growth and performance marketing?

Or is it like in the future might? other than obviously the algorithms on the platforms.

I remember having this conversation couple of months ago.

AI was like, couldn't get away from it, right?

It was everywhere. And what we were doing was leadership on no and all of our You know, quarterly planning, what are we doing about AI?

How are we using AI? What are we doing that's different?

What we did was I went to, as always, I go to the partners and I say, hey, what are we doing about this?

And Francisco at Google actually, he made a really good point.

You guys have been using AI for years now.

Smart bidding is AI. All of the recommendations within Google Ads is AI. ad copy recommendations is AI.

And that's always been in the platform. So we've always... use those things.

So it was kind of like, let's reset the conversation of hey, this has been here, we have been using it, this is how we've been using it, Moving forward, these are some of the things we think we'll start doing.

I do think it's having a huge impact from a content standpoint and a creative standpoint.

Now if those two kind of converge together, you kind of have a perfect storm, right? but it's not overly...

It is something that I keep a relative close eye on.

But like I said earlier, hopefully some of your users can share more information with me.

But it's not something that I would say is overly impactful yet.

But I could see how it could be used maliciously if you can do API connections and things along those lines for sure.

Wait, what do you mean by that? Again, Google will disallow certain things, but it takes time.

Sometimes, like if the term is copyrighted in Google for ad copy, it will disallow it immediately.

But say they need to do a check. You'll see a lot of times under review. or pending in the account.

But you'll also see impressions. potentially attached to that.

It's because Google's like, oh, we'll serve a little bit of it, and then if it's malicious, we'll pull it back.

I could see a way that somebody could automate AI to where it's like always updating it to where it's like, oh, let's just get a little drip here, a little drip here, a little drip here.

And that little drip equates to a lot. But that's something AI could help with.

A human doing that would just take forever and be a total waste of Got it.

Just run tons of ads. Just keep trying, trying, trying, trying stuff.

Flip through the cracks. You mentioned creative.

It actually came back to a question I forgot to ask.

So you start with this, going back to the team that you hired to run this sort of stuff.

You hire this one person, growth marketer, specialist type of person.

The next hire is a creative. What's a sign that it's time to hire the creative person?

Is there anything there? Is it just like we have budget?

And this is working or is there anything else of like, okay, this is a good, good time.

Yeah, if you're using a creative agency and they're getting you everything you want and you're happy with it, then it may not make sense to hire a creative.

But more times than not, what I've noticed from creative independents tend to do better than like an agency.

The biggest difference I see is that matching the right tone, matching the right creative look and feel that you're going for is accomplished way better in-house. and also coming up with new ideas that you can test quickly and iterate on versus We only have so many hours with the agency this month or we only have so much budget we can spend with them where if you have that person in-house fully dedicated to the product itself You'll never run into those caps.

It feels like if anywhere, that scenario AI is going to empower that initial hire to do more creative on their own.

Yeah. Yeah. And that's not always the best way to go.

Uh, I mean, I've seen some ads in there where it's like, oh yeah, they're being scrappy.

I see what they're doing. But to your point, maybe that's where AI kind of bridges the gap, because I can't tell you how many times in the past It's like, guys, we've got to be able to do retargeting, but we have no creative to do.

Google has the... dynamic ad builder. And they've had it for, I feel like years now.

And that was just like, give us a couple of images and we will make a display ad for you. that should perform because we're testing many different iterations of it.

Meta's probably going to come along with something as well that it's like, you know, give us a picture of your product, and we'll put different backgrounds on it and test what works and what doesn't things along those lines.

That makes so much sense. Timothy, we've covered so much ground.

This is everything I was hoping it would be.

Before we get to our very exciting lightning round, is there anything else that you think would be... important, valuable for listeners when they're trying to do this stuff on their own, any other nuggets left that we haven't already covered.

Yeah, I said it at one point, but I'll reiterate it.

I'm always forward thinking, backwards planning.

Just as you're going through it, like where do you want to be?

And ultimately, how do you think you're going to get there?

Because if Say your goal is to be on all platforms.

I want to be on Pinterest. I want to be on X. I want to be on... you know, everything.

Okay. What is the... Forward think, that's where you want to be.

Now let's backwards plan. What can we do right now?

We can do search. because that's only content and that's keywords.

We can do that. All right, now we need creative.

Where do we start? And then make iterations along the way.

It's just always forward think, backwards plan.

And that's for anything. What are other examples of forward thinking?

Because, like, is... In a sense, everyone will be like, I want to be on every platform.

I guess like... What are other things that people think about when they're like the forward thinking?

It's like, oh, we want to go, we want to win Google search.

Is that an example of forward thinking? What else should people be thinking?

Yeah, exactly. What are those goals you want to hit?

One of the things that we look at is what emerging channels to perform in it.

So what is it going to take for us to consider this channel a performant channel?

That is an always-on... We're adopting it as BAU.

So that's going to take... you know, a thousand conversions a month at this much spend with this much left associated with it.

So OK, we know what that looks like. So we're going to backwards plan where we're going to start.

We're going to start with this one Add Creative.

OK, that works. Then we're going to go to this next, because within each platform, they all have multiple types of ad units you can use.

Say in LinkedIn, there's feed, there's conversation, There's video, there's carousel.

So what are the milestones along the way? that you're going to do to ultimately get it from testing a merging channel to perform them.

So that would be an example of something more micro than macro.

Got it. Well, with that, we reached our very exciting lightning round.

Are you ready? oh yeah first question what are two or three books that you've recommended most to other people Daily Stoic by far.

A book I read every day, quick, excerpt of what you can do from a Stoic philosophy standpoint.

Great By Choice is another good one. And Deep Work.

Favorite recent movie or TV show that you've really enjoyed?

X-Men 97, thoroughly enjoyed that, but that may be a lot of nostalgia.

I actually never watched RRR when it first came out.

Highly recommend that. That was a lot more... enjoyable than I was anticipating.

The playlist, which is about Spotify, Welcome to Rexum.

Yeah. And Billion Dollar Code. also on Netflix about Google Earth.

Very interesting. Yeah, RRR, that movie is intense and very long also.

It's like, man. It's like three and a half hours.

I just have to split it up into different days to finish it, but it was incredible.

0 and 10. Okay, favorite recent product you've recently discovered that you really love.

I drink too much caffeine and I've been trying to cut it out and I kind of circled back to This product I used to use called Magic Mind.

It's a little shot every single day, tastes really good, and it does help with focus, I find.

If it's a placebo, great. I don't care, but it's helping me.

That's amazing. I'm also a huge fan of Magic Mine.

I'm friends with the guy that started it.

So funny that you love it. I drink it often.

I'm on the subscription plan. And I think he uses Shopify to sell it.

He does. Yep. It all connects. Amazing.

Do you have a favorite life motto that you often come back to, share with friends or family, find useful worker in life?

Happiness is dedicated by expectations or dictated by expectations.

Um, that can't be more true more times than not.

And it's similar. That's why I said there's two and this one's similar to it.

You won't see it for what it is until you stop looking through the lens of what you want it to be.

Amazing. It reminds me of an equation a colleague of mine once... shared he wrote a book of like emotional equations or life equations it was happiness is uh Reality minus expectations.

Yep. Love that. Okay. Next question. Who's had the most influence on you in your career?

We mentioned him before, so I got to bring him back up.

Casey Winters, for sure. He was... We were at a wedding.

He showed me the original version of Google Analytics.

For those of you that don't know, it's called Urgent.

And when he showed that to me, it was, wait, you know all of this information about users coming to the site?

I knew I wanted to do marketing, but At that moment, I knew I was going to do digital marketing and you know, watch him grow in his career.

He's watching me grow in my career. We still balance each. each questions off of each other.

We cannot not have a phone call under an hour.

So definitely the most impactful. Is there something about Casey Winters that people may not know?

He's a two-time podcast guest, huge friend of the show.

Casey is really good at tennis, like insanely good at tennis.

You want to know how good? This is how good he was in high school.

He played. I'm pretty sure it was our senior year.

He hadn't played in a year. maybe a year plus, he was still ranked top 10 in, in the state of Louisiana for tennis players. hasn't played in a year, and still considered one of the top 10 players.

Insane. Did not know that. I actually play tennis. in high school.

And so that's amazing. I did not know this.

Thanks for sharing that. Timothy, this was incredible.

I think this is going to help a lot of people.

Figure out performance marketing, run more paid growth ads, figure out who to bring in to help them do this.

Thank you so much for sharing and for being here.

Of course. Appreciate the time. Bye, everyone. thank you so much for listening if you found this valuable You can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app.

Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast.

You can find all past episodes or learn more about the show at lennyspodcast.com.

See you in the next episode.

[성과 마케팅(Performance Marketing)의 정석: 성공적인 유료 성장 전략과 팀 구축 가이드]-[The ultimate guide to performance marketing | Timothy Davis (Shopify)]

📋 Summary

성과 마케팅의 본질: 측정 가능한 성장을 위한 전략

1. 유료 마케팅 시작하기: 신호(Signal)와 소음(Noise) 구분

2. 매체 선택과 전략적 접근

3. 에이전시 활용과 내부 팀 구축

4. 성과 측정의 함정: 기여도와 증분성(Incrementality)

5. 결론: 성장을 위한 마인드셋

🎯Key Sentences

📝Key Phrases

📖 Transcript