Growth Marketing: Why Signal is Key to Success

The Critical Importance of Signal in Growth Marketing

A poor phone signal results in distorted audio, but in growth marketing, a lack of clear signal can lead to substantial financial losses and failed initiatives. As data privacy becomes increasingly paramount, establishing robust signal is more crucial than ever for businesses.

Defining "Signal" in a Growth Context

The term “signal” in growth marketing encompasses various data points, but fundamentally, it refers to the event data used to inform strategic decisions. Specifically regarding paid acquisition, accurate event data transmission to advertising platforms is essential.

This data enrichment allows targeting and bidding algorithms to function with maximum effectiveness.

The Cost of Ignoring Signal Quality

Insufficient or inaccurate signal in paid campaigns can result in significant wasted expenditure. Many startups have experienced this firsthand, losing valuable resources due to inefficient ad spending.

Conversely, optimizing signal can dramatically improve return on investment. Experience at companies like Postmates has demonstrated the substantial benefits of refining event data tracking.

Avoiding Costly Mistakes

It is vital for startups to prioritize the correct setup of their signal tracking from the outset. This proactive approach ensures that every advertising dollar is utilized to its fullest potential.

By focusing on data quality, companies can avoid the pitfalls of ineffective campaigns and maximize their growth marketing efforts.

Choosing the Right Optimization Event

Initially, it might appear logical to optimize campaigns around a primary metric like a purchase. However, with limited ad spend, the resulting conversion volume could be quite low. Conversely, optimizing for a top-of-funnel event, such as a landing page view, may yield a weak signal.

This weakness arises because a low-intent event is being reported as a success to the advertising platforms. By defining a landing page view as successful, platforms like Facebook will prioritize finding users with similar characteristics to those lower-propensity converters.

A Health and Wellness App Example

Consider a health and wellness application aiming to increase memberships for its coaching program. They are beginning to explore paid acquisition, allocating $5,000 weekly to Facebook advertising. The following details their event funnel, weekly volume, and cost per event:

As illustrated, landing page views generate substantial volume. However, as users progress through the funnel, volume decreases due to drop-off. The initial inclination might be to optimize for either landing page views, due to the high data volume, or subscriptions, as it represents the strongest outcome.

However, based on extensive testing across numerous ad accounts, neither of these events would be the optimal choice. Optimizing for landing page views utilizes users with a demonstrably low propensity, evidenced by the 0.61% conversion rate from landing page view to subscription.

Selecting a Stronger Signal

The most appropriate event for optimization in this scenario would be either sign-up or trial start. These events possess sufficient volume and provide a stronger indication of a user’s likelihood to convert to the primary metric – a subscription. The conversion rate from sign-up to subscription is a significantly improved 10.21%, compared to the 0.61% rate from landing page views.

The Importance of Testing

I consistently advocate for testing all available events, as unexpected results can occur. When conducting event tests, it’s crucial to establish a statistically significant baseline for informed decision-making. Furthermore, regular event testing is beneficial early on, as conversion rates can fluctuate with adjustments to other campaign variables.

Key takeaway: Focus on events that demonstrate a clear intent and a reasonable conversion rate towards your ultimate goal.

Optimizing Campaign Flows

Sometimes, the existing event sequences aren't ideally suited for effective paid acquisition campaigns. This is often observed with startups experiencing extended periods between initial conversion and subsequent actions. Consider Thumbtack, a platform connecting users with home service professionals.

A user might register on the app, submit a service request, but not actually engage a professional for several weeks. In such scenarios, modifying the user flow can significantly enhance the quality of collected data and improve campaign signals.

Implementing Flow Adjustments

To obtain a more robust signal, Thumbtack could introduce an intermediate step between request submission and professional hiring. This could involve a brief survey incorporating questions designed to gauge user intent and project urgency.

For example, the survey could ask users to rate the timeframe for needing assistance or the importance of their project on a scale of 1 to 10. This provides valuable data points for analysis.

After data collection, identifying a strong correlation between survey responses and project initiation allows for focused optimization efforts.

Data-Driven Optimization

As illustrated, users who respond with a rating of “9” demonstrate a 7.66% probability of converting. Consequently, optimizing for this specific event becomes a logical strategy.

Strategically incorporating qualifying steps into a more extended flow can effectively guide optimization targeting and improve overall campaign performance. This proactive approach ensures resources are focused on high-potential users.

Improving Signal Quality

Consider a scenario where your data flow effectively captures a substantial amount of event signal with minimal latency for optimization events. Even with this ideal setup, further improvements are often possible.

Numerous strategies can be employed to refine and strengthen the signal received. For instance, with Facebook, integrating connections like the Conversions API (CAPI) allows for more precise data transmission.

The Role of CAPI

CAPI facilitates server-to-server transfer of web events, bypassing reliance on cookies and the Facebook pixel. This approach proves valuable in addressing challenges posed by cookie blockers and users who clear their browsing data.

This is merely one illustration of signal enhancement. While a comprehensive review of all channels is beyond the scope here, each platform offers unique solutions to bolster the event signal it receives.

Optimizing signal is crucial for accurate tracking and effective advertising campaigns.

• Server-side tracking methods like CAPI improve data reliability.
• Addressing cookie restrictions enhances data capture.
• Each advertising platform provides specific tools for signal enhancement.

By implementing these strategies, marketers can ensure their data is as accurate and complete as possible, leading to better campaign performance.

iOS 14 Signaling

A discussion of mobile marketing in 2021 necessitates addressing iOS 14 and the strategies applicable to its expanding user base. While a dedicated article explores iOS-14-specific tactics in greater detail, a general overview is warranted here.

Achieving a key performance indicator (KPI), such as a purchase, within 24 hours of the initial app launch is highly advantageous.

This would generate substantial volumes of valuable, high-intent data, independent of the SKAdNetwork’s 24-hour event window. For many organizations, this may represent an ambitious objective.

Therefore, the focus should be on triggering an event within 24 hours that strongly suggests a user will ultimately complete the desired KPI. Consider the user journey and identify events that reliably precede conversion.

For example, if adding a payment method within 24 hours correlates with a 90% purchase conversion rate, then tracking “add payment info” would be a suitable conversion event.

The iOS 14 environment is continually evolving; however, this approach should remain effective in the near term.

The Importance of Incremental Gains in Growth Marketing

Regular incrementality checks are crucial within growth marketing strategies. These assessments provide valuable insight into whether advertising expenditure is genuinely attracting users who would not have converted without ad exposure.

This principle remains valid when evaluating optimization efforts. Focus beyond simply tracking costs per action; instead, prioritize the incremental lift achieved on each conversion event as the primary key performance indicator.

This article outlines methods for conducting efficient incrementality tests, even without extensive data science resources.

Maintaining a Competitive Edge

To consistently improve growth marketing campaign results, a continuous questioning of current optimization events is essential. Furthermore, a thorough exploration of all potential avenues for improvement should be undertaken.

Relying on the same optimization event indefinitely can hinder campaign performance. Experimenting with flow modifications and testing new events will position you favorably.

When refining user flows, consider user behavior and events from their viewpoint. What additional flow events might align with a segment demonstrating a strong likelihood of conversion?

Focusing on User-Centric Optimization

Understanding how users interact with your platform is paramount. Identifying events that correlate with high-conversion user segments can unlock significant improvements.

By consistently evaluating and adapting your approach, you can ensure your growth marketing efforts remain effective and drive sustained results.