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Zooming in and out - Performance beyond Ad platforms.
Optimize for humans, not machines.
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Michael and I met through his Substack. He worked at D2C brands before & I’ve always thought of DTC brands in many ways as being at the cutting edge of marketing - because they have to differentiate more via marketing & brand vs. core product attributes in some ways. This was always fascinating and somewhat mystical as someone leaning towards the performance side of marketing until Michael finally shared his Brand vs. Performance essay. If you haven’t read it yet, please check it out here
It is a great piece that helped me understand lots of DTC concepts, and where he articulated many thoughts I had with a lot of clarity and tactical depth. I am super excited to have him join us on 42/ as a guest author today.
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Illustrations by Alejandra Céspedes.
"Ad platforms are just tip of the iceberg" - Michael Lorenzos.
As marketers, we overcomplicate concepts and pat ourselves on the back once we can 'connect' A to B. In most cases, our ROI with the customer journey in the funnel gives meaning to our existence. And now, this malady has become a pandemic with increased reliance on just data (without much context).
Due to this, we marketers have developed myopia, as we are doing the same thing repeatedly, trusting the data, and forgetting to step back or zoom out in Michael's words, to look at the bigger picture.
In our chat with Michael Lorenzos, a B2B marketing rockstar (he would say a learner), we discovered a different way to look at marketing that might be helpful for your organization. This perspective focuses on understanding not only the details of the ad platforms' strategy in performance marketing but also zooming out to analyze them under the lens of classical marketing philosophies, lean development, and customer behavioral patterns.
We call it Zooming in and out.
Before we continue, and as always, remember this is just a "way" to see and understand marketing efforts, not a maxim that is set in stone.
The Zooming in and out paradigm.
“You are going to find the impact on performance outside the ad platform. You are going to find it in the conversion file you chose, the way your copy is on the website, the post click experience" - Michael Lorenzos.
First thing first, how would we define Performance marketing to a marketer from decades ago? Simply put, it is a way for businesses or marketers to have the ability only to pay when your prospect does a specific action (sale, lead or click) generate business outcomes or revenue, etc.
We perform; therefore, we are.
The ability to analyze ad spend has been a godsend, or 'tech people' send for new-age marketers with a myriad of platform tracking all types of digital behaviors. Tracking our customer footprints has become so much easier. The old saying by John Wanamaker, "Half the money I spend on advertising is wasted; the trouble is I don't know which half," is no longer a reality.
Unlike in previous decades, a CMO can confidently assign X amount for your ad spend budget and tell you to spend it wisely, knowing you now have the tools to tracking your spending according to the buyer journey or position in the funnel.
And it is through performance, through results, that we define whether a particular marketing decision is worth it.
While focusing obsessively on making sure the marketing machine you are building runs, it is also crucial to zoom out. Looking at external forces and marketing fundamentals around your algorithm-driven motions helps push your performance efforts further.
This "Zooming in and out", in other words, is simply an attempt to reconcile marketing fundamentals with performance marketing data-driven outcomes.
Zooming in allows you to figure out what works and how. And zooming out lets you figure out why something works (or doesn't) and how to create more of it.
In this paradigm, the zoom-in section refers to training the different ad platforms to ensure they behave as we want them to. This requires a constant loop in which we make sure everything is connected in the backend, we experiment and launch/optimize campaigns, and most importantly, we feed the ad platforms the right data points so they can perform.
How to zoom in:
Make sure your tracking is spotless: As we thoroughly discussed with Michael, it is surprising how many performance marketers jump directly to experimentation without ensuring everything works on the back end.
In performance marketing, measuring is vital. Even the best experiment without the correct measurements is bound to fail. So before you spend a cent, be sure you have set up suitable systems to understand how that investment adds value.
Use first principles to train the algorithm: We already have algorithms that do everything, but the reality is that there isn’t a single one-size-fits-all playbook when it comes to setting up ad platforms.
As mentioned in this HBR article, we must be cautious about algorithm marketing because they lack context, they may paint a picture of customers that isn’t accurate, and aren’t sensitive enough to context.
The job, when it comes to algorithms, is to train them to work for us. We need to own and design the logic behind its “if-then” nature. No other marketer will understand your product as well as you; no other person will appreciate your ICP as well as you.
It is up to you. After all, as Michael mentioned, ad platforms are simply “dumb machines that need anchor points to optimize to”.
Make sure you experiment and think critically about the impact/value - not the metrics: As performance marketers, we tend to focus on specific KPIs that will allow us to demonstrate to our stakeholders why our work matters. While this is fundamentally true, it is also essential to go beyond the metric and consider the impact/value our actions have on the marketing system we are building.
In that sense, you can do the right things without having immediate metrics to back it up. Sometimes, bold moves take a while to show results, but just because it can't be proven immediately does not mean it is not essential.
Remember, marketing has short and long-term goals. Moving the needle today is important, but so is having the capacity to plan for the future.
Optimize for signals: Optimizing for signals means selecting suitable conversion events for your campaign type, i.e., registering for a webinar or email signup. Once optimized for the right trigger, you can feed the ad platform algorithm with the correct data.
To do this successfully you must:
Figure out something you can track - This is particularly important because every company is unique, and as a marketer, you are the soul of the organization that truly understands how to connect your offer with a problem your customer faces.
We are aware that tracking can be a bit more challenging when you are making bets based on value (rather than metrics). But, exclusively sticking to CAC (one of the more popular metrics), might not be enough.
Figure out how to maximize the actions you are tracking
NOTE: keep in mind that if you have yet to do your homework right, i.e., have optimized your tracking right, you would be selecting the wrong signals, which would ultimately lead to feeding irrelevant data into the algorithm, thus skewing the whole of your campaign efforts and money.
Marketing 101 relies primarily on a contextual understanding of the world that surrounds your product. It is an invitation to zoom out, exploring the outward forces that can affect the marketing efforts around our product and adapting processes to match such troops.
However, this is an afterthought in performance marketing for B2B SaaS. Partly because we think the algorithm and testing, learning, and adapting will help us find success (which we already discussed as insufficient) and partly because connecting external patterns to our B2B SaaS products is difficult.
Within the sphere of D2C, it is easy to see how trends influence your campaign plans. For instance, the No-Sugar (a social factor) pushed Coca-Cola to create and market a no-sugar coke.
But when we talk in the context of B2B SaaS, it can get a bit tricky (being the marketing lead of a business selling to businesses servicing other businesses that are working with businesses is quite a conundrum).
Yes, yes, we know how in this scenario identifying trends and their impact can get hard. Still, it is vital to be aware of uncontrollable external factors, as you might be wasting money pushing marketing tactics on an unwilling audience to embark into the journey.
So whether these trends are political/economic/social /technological-ly influenced, any marketer (B2B or DTC) will tell you it can make or break your digital campaign. That's why stepping back from ad platform tactics is critical to find clarity in your campaign strategies.
Here are a couple of things you can do to zoom out and gain clarity of the context around your solution:
Understand your market trends: While there are many ways to do this, we recommend the following:
Do customer research: Talk to your current customers, and find out what they like about the product and what they need but has yet to be there (new features). Another often ignored way to do this is to use your product and be critical about it.
Do some review mining: Find out how your solution is perceived out there. Learn what some of the positives and negatives are and how your product fits in the category.
Be curious about the world in general, not just the industry: Another way to be 100% myopic is to consume content exclusively related to your industry. Plenty of exciting problems, products, and initiatives can shed some light on the challenges you are facing. We're not saying you must lose focus, quite the opposite; you must focus but also remember that inspiration and creative solutions are rarely where we think they are.
Explore value-add touchpoints for your ICP: The funnel is a myth that allows us to categorize where our potential customers are and what needs to be done for them to become customers. However, it needs to be improved when mapping out value-add touchpoints, primarily because we focus more on the structure of the funnel than on the customer's journey with our solution.
The Forget The Funnel team has thoroughly discussed this perspective on several occasions with tremendous success. Yet, we keep doubling down on funnels, standard KPIs, and metrics that are algorithm-friendly (rather than customer-friendly).
Let go of this structure and talk to your customers to discover the nuances of your product's journey. Only then will you find what is valuable, what needs to happen for more people to want to buy this product, and what needs to be measured.
Ensure you have an organized and connected marketing operations system: We already discussed in the zoom-in section that you must ensure your tracking is spotless. Yet, even if the monitoring is spotless, you must also make sure that marketing operations make sense for the organization's overall health and support other functions of the business (especially sales and customer support).
All businesses share an objective: to increase revenue. And, as a marketer, your job is directly linked to that revenue stream required for the company to thrive. You may not be the one closing, but your efforts directly influence whatever happens on the revenue front.
Given this massive responsibility, having a connected marketing operations system is fundamental. Therefore, it is best to ensure all your efforts and tracking systems are spotless and build a predictable marketing operations system for other business areas.
Apply general marketing principles to the scientific marketing zoom-in process: Being caught up in the algorithm game can lead us to build experiments and iterations to ensure an indicator matches our expectations (but not to grant the company’s success). However, by zooming out and gaining insight, we must remember that our marketing maxim should be to design experiments that have an impact (even if the needle does not move right away).
Remember that marketing is a marathon, not a sprint. Having the ability to zoom out to gain perspective and zoom in to swiftly and thoroughly execute whatever you think will work is critical.
Obsess about adding value to your ICP, even if the measurement (performance) is unconventional.
In a competitive marketing world, bold bets and understanding marketing as simply bridging the gap between a solution and a user is much more powerful than you can imagine.
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