Jul 28, 2024 · 1h 42m · lennys-podcast
The ultimate guide to paid growth | Timothy Davis (Shopify)
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Growth leader Timothy Davis shares a comprehensive masterclass on modern performance marketing, detailing how to validate acquisition channels, construct disciplined in-house growth teams, and optimize campaigns using rigorous incrementality and metric analysis.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Lenny holds 22.1% of the talking time here. How this is scored →
Lenny as informed peer 3.6 Guest teaching 5.3 Guest disagreement 1.1 Lenny pushing back 1.0
speaking balance: gold is Lenny, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 6:42 Paid is for everyone hot take
Timothy forcefully rejects Lenny's conventional assumption that only select business models should invest heavily in paid acquisition, arguing modern SERP and social feeds necessitate paid participation for virtually all businesses.
Hardest push from Lenny ▶ 30:48 Pushing on pre-product market fit advertisingLenny challenges Timothy on whether startups should run paid ads to discover demand before having product-market fit, prompting Timothy to explain why operational and product readiness must come first.
Biggest teaching moment ▶ 49:40 Evaluating account-level quality score and ad strengthTimothy reveals live account reports to educate Lenny on diagnosing anomalous high CPCs on brand terms and how a single poor ad unit degrades overall account-level quality score.
Lenny holds their own ▶ 23:15 Synthesizing LinkedIn ABM economics and LTV constraintsLenny immediately synthesizes Timothy's complex enterprise LinkedIn targeting story, precisely identifying the underlying unit economics and high LTV/ACV requirements necessary to justify such high-cost campaigns.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Lenny as informed peer | Guest teaching | Guest disagreement | Lenny pushing back | Why |
|---|---|---|---|---|---|---|
| Defining Performance Marketing Versus Paid Growth | 4 | 4 | 1 | 1 | Lenny establishes definitions around performance marketing and paid growth, while Timothy clarifies that performance marketing traditionally covers online channels but modern definitions encompass measurable offline efforts. | |
| Sponsor Message: OneSchema | 5 | 5 | 2 | 2 | Following a sponsor read with Christina Gilbert, Timothy drops a contrarian hot take that paid marketing is essential for virtually all businesses due to search and social algorithm shifts, pushing beyond Lenny's single-engine framing. | |
| Structuring Signs of Life Experiments and Audience Lookalikes | 3 | 6 | 1 | 1 | Timothy educates Lenny on structuring low-budget 'signs of life' tests, explaining lookalike audience percentages (1% to 10%) on Meta and how to differentiate audience targeting issues from creative failures. | |
| Channel Selection: Search, Video Ads, and Account-Based LinkedIn Strategies | 4 | 6 | 1 | 1 | Timothy shares an advanced account-based marketing case study using LinkedIn geofencing and role-targeting against Coca-Cola decision-makers to overcome security objections, which Lenny finds uniquely insightful. | |
| Investment Timing, Market Demand, and Product-Market Fit Prerequisites | 4 | 5 | 2 | 2 | Timothy challenges the viability of running paid ads pre-product market fit, citing an IBM international expansion failure where operational payment mismatch caused paid traffic to bounce. | |
| Common Agency Shortcomings and Transitioning In-House | 3 | 6 | 2 | 1 | Timothy details why standard agency playbooks fail and how setting clear milestones and ops cadences helps companies transition performance marketing in-house without retaining bloated retainers. | |
| Hiring the First Performance Marketer: Prioritizing Signal Over Noise | 3 | 5 | 1 | 1 | Timothy explains his philosophy on hiring the first performance marketer, emphasizing candidate data discernment—separating signal from noise—over platform tool mastery. | |
| Sponsor Message: Eppo | 4 | 4 | 0 | 0 | Following the Eppo sponsorship segment, Lenny touches on Timothy's analytical background in baseball stats, and Timothy explains how assessing statistical relevance informs ad optimization interviews. | |
| Evaluating Ad Strength, Relevance, and Account-Level Quality Scores | 4 | 7 | 1 | 1 | Timothy walks through proprietary dashboard exports, educating Lenny on identifying account-level quality scores, diagnosing discrepancies between high quality scores and elevated CPCs, and optimizing ad relevance. | |
| Click Share Versus Impression Share and Measuring Competitor Conquesting | 4 | 7 | 1 | 1 | Timothy demonstrates how click share outperforms vanity impression share metrics and outlines Jacob Brown's true competition metric from PPC Hero for measuring competitor conquesting. | |
| Multi-Touch Attribution and Incrementality Testing Frameworks | 4 | 6 | 1 | 1 | Timothy explains multi-touch time decay attribution and outlines incrementality testing methods, such as geo-experiments and spend holdbacks, noting they require meaningful monthly ad spend to yield reliable signal. | |
| Building the Growth Team: Sequences, Creative Alignment, and Copywriting | 3 | 5 | 1 | 1 | Timothy outlines the sequential growth team hiring model (growth marketer, dedicated creative, and data scientist) and shares a counterintuitive example where simple zero-dollar fee ad copy beat intricate value propositions. | |
| Preventing Organizational Bloat with Capacity Calculators and Ops Cadences | 4 | 5 | 1 | 1 | Timothy details Shopify's capacity calculator for preventing organizational bloat, showing how tracking quarter days and meeting overhead helps teams avoid premature headcount additions. | |
| Accelerating New Hire Onboarding for Rapid 30-Day Impact | 3 | 6 | 1 | 1 | Timothy explains his rigorous onboarding methodology, cutting conventional 90-day ramp periods down to 30 days by pairing live over-the-shoulder tactical walkthroughs with immediate campaign ownership. | |
| Rapid-Fire Audience Q&A: Apple ATT, Creative Leverage, and Conquesting | 3 | 6 | 2 | 1 | In a rapid-fire Q&A, Timothy explains how mobile tracking works around Apple ATT via SKAdNetwork and reframes competitor keyword bidding, noting apparent conquesting is often unintentional close-variant matching. | |
| The Evolution of AI in Paid Marketing and In-House Creative Advantages | 4 | 5 | 1 | 1 | Timothy breaks down the current realities of AI in paid marketing, explaining that core bidding algorithms have long leveraged AI while creative iteration remains an emerging domain best handled in-house. | |
| Core Operating Framework: Forward Thinking, Backwards Planning | 3 | 4 | 0 | 1 | Timothy summarizes his foundational operating principle of forward thinking and backward planning to define explicit micro milestones from emerging to performant channels. | |
| Lightning Round, Daily Habits, and Casey Winters' Influence | 3 | 3 | 0 | 0 | Lenny conducts the standard closing lightning round covering book recommendations, daily habits, and reflections on Casey Winters' career influence. |
Statements from this episode (21)
Davis: Modern paid growth encompasses offline channels alongside digital
“Historically people when they have said paid growth have been fully focused on just online. But I would argue in the last couple of years, you could definitely roll offline into that conversation as well.”
Davis: Every company must invest in paid search due to AI results
“Hot take I would say paid is for everyone. I, 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 p…”
Davis: Start platform experiments by building lookalikes from existing customer data
“The number one thing I tell people all the time 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.”
Davis: Lookalike audiences of 8% or higher usually fail on ad platforms
“What I tend to do is build ad sets, one at one percent, 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 eight plus does not work.”
Davis: LinkedIn ads cost roughly three times more than other channels
“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.”
Davis: Test Google and Meta before advertising on LinkedIn
“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.”
Davis: Emotional and humorous YouTube ads outperform other creative approaches
“If you can have an emotional connection with the user is going to be way more impactful and way more powerful than anything else. And to take that further, when I say emotion that I'm talking about comedy. I'm talking about, you know happiness.”
Davis: Pre-PMF paid ads risk permanently alienating future customers
“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. It's, I had a bad expe…”
Davis: Bring paid growth in-house once ad spend reaches $50,000 monthly
“Start there, get it to a good place, create that milestone of, hey, when we're spending 50 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.”
Davis: Upgrading Google ad relevance above average yields 12% more impressions
“More times than, I think it's a 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.”
Davis: Google Ads maintains a hidden account-level quality score
“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.”
Davis: Ask ad platform reps for anonymized performance data against top competitors
“Every single platform has partners available... 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 transparen…”
Davis: Optimizing for impression share is ego marketing over click share
“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 o…”
Davis: Combining auction metrics effectively reveals genuine competitor threats
“And two of those metrics are position above rate, When we show an amount of times they show and we don't. Add it together, and it will show how often a competitor ranks above you in all auctions you are available for. Using this type of lens is an effective wa…”
Davis: eBay cut brand search ads realizing organic traffic converted anyway
“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 ad…”
Davis: Incrementality testing is useless below $50,000 in monthly platform spend
“If you're not spending more than, I would say, 50 K a month in the platform, doing this is going to be a lot more work than you're gonna get result from. You, you're just not gonna have enough signal there.”
Davis: First three growth hires should be generalist, creative, and data scientist
“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 t…”
Davis: Simple '$0 setup fee' copy beat comprehensive value-prop ads for ADT
“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 …”
Davis: Require multiple over-capacity quarters and task pruning before adding headcount
“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. An…”