π Earlywork #58: WTF is Performance Marketing?
Featuring a guest piece by Bennie Liu (Performance Marketing @ HealthMatch) + a One Minute Hustle with Dilpreet Kaur Taggar (Founder @ South Asian Today)
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π‘Weekly Cheeky Tip
For a long time, marketing was that weird, fluffy, kinda creative, kinda businessy job that everyone thought was somehow helpful, but nobody really measured to check whether that was true.
Then along came the internet, and with it, the wild world of paid online advertising across search engines and websites.
All of a sudden, rather than paying for a billboard outside and hoping for the best, you could pay extremely precise amounts for a certain customer action e.g. a view, a click, etc.
People went, βOh shit, what if we optimise this?β, and along came the art & science of βperformance marketingβ (disclaimer: nothing to do with sports, to my dismay).
Itβs the nuts and bolts of digital marketing, but university today barely scratches the surface on how the heck it actually works.
To save you the wild Google Search goose chase, we had a cheeky chat with Bennie Liu, who leads performance marketing @ HealthMatch, a Series B healthtech startup that connects patients around the world to clinical trials.
Previously, he led growth functions at two VC-backed startups, so heβs got a strong quantitative marketing backbone to get yβall up to speed!
Hereβs what he had to say about how performance marketing works π
So youβre meant to look after βgrowthβ? Hereβs how to think about ads.
Gβday folks, so you may have heard of performance marketing or paid ads before, but youβre probably wondering: how the f*ck does it actually work?
To put a definition to the term, performance marketing is marketing where you only pay when a specific action occurs.
The two platforms youβd most likely know are Facebook and Google Ads, but there are a plethora of others including TikTok, Snapchat, native ads (Taboola & Outbrain), and more!
So why would anyone want to do it?
Companies including Square, ClassPass, Masterclass, Uber and Koala all grew large parts of customer base using performance marketing, especially in the early days.
Simply put, itβs one of the only channels out there that functions similar to a βtapβ - done correctly, you can turn it on/off growth without much ramp-up time. You can also scale it up and down with the amount of budget invested fairly linearly.
But isnβt paying for growth βbadβ?
I donβt believe any channel is necessarily free. Organic channels require investment in the form of labour (content writers, specialists) and time (these channels take months to years to get going).
Performance marketing is one of the fastest channels in terms of time-to-value and one of the most scalable.
In fact, startups spend almost 40 cents of every VC dollar on Google, Facebook, and Amazon to acquire users. Safe to say - itβs a crucial channel for lots of startups!
Which sorts of companies is it best for?
I always start with the following questions:
Product <> Channel Fit
Volume and Cost
Product <> Channel FitΒ
Is there a match between the channelβs audience and your product?
Using Facebook as an example, if youβre a tractor company and youβre trying to sell five-figure tractors through Facebook ads, is that where people are most likely to buy?
On the other hand, if youβre a direct-to-consumer company or a B2C SaaS company, Facebook ads might be one of your best-performing channels.
Volume and Cost
The following diagram by Reforge is an excellent resource for thinking about it:Β
TL;DR: thereβs a sweet spot of companies that benefit from paid, namely those who can afford the custom acquisition costs and have potential users/customers who would buy the product from the channel.
So ads could be a fit, how do you get started?
This article isnβt intended to be an A-Z of paid marketing. Instead, the focus is on a few concepts that I found to be core. Please note, the following tips are contextual to Facebook ads.
#1: Minimum Viable Tests (MVTs)
Youβve no doubt heard of MVP but a powerful adjacent concept is the MVT.
With an MVT, youβre aiming to answer the question: βWhatβs the smallest possible form of something I can test to get an early signal of whether this could work before doubling down?β
Working for a startup, youβll likely be constrained in both budget and time when running ads. Iβll give a concrete example:
Youβd like to test video ads on an account that has historically run image ads only.
Do you:
a) Create a scrappy video on iMovie or Clipchamp
b) Hire a freelancer/agency to create high-quality videos?
Option A is almost always preferable. Youβre looking to de-risk the concept before you invest further into it.
Besides, what resonates most likely isnβt whatβs most polished.
#2: Silver bullets donβt exist
If youβve looked online, youβve no doubt come across someone recommending a certain account structure, type of landing page, or ad format thatβs meant to work best.
This is typically not the case and instead, every account should be thought of as its own puzzle.
It needs to be solved on a case-by-case basis and what holds true for one ad account may not necessarily work for another.
Instead, you should work it out from first principles. Ask and solve questions such as:Β
What creative would my audience be most familiar with?
Does my landing page match my creative?
Have I tested this before and what were the previous results?
#3: Useful mental models to keep in your back pocket:
π KISS
Yep, thatβs βKeep it simple, stupidβ, straight out of your high school science classes. In the performance marketing world, there are infinite things to test, and clarity is the prevailing factor, like:
How complex of a structure do you need?Β
How many ads should I run?
How many landing pages should I make?
How to answer them? Askβ Whatβs the smallest valid test I can run?β
With complexity, comes more setup time and more chances of something going wrong. Always start simple, make it work first, and then expand.Β
From Facebookβs side, theyβve been recommending an extremely simple account structure to best leverage their machine learning.
πΊ Explore, Then Exploit
Youβll want to test with high variance when you first start off an account.Β
In the early days, you donβt know what works, so you should structure your bets to cover wide variations.
Think of these as wide swings. Once you see signs of success, you double down and start creating smaller iterations to optimise.Β
Test things such as angles, creatives, formats, and account structure first and once you have winners - ask the question βwhy did this work?β
This becomes your next hypothesis. For example, if itβs due to the ad format, repeat the format with variations and A/B test against your old winning ad.
This forms the basis for your testing cycles. Remember, always test something specific and have measurements for what counts as a success.
Well, folks, thatβs it for a quick intro to the world of paid ads. If you have any specific questions or just want to chat about growth/marketing - just reach out!Β
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1οΈβ£ π πͺΒ One Minute Hustle
We are back once again withΒ One Minute Hustle,Β a bite-sized interview with an emerging Australian young startup founder or operator.Β
This week, letβs get inside the noggin of a young founder tackling diversity issues in Australiaβs media landscapeβ¦
Dilpreet Kaur Taggar, Founder @ South Asian Today
βοΈ What are you working on?
More than 380K South Asian women live in Australia, and yet, there is no media company catering to their specific interests.
This is where South Asian Today comes in. We are Australia's first media start-up for South Asian women and non-binary peoples.
Launched in April 2020, we publish multimedia stories focusing on gender, race, culture, caste and class not just to have more media representation but also to create financial and creative opportunities for brown writers, journalists and artists.
π± Howβd you get started?
I am a rather spontaneous person. I started the company when I found a domain name to be honest. I had never run a business before so I started with what I know best: talking.
I started pitching myself, endlessly, shamelessly, everywhere. I did open calls for writers to contribute, artists to collaborate and started our own podcast series, too.
Starting from scratch, we have now worked with 70+ writers, 20+ artists, published 250+ articles, 2 seasons of our podcast and also opened our own shop to create financial opportunities for South Asian creatives.
I may not know everything yet, but I know what not to do: never half-arse it. If you fail, fail glamorously I'd say!
π€ Why do you do what you do?
I moved to Australia in 2017 to study journalism and soon realised my stories, experiences and analysis of the world found a tiny spot in predominantly white and western-dominated newsrooms.
I saw fellow international students and migrants struggle to get their voices heard. I decided to put the skills I was learning at school into an actual business venture and ensure closing the gap between South Asian storytellers and the Australian media.
Our mission is to become a go-to platform for South Asians to write, create, get published and take charge of their own stories.
π Check out the South Asian Today website here
βοΈ Become a member or buy them a coffee here
Keen to share your story, or know a young startup founder or operator we should feature next?
Share your deets below or send to your mate, and weβll get in touch!
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