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

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Timothy Davis has led performance marketing for all of Shopify for the past 2.5 years, and as a consultant has helped companies like Pinterest, LinkedIn, Redfin, and Eventbrite kickstart and scale their performance marketing teams. In every one of those cases, he got them so performant at paid growth that they significantly scale spend and investment in these channels. In our conversation, we cover:
• When and how to start investing in performance marketing
• Common mistakes companies make with paid ads
• How to build and structure a performance marketing team
• How to get your creatives performing better
• Strategies for optimizing workflows and team efficiency
• How AI will change performance marketing
• Much more

Listen now on Apple, Spotify, and YouTube.

Some takeaways:

1. When starting with performance marketing:

   1. Begin with Google Search ads, as they are user-driven and have high intent.

   2. Expand to Meta (Facebook/Instagram) and YouTube if you have the ability to create video assets.

   3. Reserve LinkedIn for highly targeted B2B campaigns, as it can be expensive.

2. When testing new platforms, start with 1% look-alike audiences (these are users who most closely resemble your current customers). Begin with small budgets to observe engagement metrics like click-through rates and impressions. If you see positive engagement (“signs of life”), gradually scale up your campaign while continually refining your creative, messaging, and targeting based on real-time customer feedback.

3. View each campaign as an opportunity to either win or learn. Performance marketing can be unpredictable, and the most common mistake people make is relying on a single campaign or platform for success. Tactics can yield varied results across different platforms, so maintaining perspective in the face of underperformance will help you iterate faster and make data-driven decisions.

4. When building your performance marketing team, prioritize these three hires:

   1. Hire 1: A data-driven, scrappy generalist who can launch early campaigns

   2. Hire 2: A creative expert skilled in graphics, writing, and branding

   3. Hire 3: A specialist data scientist to unlock advanced performance marketing strategies

5. Contact your account representatives or partners from platforms like Google, Facebook, or LinkedIn. Provide them with a list of your top competitors, and they can give you benchmarks on metrics like CPC, click-through rate, and conversion rate. This will help you understand where you stand relative to your competitors.

Where to find Timothy Davis:

• LinkedIn: https://www.linkedin.com/in/timothypatrickdavis/

In this episode, we cover:

(00:00) Timothy’s background 

(02:31) Understanding performance marketing 

(06:31) The importance of paid search 

(08:39) Identifying growth potential 

(09:54) Case studies: Hairstory and Ipsy 

(12:22) Experimenting with new platforms 

(18:57) Choosing the right platforms 

(20:23) LinkedIn for B2B marketing 

(27:56) When to start investing in paid growth 

(33:33) Common mistakes in performance marketing 

(37:41) Working with agencies and consultants 

(40:36) Hiring for performance marketing 

(47:33) Metrics that matter 

(54:43) Competitor analysis and CPC insights 

(56:15) Custom reports and data visualization

(56:38) Understanding impression and click share 

(59:10) True competition metrics 

(01:02:14) Attribution and incrementality 

(01:08:52) Building a performance marketing team 

(01:10:53) Creative and ad copy collaboration 

(01:15:48) Managing workload and hiring strategy 

(01:20:52) Training and onboarding new hires 

(01:24:41) Impact of ATT on performance marketing 

(01:25:56) The power of creative in ads 

(01:29:47) Using AI in performance marketing 

(01:37:16) Lightning round 

Referenced:

• Shopify: https://www.shopify.com/

• What Is Performance Marketing?: https://www.shopify.com/blog/performance-marketing

• Google AI: https://ai.google/

• Pinterest: https://www.pinterest.com/

• Eventbrite: https://www.eventbrite.com/

• Booking.com: https://www.booking.com/

• Credit Karma: https://www.creditkarma.com/

• Hairstory: https://hairstory.com/

• Google Display Network: https://www.semrush.com/blog/google-display-network/

• SoftLayer Becomes Part of IBM’s SmartCloud: https://www.datacenterknowledge.com/deals/softlayer-becomes-part-of-ibm-s-smartcloud

• Coca-Cola Freestyle: https://www.coca-colafreestyle.com/

• Monday.com: https://monday.com/

• How to sell your ideas and rise within your company | Casey Winters, Eventbrite: https://www.lennysnewsletter.com/p/how-to-sell-your-ideas-and-rise-within

• Thinking beyond frameworks | Casey Winters (Pinterest, Eventbrite, Airbnb, Tinder, Canva, Reddit, Grubhub): https://www.lennysnewsletter.com/p/thinking-beyond-frameworks-casey

• The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t: https://www.amazon.com/Signal-Noise-Many-Predictions-Fail-but/dp/0143125087

• Courtney Wenneborg on LinkedIn: https://www.linkedin.com/in/cwenneborg/

• PPC Hero: https://www.ppchero.com/

• Another Deep Dive into Auction Insights, by Jacob Brown: https://www.ppchero.com/another-deep-dive-into-auction-insights/

•Multitouch: https://multitouch.app/

• What is time decay attribution?: https://growthmethod.com/what-is-time-decay-attribution/

• Linear: https://linear.app/

• Consumer Heterogeneity and Paid Search Effectiveness: A Large-Scale Field Experiment: https://faculty.haas.berkeley.edu/stadelis/BNT_ECMA_rev.pdf

• ADT: https://www.adt.com/

• Shopify Bursts: https://focus.business/blog/shopify-bursts/

• The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter: https://www.amazon.com/First-90-Days-Strategies-Expanded/dp/1422188612

• Kat Nguyen on Shopify: https://www.linkedin.com/in/katngy/

• Dollar Shave Club ad: https://www.youtube.com/watch?v=ZUG9qYTJMsI

• The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living: https://www.amazon.com/Daily-Stoic-Meditations-Wisdom-Perseverance/dp/0735211736

• Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All: https://www.amazon.com/Great-Choice-Uncertainty-Luck-Why-Despite/dp/0062120999

• X-Men ’97 on Disney+: https://www.disneyplus.com/series/x-men-97/vc1XIz90ZNH5

• RRR on Netflix: https://www.netflix.com/title/81476453

• The Playlist on Netflix: https://www.netflix.com/title/81186296

• Welcome to Wrexham on Hulu: https://www.hulu.com/series/welcome-to-wrexham-c6906d50-d06c-40d1-a57c-1885d9dc2fef

• The Billion Dollar Code on Netflix: https://www.netflix.com/title/81074012

• Magic Mind: https://magicmind.com/

Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

Lenny may be an investor in the companies discussed.