Mastering Performance Marketing: Strategies for Paid Growth Success

Performance marketing and paid growth have become essential components of many companies' marketing strategies. But navigating the complex world of paid advertising can be challenging. In this comprehensive guide, we'll explore expert insights from Timothy Davis, a seasoned performance marketing leader, on how to excel at paid growth campaigns.

Understanding Performance Marketing

Performance marketing refers to online marketing and advertising programs where advertisers pay only when a specific action occurs. These actions can include a generated lead, a sale, a click, or a download. The key differentiator is that performance marketing is measurable and based on concrete results.

Timothy Davis explains: "Performance Marketing is about online only but you could argue it's like offline could be performant Affiliates could be performant stuff like that." He notes that while the terms "performance marketing" and "paid growth" can be used interchangeably, it's important to specify which you're referring to, as paid can encompass both online and offline efforts.

When to Invest in Performance Marketing

A common question many businesses face is when they should start investing in performance marketing. Davis offers a bold perspective:

"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."

He argues that at baseline, everyone should be doing paid search. The rationale is that paid search is user-driven - someone has to type in a relevant keyword for your ad to show. This makes it fundamentally different from more disruptive forms of advertising.

However, Davis acknowledges that the extent to which a company should invest in paid growth depends on their specific situation. He recommends looking at your existing data to understand where your users are coming from:

"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."

Running Effective "Signs of Life" Tests

Before going all-in on a new advertising platform, Davis recommends running what he calls "Signs of Life" tests. These are small-scale experiments to gauge the potential of a platform for your business. Here are some key tips for running effective Signs of Life tests:

1. Use your own data: Start by leveraging your existing customer base to build lookalike audiences.

2. Start small: Begin with a 1% lookalike audience, as this will be most closely tied to your existing customer base.

3. Be patient: Give the test enough time to gather statistically relevant data. However, budget constraints often dictate the duration of these tests.

4. Don't be too hard on yourself: Remember that it's okay if the test doesn't work out. "We're either winning or we're learning," says Davis.

5. Consider the platform differences: Each platform is unique, with different user behaviors. What works on one platform may not work on another.

Choosing the Right Platforms

When it comes to selecting platforms for your performance marketing efforts, Davis recommends starting with the following:

1. Google: This includes Google Search, YouTube, and Google Display Network.
2. Meta: Encompassing both Facebook and Instagram.
3. TikTok: If your data shows users are already engaging with your brand on this platform.

For B2B companies, LinkedIn can be a powerful tool, albeit a more expensive one. Davis shares a compelling case study of how targeted LinkedIn ads helped win a major client for a cloud computing company.

The Power of Creative in Performance Marketing

One aspect of performance marketing that Davis believes is often underestimated is the impact of creative. He emphasizes the importance of emotion in ad creative:

"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."

This emotional connection doesn't necessarily mean pulling at heartstrings - it can be through humor or any other emotion that makes the user feel something after seeing your ad.

Building Your Performance Marketing Team

As your performance marketing efforts scale, you'll need to build a team to manage these campaigns effectively. Davis offers insights on how to structure this team:

1. First hire: A data-driven individual who can work in the platforms and understand how to find signal in the noise.

2. Second hire: A creative person, ideally with graphic design and branding skills.

3. Third hire: A dedicated data scientist to help with incrementality testing and advanced analyses.

Davis emphasizes the importance of giving new hires clear responsibilities and expectations early on, allowing them to make an impact as quickly as possible.

Measuring Success: Attribution and Incrementality

One of the challenges in performance marketing is accurately attributing success to your efforts. Davis is a proponent of multi-touch attribution models, particularly time decay models. However, he acknowledges that attribution alone doesn't answer the question of incrementality - whether a person would have converted anyway, even without seeing the ad.

To truly understand the impact of your campaigns, Davis recommends running incrementality tests:

"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 cost that is estimated in terms of impression share per percentage as well as spend hold back."

Leveraging AI in Performance Marketing

While AI is a hot topic in many industries, Davis notes that it has been a part of performance marketing for years:

"Smart bidding is AI all of the recommendations within Google ads is AI ad copy recommendations is AI and that that's always been in the platform so we've always used those things."

However, he sees potential for AI to have a significant impact in content creation and creative development in the near future.

Common Mistakes and How to Avoid Them

Davis has seen many companies make mistakes in their performance marketing efforts. One common issue is relying too heavily on agencies that use a one-size-fits-all approach:

"I think agencies have playbooks... I think a lot of agencies just come in and they go oh this is like a B2C 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."

To avoid this, Davis recommends either working closely with agencies to ensure they're diving deep into your specific needs, or considering bringing performance marketing in-house as you scale.

Conclusion

Performance marketing and paid growth can be powerful tools for driving business growth when used effectively. By understanding the nuances of different platforms, running smart tests, building the right team, and continually measuring and optimizing your efforts, you can create a performance marketing strategy that delivers real results for your business.

Remember, as Timothy Davis says, "We're either winning or we're learning." So don't be afraid to experiment, analyze, and iterate on your performance marketing efforts. With the right approach, you can turn paid advertising into a significant driver of growth for your company.

Article created from: https://www.youtube.com/watch?v=zNJyb3R_Pnc&list=PL2fLjt2dG0N6unOOF3nHWYGcJJIQR1NKm