AI driven Performance marketing. Be an early bird.

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I asked Google Bard- What is Performance marketing?

And below was the response:

This is the most sought-after explanation of performance marketing.

Performance marketing is a critical reason why Digital marketing is looked at seriously in the marketing & advertising industry.

Because it drives results. And in most cases, these results are sales.

But what does it take to become a successful performance marketer? Especially when things are changing so fast with AI evolution.

A performance marketer

• Needs to have an in-depth understanding of ad platforms like Facebook/Google

• Needs to be good at planning & improvising

• Should follow- If you can’t measure it, you can’t improve it methodology

• Needs to know how to leverage brand equity to drive sales

• Needs to have a slightly long-term view

• Be decisive and should be able to back up the decisions

• Needs to understand the business model and its levers

• Needs to have an understanding of data, segmentation and automation

• Needs to be an excellent communicator and negotiator

Now if you look at the above ingredients closely, AI will possibly cut across all of these- for good.

Let’s pick up each point and detail the impact of AI with some use cases:

1. Performance marketers- Need to have an in-depth understanding of ad platforms like Facebook/Google

Google did their flagship I/O event on 10th May 2023. Wherein Mr Sundar Pichai spoke about the role of AI in user-facing searches.

Since then, Google has announced many products where AI will start taking the front seat to solve users’ problems.

While you may have not used AI in Google apps yet (or you didn’t realise that AI is doing the job at the back end) but wait till Google makes features like these live:

‘Help me write‘ in Gmail- “Help me write” can create entire email drafts for you based on simple prompts.

On a simple prompt of- ask for a full refund for the cancelled flight. Gmail can write complete emails, like this:

If I talk about ads- Google is clearly making full use of AI to make automated ads more automated.

One of the most automated campaigns on Google ads is Performance Max.

Generative AI is making its way to Performance Max (PMax) campaigns – in the form of both text asset creation and AI image generation.

How it works. - Advertisers can input their website into Google AI, and then answer a handful of questions. Google AI will then start “learning about your brand.”

Sample questions from the visual above include:

Where will people go when they click your ad?

What products or services are you advertising?

What makes your products or services unique?

What is your brand personality?

PMax campaigns will then be populated with assets, including text and other assets.

Another example of this is- while creating a performance-max ad, you- a performance marketer can decide what creative you want to use to run with. You can generate creatives on the fly while creating performance-max ads.

Something like this:

on giving the below instruction to Google it made multiple images:

“ingredients used for pet food, like fish, chicken, raw meat and vegetables on a stylish slab-style play in studio lighting”

The generative AI creation of assets directly within the platform looks slick, simple and (most importantly) customizable.

Also, any new targeting goals in Performance Max should be gladly welcomed by advertisers as they can help to “steer” the machine in a direction instead of placing it on autopilot.

This is just one example, similarly, ad platforms will continue to leverage AI to simplify the lives of performance marketers to help them make decisions fast, improvise fast, experiment fast and deliver fast.

2. Performance marketers- Need to be good at planning & improvising

The day of a performance marketer starts by either making, evaluating or delivering on a specific media plan.

And success of a media plan depends on how fast you test and improvise.

Testing is an integral part of any performance-led campaign.

Next-gen performance marketers need to be good at putting a base framework or plan in place but what will differentiate an average-performance marketer from an exceptional one is- how fast one is able to test and make changes to the campaigns keeping AI at the realm.

With AI tools like Web10, Durable and Imagica, creating a website or a webpage for a campaign takes less than 2 minutes.

Don’t believe me? try out Web10 today to see how fast things around us are changing.

3. Performance marketers should follow the- If you can’t measure it, you can’t improve it methodology:

If someone asks me what is the most important aspect of performance marketing. I would pin my finger on- Trackability.

As a performance marketer your job is majorly around numbers and if your numbers are not right, no agency, no creative, no platform can save you.

Hence, when I take up a project for consultancy, the first thing I check is the gap they have in their Google, Facebook dashboard numbers, Google analytics numbers and their back end.

If the gap is unacceptable, then before suggesting or working on anything new, we fix the tracking first.

Believe it or not, this is the most common miss that brands have that I have come across.

The challenge with tracking is that it is technical, time-consuming, and requires coding intervention (if you are naive).

However this problem too is solved by some really useful tools in the market.

My favourite tool for anything related to Google, Facebook or Google Analytics trackability is Conversios.

The best part of conversios is that once you install the app or plugin for your WooCommerce, Shopify or Magento, all the pixel integrations can happen with a single click, eliminating the need of relying on a developer or trying to do a DIY.

Another common challenge e-commerce marketers face is managing the product feed, syncing them timely, reducing errors etc.

Most of the automated campaigns by Google and Facebook make use of product feed to run AI-based dynamic campaigns that drive sales.

Conversios also helps you to manage product feeds and sync unlimited products from Google Merchant Center for WooCommerce and Magneto-based websites.

The better and more accurate you are able to track, the better data you will be able to feed to your ad platforms like Google and Facebook. The better quality data Google and Facebook pixels get, the more optimised results they will be able to give.

When you have the option of enabling these pixels in the matter of a click via Conversios, why rely on a human where the chances of mistake are comparatively more?

4. Performance marketer- Need to know how to leverage brand equity to drive sales

If you work for a slightly established brand, you are in luck.

Brand plays a very big role in performance marketing.

One of the best use cases I have seen by a brand to use an AI-based chatbot to convert users is from Apollo 247.

Apollo 247 is a trusted brand in the healthcare space in India.

They have done many brand campaigns and have worked on doctor-patient experience for some time now to build brand equity.

Hence, they can convert a patient to take a consultation from them on Whatsapp integrated with an AI-based chatbot directly.

A user may uninstall the app in 7,15 or 30 days. But it is easier to get the user back to your ecosystem if there are avenues like these.

5. Performacne marketer- Needs to have a slightly long-term view

Today, very few performance marketers make use of AI-led ad solutions by Google and Facebook.

Facebook has a specific campaign type- Dynamic ads for prospecting users.

At the core, these ads are based on an AI model.

Once AI understands your target audience persona, it performs well and is also more scalable than most other campaigns on Facebook.

When I started running these ads a few years back (yes AI has been enabling back-end systems of Facebook and Google for years now), I knew that these ads will take time to perform. Thanks to my partner agency as well for prospecting it correctly.

We ran these ads for good 25 days before we touched 10 conversions for an AOV of ₹500. The CACs were unreasonably high.

It was only on the 26th day onwards average daily conversions increased from 0.4 to 2 and went on to deliver 10 orders daily by the 35th day.

We quickly scaled this campaign and made it part of our always-on approach to make the most out of it.

During EOSS (end-of-season-sale) in late 2019, this campaign was the best-performing one contributing to 40% of overall sales that came from Facebook.

Being a performance marketer comes with a lot of patience.

You need to trust the decision you have taken and back it up with strong logic.

Smart performance marketers always keep 15-20% of their budgets for experimentation.

Because they know, what is working today, will not work 15 or 30 or 60 days down the line.

Hence having a backup plan in the form of feeding an AI-powered campaign is a smart approach.

6. Performance marketers- Need to be decisive and should be able to back up the decisions

A performance marketer that takes decisions on the basis of conversions metrics will always run into saturation.

Before a user converts, he/she takes many useful actions. Like, spending time on the website, signing up on the website, downloading the app, cart additions, adding to wishlist, initiating checkout and so on.

Someone with a limited understanding of how important the above actions are will not understand the role these actions play in conversion.

But if you as a performance marketer are struggling with getting conversions however other softer metrics that lead to conversion are looking healthy, you need to take better business decisions to convert these users before questioning your own decision.

Using tools like Webengage, Netcore, Moengage and integrating them with your Facebook and Google ad accounts is a smart, AI-backed way to show relevant communication or ads to users and drive them to conversions.

7. Performacne marketer- Needs to understand the business model and its levers

This is where a performance marketer needs the help of category, brand, product and sales teams to understand what is it that drives sales.

What are the bestsellers, what are the new arrivals, how to play discounting, and how to play FOMO are some of the important levers that drive a business.

Great performance marketers push the product and technology teams to have a recommendation engine in place to predict and serve the right content or product to its users.

They also get deeply involved in understanding and sharing their perspectives on what data should be fed to these recommendation engines and how to communicate products based on AI intelligence.

If you do not know what a recommendation engine is and its capabilities, know this- when you open Netflix, it suggests you shows that you may be interested in and your Netflix feed is unique to you.

Netflix uses an AI-based recommendation engine that considers your viewing habits and hobbies to serve you the right shows/movie recommendations.

You as a performance marketer need to use your prowess of what communication and products drive clicks to join hands with a recommendation engine to drive customer lifetime value.

8. Performance marketer- Needs to have an understanding of data, segmentation and automation platforms

I have already touched up the marketing automation above with the tools like Webengage etc.

Let’s talk about the importance of data in the life of a performance marketer.

For a performance marketer, the journey to capture data and make use of the data starts from the point a user engages with your content or visits the website.

Capturing the digital footprint of the visitor is the foremost data point a performance marketer chases and makes use of this data point almost forever.

Another important aspect with respect to data is where marketers and data scientists work closely to drive predictive analytics.

Marketers help in defining the problem, and with the organisation of the data while data scientists pre-process this data (cleaning of data for any anomalies, missing data points or outliers), develop predictive models and thereafter validate and deploy results.

Predictive analytics where the system is able to predict user behaviour is based on machine learning and AI.

For a performance marketer, a successful predictive model can be a boon to enhance customer lifetime value.

9. Performance marketer needs to be excellent communicator and negotiator

This is a soft skill that mostly everyone should have but it is more important for a performance marketer.

You need to be able to explain why you are doing what you are doing.

What is the impact of an awareness campaign? Why is the RoAS not increasing? Why is CAC not coming down?

These are some of the peculiar questions that performance marketers get trapped into and most of them are not able to come up with logical answers.

You need to understand how modern AI-backed platforms work in order to have a vision for the brand you are managing and talk about your approach with complete confidence.

As a performance marketer, you talk to platforms and negotiate day in and day out, media agencies, trading desks, demand-side platforms, ad exchange, supply-side platforms and many such stakeholders are typically involved in the successful execution of a campaign.

However, with the advent of AI and blockchain technologies, most of the intermediaries will go off and only the essential ones will remain.

For ex., in coming years, you will see advertisers, publishers and maybe 1-2 important intermediaries will sign smart contracts in blockchain technology, eliminating the chance of any fraud or ambiguity.

Giving more control to the advertisers. Advertisers will only pay for the ads that were genuinely served to users, giving more negotiation power to the hands of performance marketers.

That’s it for today folks!

I thoroughly enjoyed writing this newsletter as I had to use my expertise and had to dig into previous use cases to give you the most honest view of AI in performance marketing.

I hope you enjoyed reading it too. If you did and made it this far in the newsletter, do give a shoutout on your Instagram and LinkedIn and tag me to show your love. I will re-share your tags on my social accounts.

If you liked reading this newsletter, you will love what we teach in our A to Z of digital marketing masterclass. The next batch is starting on 8th July and we are running a flat 50% off early bird offer. Your seat is waiting, grab it today and I will see you LIVE.

Have an awesome Sunday ahead.

Cheers,

Apurv