YouSaid · the spoken record

Jesse Pujji

lines on the record: 95
first: 2021-04-01
most recent: 2021-04-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I could do this. That's when oftentimes we'll say, hey, that's a good time to take a third party. And you'll typically see people go from spending a million dollars a year to like five to ten million a year in the second phase. And it's still typically pretty hustly. You know, that's when like they'll have 40% still going to one asset and they're just trying to get growing and scaling. And then they go into the like 10 million say a year or so 25, 30 million dollar business. And that's typically when an ambush will come in and we'll say, hey, you can take your 10 to 30 to 40 or 50, right? And but you can't do it the way you're doing it. You have to be rigorous about your testing. You have to analyze every single ad all the way to the end. Even think about retention as it relates to specific ads. Tie out that entire kind of data loop. You want to be very methodical about your testing and experimenting. You want to have a roadmap. You want to build all these things. You need full-time creative, full-time this, full-time that, and then scale the business to 30, 40 million in performance marketing and maybe a hundred million dollar business. And then I think oftentimes what we'll see, and I'll circle back and talk about the.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a great question. You know, there's stages that we see that different things tend to happen at that I think makes sense. And kind of our point of view, I think there's this is zero to five million in revenue businesses. And typically one of the founders has to own this and they have to get intimid enough to understand the economics of it and why it's working, why it's not. And we tend to recommend that either you find a former Goldman person or someone from finance teach them how to do this or find a consultant, but like you have to ingest that DNA early on in the organization to understand and build out. And yeah, you kind of mentioned this. We say third parties, they're good at pouring kerosene on the fire. They're not very good at rubbing sticks together, right? And entrepreneur has to rub those sticks together. And then once you're at a place where you're kind of consistently spending, say, you know, $100,000, $200,000 a month, so maybe you're $5, $10 million in revenue and you're looking to scale.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“And you got to keep tuning that thing to make it better and better over time. And it kind of goes back to again just to tie up some loose ends. Like if your funnel is massive and long and has tons of endpoints, dude, you can develop, you can get a lot of alpha out of that thing. The story of Quick and Loans and Dan Gilbert is all hearsay, but like what I've heard is the guy practically invented digital direct marketing, but it was a mortgage business. And he was going to the point where he would figure out where you were calling from. You were from Kentucky and he would route your call to a broker who was a guy from Kentucky. Right, to talk about alpha and like now you're going to get your mortgage from that guy. It's like your guy down the street, even though he's sitting in Detroit in a call center. So when you just think about the size of those funnels, they're significantly more alpha creation abilities where it's essentially outperforming the market in the same function. In the case of quick and loans, I mean, legitimately probably built into one of the largest, I mean, it's a crazy business, right? Super profitable. It's a commodity. It's fundamentally a commodity business. And yet there's just so much better.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think of it as a little different. We loved doing all these finance analogies to this stuff. Like, I actually think what we did in the early days of Facebook was arbitrage. I think we were early to an asset class that was like illiquid. People didn't realize the value of it. We did earlier. And gosh, dude, we made tons of money doing it, right? And then the beta of the market is like, oh, well, everyone does certain things in a certain way. They all target in a certain way. And if you just look at the beta margin, I can spend $20 on an impression. I can get this many clicks, this many conversions. I can tell you the average is the beta is like 0.7% on average across all of our stuff. And let's just say a percent and a half conversion rate. You could probably build a business. It's probably going to be pretty commoditized, low margin. You'll still make money, right? I mean, there's people doing that to the average. And then we think of alpha as anything you can do to beat those two numbers because it means that your tractor on the same plot of land is able to pull out way more crop than anybody else.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, if you're not getting better yield out of that real estate, another analogy I'll give is the farmland analogy. It's like, it's a piece, it's an acre of land. And if you don't get better at farming it to get more crop out of it consistently, eventually your yield and your margins are going to get the exact same thing on Facebook”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“And its own lands on the conversion page, and the product's $500 to buy, you're going to lose everyone, right? And so you actually have to mix those things together and then measure them together. And that ultimately, again, this is kind of a little bit of our playbook and secrets. But if you think about Facebook as a competitive auction of CPMs, when the price goes up of CPM, that's not Facebook. That's the market saying that the impressions are more valuable. And what that means is they're getting more ROI for every impression they're serving because they're willing to pay more for them. So if you're not able to consistently outbeat that market, your CAC is going to go up because the baseline cost is going to go up. And so a common thing we'll see with companies that are a little bit further along is they'll go, my CAC was 25 bucks for the last six months and now it's 40 bucks. It's all CPMs like Facebook's getting more expensive. And we go, show us the creative distribution between now and then. But you're spending 40% of your money on the same creative for the last six months. I go, yeah, but that's our winner. That's the thing that led us to the promised land. And you go, yeah, well, of course.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Thousand impressions you're serving on various channels. And what that does is it collapses the clicks and the conversions into one metric. And in some ways, you want to manage it that way, right? Because I'll tell you another funny ad I ran when I was 25 and building the business was go to class naked and online universities, right? And I was a woman holding herself. There was no nudity, but she was naked clearly. And, you know, she was like protecting. And dude, best click-through rate in the history of Facebook. 40% click-through rate. zero conversions, right? And Facebook banned it after like I spent $5,500 on it. They banned it that this doesn't fit within our content guidelines or whatever. It was like the early days of clickbait. I didn't even know what I was doing. But that's why you want to manage click-through and conversion together because part of your question of what makes good conversion is, is it a consistent experience? Do I get what I expect when I click on the ad is there something driving me to actually purchase this? Is it clear as to what I'm buying? And so you can be really, you can sell really hard up front with the ad.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the first thing you have to think about is what is the person, what action are they taking? So let me give you a huge range. Really bad is probably sub 1%. Really good is like above 10%. Now, it depends on what you're asking them to do. If you're asking me to fill out a form that I'm going to get paid on because I'm selling a lead to a university or mortgage business or something, then like those conversion rates tend to be in the like five to six percent range. But the ultimate conversion, right, which is to the revenue event is far lower than that because on the other side, I'm selling that and somebody else looks at that as media they're buying. They look at those. I'm going to buy a thousand leads from all these lead people and then 2% of them are going to become students for me. In a typical e-commerce business, you know, we would say, depending on the average order value and all that stuff, it's like one and a half to three percent. So if you're better than 3%, that's pretty good in conversion. The other thing relating back to the revenue event and the funnel increase was like this metric that we talk about called APM, which is acquisitions or sales.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like video versus non video has a major impact on Facebook in particular, the headlines matter a lot more. So first, you learn these different pieces of it. And then they each become individual variables that you're constantly testing and iterating against. A lot of this goes back to human psychology. There's urgency. There's that famous book, Influence. And I kid you not, we have people read it. When you get to a certain level at Ambush, we say, read this book. Do you have urgency? Do you have scarcity? Is there some kind of a deal you're getting from someone? And how does that flow into the ad copy that you're writing and the messaging that you're sending to a customer? And then there'll be different strategies people have against those specific influence variables or other types of variables, what competitors are doing. And then it becomes kind of like a product management thing. You just have like a backlog of things you want to test. How big do you think they're going to be? And you just run through them and start testing.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely room for what your brand stand for? Is it an irreverent brand? Is it a serious brand? It makes sense to think about who you want to be at a higher level. And then as you go into direct response marketing, again, because it's cheap, because it's fast, because of all those things, you often also say, I don't really know. And again, it's another form of customer centricity. Like, I don't know what's going to resonate with people. And that matrix example is like, do they care that it's cheap? Do they care that it's fancy? And so the role of testing experimentation is everything. The actual answer to continually compounding better economics in any marketing campaign is continued form of iteration. It's like the volume of tests you can actually run meaningfully in any given time period. And then obviously it's not just running a bunch of tests. It's learning every time you run a test. And so you start to learn very quickly what affects what the most. So you'll see stuff like does ad copy have a major effect, not as major. Does the creative and the format?”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in other words, if I came to you and I said, I can get you a thousand customers at a 50% margin, or I can get you 2,000 at a 40% margin, which will you take? You'll take the second one because your total profit goes up. So everyone is optimizing for those three variables and the scale of Facebook and Google and certain other channels like television are so much larger than these other ones that oftentimes we will do it with partners where we say it's better to figure out a new way of phishing inside of Facebook than to spend any time on Pinterest as an example.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“That has led to this rise of D2C and all these other things. Now, other channels have come about, and they've kind of drafted off of Facebook. You've got Snapchat, you've got Pinterest. Amazon is an interesting one for e-commerce in particular. Amazon will probably be the third biggest because of scale. And the big reason for that and the other ones, the reason Pinterest and Snapchat aren't quite there yet, is we call it the holy triangle of performance marketing. So the holy triangle is scale, so volume of customers, right? cost and quality or revenue. And the reason that's important, and this was a really important nuance that we learned early on, is in most industries you have a volume discount. I buy a thousand desks. You're going to give me a cheaper desk each time. In media, because there's space and there's less space as more people buy, that's one reason for it. There's a volume premium. The other reason for it is because people aren't optimizing to unit margin. They're optimizing the total profit.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sometimes people call them custom audiences, but really it's the Facebook algorithm starting to use the data they had about a person to serve them a much more relevant experience. And that just led to this dynamic where almost any marketer could make it work on Facebook and make it work at scale. And then the most crazy thing about Facebook is it somehow has become a brand and a DR vehicle. So you can still spend the 50 bucks to get going. But in order to make it work, what Google does not do, Google doesn't get you a lot of impressions. You search mascara. You're going to see a few ads. You're going to buy it. It cuts that funnel, right? You just go to the bottom of it. Facebook, a good campaign on Facebook, let's just say, is 10 million ad impressions of which 1% of the people click. So that's 100,000 people, of which 2% of those people buy. So you sell 2,000 subscriptions or whatever you're selling. That's like a great campaign. But what you get is the benefit of the customers and the 10 million impressions. And that, I think, is one of the many factors.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“The early days of Facebook were kind of challenging. People thought, hey, this may or may not work. The ads were on that right rail. They weren't in the newsfeed. And what really changed the game for Facebook was, not surprisingly, a bunch of who, what, when warehouse stuff, right? So the what, first of all, one of the most important things was they started putting ads in the news feed. The double what was they started putting ads on mobile in the news feed. Because remember, they didn't launch their mobile app until, I think, right around the time they went public. And then the who became less about their targeting tools and more about their newsfeed algorithm figuring out what a person wants and serving it up to them. To go back to your original question, like what's the last 10 years look like? It started with Facebook being kind of this little offshoot of Google. It could get you some DR for certain categories, daily deals, stuff like the education stuff we were doing, gaming. It worked for a few categories. Newsfeed, as got into the newsfeed, mobile launched, and then you started having like.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of eyeballs, and that's kind of started iterating, and there's a little bit of direct response pre Google, but not much, right? And then Google launches the idea that I'm going to search a keyword and then you're going to show me a relevant ad. And that was the first sort of game changer in direct marketing. And the biggest game changer was I could put a credit card up similar to like AWS now and all these other things. I can put a small credit card up. I don't have to talk to a person and I can start getting highly relevant customers to my product. And that was, you know, from 2000, whatever, three or four till even we started in 2010. I mean, Google, there was no Facebook. There was nothing else, right? And it was incredibly dominant and it affected almost every vertical. And it was just this amazing kind of form of marketing. But it was very different than anything that existed before it. And then Facebook came along. And honestly, Facebook in the early days, with the exception of people like us who were really kind of gaming their systems by targeting things very specifically like substitute teachers and showing the ad to 40,000 substitute teachers.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“You could either think of it as cutting through the funnel. So in one moment you become aware and desire, like you see this, you know, a little contraption that goes into your orange juice, so you don't have to open it and rip open the thing, like that classic friends, you know, example or some random thing on an infomercial. Or you could think of it as they just circumvent the top parts of the funnel and they immediately drive to action. So the marketing is built, and I think of it as revenue-based marketing, which is the way I measure success in it does it generate revenue for me. Whereas I think of it as, at least in the short term, do I get more awareness? And again, the disciplines are quite different. Brand marketing tends to be, it's bigger, they measure it, I would call it softer metrics. They might say something different about that, but like softer things, they're not, there's less accountability in that world. It's a little bit more like madmen. And direct marketing is this like more hardcore thing. But direct marketing used to be pretty hard before the internet came along. And the first step of online marketing was display marketing. So it was like banners and someone went along and they sold all the brand markers. They said, I can get your thing in front of town.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Typically, if you think about the marketing funnel, right, there's the IATA's awareness, interest, desire action. There's like 10 different versions of that, right? Theoretically, you can't sell something until someone's aware of it. You can't sell something until someone has interest. And so typically brand marketing is thought of as top of the funnel. I'm going to drive broad awareness and believe that if I enough people know.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“The local stores have massive sales. And so even television started more DR radio, but over time, they say when DR gets big enough, it just becomes brand marketing. So you're sending it to enough people. And so over time, we saw these things really develop as two separate disciplines for the most part. Brand marketing was tell your story, do it big. It has to be millions of dollars. And up until the internet, essentially, most of marketing was either huge dollars, massive brand, or even if you wanted to do direct response, it was like infomercials or it was like call centers. It was still stuff that cost you a lot of money to do something.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. Let me actually, I'll back up a little bit even further. I think most people don't even understand the history of marketing and advertising, and I didn't either, by the way, many, many years in before I actually asked myself that question and tried to understand it. There's some famous quote, I don't know who said it, where it's like, the only way to make money is to sell something or help somebody else sell something. The marketing and advertising business is one where you're helping people sell something. And it's an interesting trade where the platforms, you think about even back to newspapers, maybe that's start there, then radio, then television, they had attention and they were trying to sell attention and units of attention. They're the sellers of attention and their buyers are trying to buy revenue effectively. They're trying to buy, you know, they're trying to buy sales in some capacity. And so, you know, you had newspapers which classifieds were pretty direct response. People would open them up and look at things. I'm going to call in and that even white pages was a form of advertising that was pretty direct response oriented and television, you know, early on there's actually a funny story about PNG where they would launch television in cities and they would just see their”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“One channel. So if you want to get Facebook working 90 days, 50% of your time and that energy until, again, just like any business, you can dial up the spend every week if you want and you continue to get the returns that you expect you'll get and consistently get that. And then typically I tell people, again, then someone spends $50 or $100K a month on Facebook and they go, Jesse, I got to diversify. And I'm like, no, you don't need to diversify. I tell people until you're spending a million dollars a month on Facebook, then talk about diversification. There are ceilings like anything, like there are various ceilings and plateaus you run into in the path from spending 100 grand a month on Facebook to a million dollars a month. And oftentimes people will unknowingly plateau themselves because again, they get frayed in their focus.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Meet a lot of business people and entrepreneurs who they spent a year developing their product. I've developed a fanciest mattress. It has AI built into it. It can do all of these various things. Hey, can you give me an agency? And I'm just going to hand them this thing to do the marketing with it. And I kind of go, hold on a second. You spent a year plus developing this product and you're going to hand it to some seven person company where you're going to be their smallest client to start. They're going to give it to the intern's intern. And you think they're going to crack your marketing for you. It's like an incentives problem. And what I tell them is I say, I want you to spend at least half as much time as you spend developing your product on developing your unique marketing strategy. And to me in the beginning, it's a founder level thing. It doesn't mean the founder has to execute every little campaign. And my little rule of thumb is, and somebody taught me this too, is 90 days with more than 50% of your time and focus for the founder to crack any channel.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fridays and Saturdays because you think you're going to get lucky and then they crush on Sundays and Mondays. By the way, the other category that falls into that is jobs, right? And Friday, Saturday, you're like, I'm not thinking about my job. And Sunday and Monday, you have to go to job. And like, that's when the customer acquisition campaigns. And there's all kinds of different little when nuances of understanding your business and how a customer buys in your business. The biggest mistake people make is they try to do everything at once. And so the other reason it's important to do this is because you say, okay, yes, we can identify all the keywords you could ever buy. But we got to start with one thing and we got to make one thing work. Make sure one thing works economically sound. And it's almost like any investment strategy anyone wanted to write, which is like, I got to put some capital in and some capital has to come out. And if I can get that producing regularly without a lot of energy and effort, then I can go on to another channel or another set of strategies or another thing. I'll see a lot of companies. I'll come in and they're going, well, I've got this much SEO going. I've got a little bit of search. I've got some Facebook. The whole thing is really small and none.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know what I like about it is that it's super simple and super intuitive. Who are you selling to? What are you selling to them? Where do you want to reach them? When do you want to reach them? How do you want to? But then it can actually like a fractal, it can actually get very, very nuanced. And it can literally be the way you do like a detailed Facebook ad campaign. So it layers all the way into who I'm going to target moms between the ages of 30 and 32. Oh, wow. Or who the people who search this keyword. So you can bring it all the way down to this highly granular level. What can effectively be a conversation around creative strategy? What are you saying to these people? Are you telling this will save you money? Are you telling them it will make their life better? Are you going to show them a video of jumping cats? What exactly are you doing? What are you showing? What message are you showing to them? Where is like a channel strategy or what channels you want to use? When could be there's some businesses when weather is bad, they pick up or weekends. There's always these jokes like dating customer acquisition campaigns do terrible.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“$200 cost per click because one good customer there is worth millions of dollars whereas again mascaras Their games were so compelling and addictive, or whatever, and they monetized so well that when we worked with them, we had other gaming companies and we would just go, man, their economics are just, this is the easiest company to do marketing for, right? They make so much more money for every install that we generate that it's just easy to do marketing for them.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Story. So that guy aside, like, generally speaking, these are smaller dollar amounts. And so the economics are what then allow you in the marketing front. Well, I'll talk to companies and I say, you know, I sell $10 makeup. My average order value is $15. I'm going to start buying on Facebook. And I cringe and I go, eh, I don't know because Facebook especially is a marketplace, and this is an interesting split between Facebook and Google. Facebook as a marketplace is ultimately a cost per impression game that you're competing with everyone. And so lower AOV, lower economics, unless they make up for it with volume and velocity, they end up having a tough time competing in that marketplace against people selling mattresses or leads or universities or anything else. Google, on the other hand, every single marketplace of Google with keywords is elegant. You could plot it on a chart, right? Where you say, well, what's the cost of the product? What's the cost of the click? And it's pretty linear. So an auto keyword or the one everyone talks about is that form of cancer. Mesothelioma is 100% or”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Last variable, by the way, related to this, kind of we talked about time, we talked about number of events to optimize is, I would say, is economics of the revenue event. So remember, when someone pays for an online education, USC teaching, that's like a 60,000 or 70,000 dollar purchase. When someone buys gold in Clash of Clans, it's like a $10 purchase. Although one funny story aside is this is a little inside baseball, there was a guy in the UAE who was spending a million dollars a month on clash of clans.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Marketing firms in the world. And we're probably 10 to 15 percent better, right? And at times, as we've been 40, 50% better, and over time, it's gotten less because Facebook's gotten easier. But if you get really good at the funnel and the economics and everything that happens after that, you can become 100% better, 200% better. Length allows for that.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“You think about the long funnel of an online education or mortgage, I mean, we've seen situations where, gosh, the leads are good. They're coming in, but the sales team takes a week to call them. And guess what? It's too late. Those people have already made that spontaneous decision. They decided and they enrolled with another school that called them faster. And if you actually ever want to experience this, go to mortgage or go to an online education, fill out your information. And we joke that by the time your hand moves from the time you've hit center, your phone will be ringing. And because the most optimized companies know that that matters a lot, because in that moment you have that intention. So the more steps you have in the funnel, the more points of failure, the more points of optimization, it goes both ways, by the way, just to be clear. Like a gaming company can only be so much better than another gaming company. A long funnel can get significantly better, right? I mean, they can build massive advantage. And when you think about differentiation, building unfair differentiation, we tell people like Ambush is one of the best Facebook.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. To the second one. The first one, you know, there's really a bunch of variety of different ways it impacts the business. I mean, one thing is just knowing it. That's a funny one, right? Like some people go, no, hey, I just ran Facebook and I don't have any customers. And you're like, well, you know, buying a mattress is we work with a mattress company. It's very different. Someone takes their time to figure that out versus downloading a mobile app. The cycles are just important to understand and run your business on a cadence as it relates to that. The second thing that's most important is and relates to that is data feedback loop. Realistically, you can't optimize a campaign in a 90 day velocity period in a week or two. So the timing matters a lot. The other variables that are related to that, there's a bunch of them. So number of steps, right? Again, in the example, this is less about time and more about how many things have to happen, how much friction occurs before I make money. And the fewer number of steps, the easier it is to connect and optimize.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Originally, back to my story, I just told we didn't understand the funnel was an issue. We just said, let's buy some AdWords. Everyone says arbitrage keywords. And then we started spending money and realized it had nothing to do with the keywords we were buying it at everything to do with that landing page we were sending people to. And so that's a small example, but generally understanding that. And then, of course, the next step of any of these things is retention and understanding the economics of when someone does pay you the revenue event, how often do they pay you? And I oftentimes will tell early startups be highly conservative with your payback periods and the real, the best pro tip I give is like try to actually get a negative working capital model. So try to actually charge enough money on the acquisition that you'll make a profit because that's the other place we see people blow themselves up all the time. We've seen a legitimately a billion dollar gaming company go out of business because they're misprojecting their lifetime value and then it actually came to roost in the income statement and they didn't have money. Like they literally ran out of money. And so we say be very conservative, focus more on payback than lifetime. Lifetime value has a place, but generally when you're doing this early.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or any of these other things, someone sees an ad, and it's usually a very soft ad like, Do you want to have a higher income or do you want to think about buying a new housing, about refinancing? Okay, click here. You click, then you go to a website where you maybe read and do some stuff. Then you fill out a lead form. And that lead form gets routed to a call center. Then somebody calls you from anywhere from a week to 90 days. I mean, typically a maturation of leads is like 90 day process. And then you enroll. And then, by the way, there's even a funnel event between enrollment and start because they lose 20% of the people who enroll. They don't ever start. So the revenue event there is a totally different animal, one that has to be optimized considerably throughout different phases. And then e-commerce, it's slightly different. It's like in between those two. And that to me is the starting point because if you don't understand the economics and oftentimes a good example of, hey, I want to figure out my Facebook strategy. I'll go, oh, so tell me about how does your funnel convert? What? No, I just had Facebook strategy, Jesse. And I said, yeah, but Facebook will happily spend your money. And if you go back, maybe.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“They put their credit card in, and then they start paying you every month for that. So there's three different examples with different revenue events, but they all have different velocities and connection to the marketing cycle of it, right? So in the case of clash of clans, you look at a Facebook ad, you click install. I mean, the funnel is very short, right? And then a lot of it is you get into the game and then how do the mechanics work to get you to pay something? If you don't let them play enough, they won't buy it. But if you get them to play just enough, but the mechanics of tying that impression then to that monetization event, for example, something we found would be when you actually talked about the level or you prepped the customer for how they're going to get to the gold coin opportunity, that actually improved the entirety of that funnel. So entire economics shifted up in that funnel versus the traditional, which is like play now, play free, get you a lot of people in the front, but then maybe not doesn't monetize so much on the back. That's a very short funnel, and you can do a lot of testing throughout it and very fast. Contrast it with University of Phoenix or mortgage businesses.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“You think about retention and upsell and all these other things? And so let's think about a couple examples, right? If you're a supercell, Clash of Clans, the revenue event is the first time someone gets to the point where they're like, I want some gold coins because I want to go faster in the game. If you're a University of Phoenix, the revenue event is when someone writes their first tuition check. And then a typical e-commerce.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, absolutely. And I think there's probably three or four categories to start with, and then I'm going to dive into each of them. But there's this concept of, we call it the revenue event or the economics of the marketing that I always say you've got to start there. And part of that is because most of the biggest mistake I see most companies make is start talking about spending money on Facebook or marketing before they've understood the economics of their business itself. Yeah, I'll come back to that. The second one is kind of the strategy point, which is the who, what, when, where, how. The third one is thinking about actual call it channel strategy channels is Who are you trying to reach? What are you saying to them via creative testing, all those things they tie together? And then the last one is people, the actual organizational discipline, which as you mentioned is a relatively new discipline in the world. But backing up, we always say start with the revenue event. And what you find is that every business theoretically has a revenue event, right? They have a time when the cash register rings, as we like to say. That is the point. When you go backwards, you start to think about marketing strategy. And when you go forward,”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Our thinking, and if we were really great at this performance marketing thing, maybe we should be getting equity shares in the business, rev shares. Like, how do we use this platform to start to build and scale businesses? And so from there, we've done some M&A. We continue to have a big marketing services business and also invest in buying different things.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we go, well, Goldman Sachs does services like let's do what they do. Remember how we used to do recruiting? We went and just recruited from the top schools wherever we could get top talent. It's funny because our talent's been kind of a secret weapon for us, but we've recruited amazing talent. We'll train them on how to do this from the ground up. We taught ourselves, so we don't need an expert to tease in this. And that kind of set the wheels in motion to going from whatever that scale was to by 2015 having probably three, four hundred million in ad spend. And a lot of it was luck, a lot of it right place, right time, but our clients ended up being in 2011. Our vintage was like Uber, dollar shave club, supercell, which makes Clash of Clans one of the most downletted apps, Peloton, Blue Apron. I mean, just the who's who, because all of those guys at that same time were looking for customer acquisition help and Facebook became the first thing they did. So we just scaled this kind of massive thing and then in 2015 we sold a minority investment to this awesome company called Red Ventures who really taught us to expand.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Random companies like Ampush to one of the first two or three people on the partnerships API team. So she calls us, she goes, guys, why are you doing this lead gen stuff? Facebook is going to be big. I can help you guys get one of the first companies to get the access to our API, take all this manual stuff you've done and build a software and go build software and help people run Facebook ads anywhere. And so we had to go through this whole application process and pitched our product and how we would automate it and audiences and all this stuff. And then ultimately got that approval in early 2011. Went to work building that software. And just to fast forward the story a little bit, we built software. We tried to sell the software and everyone was like, what do you want me to do with this software? I don't know how to run Facebook marketing. And so they said, can you do services? And we said, oh, yeah, sure, services. And then keep in mind, we had no intention of being an ad agency or getting in that world, but our customers wanted services. We're bootstrapped, right? Our customers are investors. So sure, you want services, we'll get services. And then we look at each other. How do we build services?”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“We started getting $10 leads on Facebook. And it's like one of those moments where you pinch yourself, you look at you're like, all right, this real. And then the next week we get a call, USC person, we thought we're in trouble or something. She goes, these are like the best leads we've ever worked in our life. Like, can you get us more? And we're like, how many do you want? And literally like that euphoric entrepreneurial, we had one on a six-month phase of five guys in India. We're sending them spreadsheets. There's no automation. There's no bulk uploads. There's no APIs. You have to put every ad one-on-one into Facebook. So these guys uploading the ads and we're just going crazy realizing that we're so early to this Facebook thing generating massive margins. And as we looked at the end of 2010, we're run rating in the millions of eBit like 15 months in. And we get a call from Facebook. And actually, it's even more specific than that. We had gotten a woman who was our account manager. She had worked in performance marketing and Facebook had hired her. And she literally got her assignment changed at Facebook from account manager.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Firsthand, you don't know anything, you just have to keep testing. That was like one of our first big lessons, and the business was okay at that point, it was P&L positive, not really cash flow positive. And we had bootstrapped everything. This was like the three Wall Street kids took 33K each of their bonuses and put it into a thing and had 100K to start with a bunch of credit cards. That was how the business started. And then right around that summer, Facebook launched their self-serve ad platform. We were sort of the generation of Facebook. We said, oh, let's give this Facebook thing a try. And I like made the first ads. And literally I could tell you this minute what they were. It was for masters in teaching for USC. And the headline was sick of being a sub question mark and I put a little clip art of like a mean woman with like a stick like this looking a mean teacher and it said go back to USC and get your master's in teaching click here and I kid you not I mean this was maybe a few weeks into trying on Facebook I came up with that idea we were making 5% margins on Google so $50 leads we were posting us $40”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“It makes no sense to him, and he's a triathlete, incidentally, and he runs an eight minute mile. I'm living at his house, by the way. We're bootstrapping, I'm living at his house. He takes me on a jog, and I run a 10 minute mile, right? I'm probably like in that young 20s, a little overweight phase. And we're running at a nine-minute pace. He's just yelling at me. He's like, how did you not think of this? Like, what made you think you could just get into this industry and do whatever you wanted? And he just couldn't believe it. And I can't breathe, so I can't even respond. I'm just like trying to run and keep up. We went through a ton of iteration and honestly the way we ultimately figured it out was it was the week of my birthday in 2010. We literally got one keyword. We copied a competitor's landing page and we just said, okay, we're going to do exactly what that person is doing and see if the economics can work. And they did. I mean, it took us that was like three months in between the thousand dollar leads and that of trying different landing things. We tried really fancy landing pages that we thought were things and it turns out this demographic didn't want fancy. They wanted to, you know, we just learned.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's a $50,000 contract. Get me a thousand leads next month. That's kind of how the business started. And we started doing that on search marketing. We had built all these fancy keyword structures and using natural language processing, and we thought we were super smart. We'd worked at Goldman Sachs, and we launched our first Google campaign. And by 200 keywords, we thought we'd found all these unique keywords no one had figured out. And we spend 10 grand. And remember, we're getting $50 per lead and we get 10 leads. $50 revenue per lead and $1,000 cost per lead. And like the floor just dropped out from underneath us. I mean, we were.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because University of Phoenix, Kaplan, they were the largest digital marketing spenders at that time because of financial crisis, all these things were happening that the government was basically paying for it. So they said, oh, those guys will buy leads from you for $50 for prospective graduate student. And we did not realize how CD that industry was until we got into it. But at the time, we just said, okay, cool. We're going to find leads. And we went to our first conference because you had to go get these allocations from people of leads for tests and we find this guy named Alamed. He was the head of marketing at Kaplan University and we give him this crazy pitch. We're like, we're Wall Street guys. We're using algorithms. We're doing all this fancy stuff in marketing. And he's like, okay, you're brown. I'm brown.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“This is late 2009, early 2010 Know anyone, don't have any relationships. So, how do we get into digital marketing? Well, there's this thing called performance marketing. Netflix invented it, and they'll just pay you kind of like a bounty. They'll pay you $50 or $100 every time you get them a customer. You take all the risk and you make the margin. And we go, oh, arbitrage. That sounds familiar. Like, let's go do that, right? And let's go figure that out. We started to poke around and we said, well, and they'll always give you a shot. You don't need to have a relationship because it's just they just say, hey, if you can get me customers, great, I'll pay you. And so we went around and did that. And then the last funny part was we said, well, what's a good sector to do this? And we don't know. And at that time, if you remember, online for-profit universities were the big thing.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Which was we're not going to come up with an idea sitting at our desk in Goldman Sachs, but if we get in the sandbox of something, we'll figure something out. And so we kind of did it like nerdy finance people would pick a business idea. So we said, okay, we got it. Numbers are okay, online marketing, that works. Well, we don't have any relationships with anyone. We're 25.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, sure. I was not born a performance marketer. Frankly, I wouldn't have expected myself to end up here. Ten years ago-ish, I was working at Goldman Sachs. And I went to Wharton. And if you go to Wharton, Goldman Sachs is the goal of every Wharton kid. I got that ring. And my dad was an entrepreneur, came from India. I grew up around that. Entrepreneurship was what I thought I was going to do, but kind of said, man, I want to see what it's like to be an investor and learn about that. And, you know, I liked it, but I didn't love it. And I said, I want to love what I do. And so pretty much on a whim moved out west and said, hey, I'm going to start a business. And was as in love with the idea of starting a business as I was about specifically, wanted to build something, build an organization, a culture. And so I said, you know what? Let's bootstrap this thing. We don't want to raise an angel around and then have a gun on our head and burn money. We want to get something that can make money from early on. And we went around and talked to a lot of mentors and friends and they said, oh, you're good with numbers and data. Go look at performance marketing that you'll figure something out there. And we started calling it sandbox entrepreneurs.”
2021-04-01 · Invest Like the Best · Jesse Pujji - A Primer on Performance Marketing - [Founder’s Field Guide, EP. 27] · IDENTIFIED FROM THE TRANSCRIPT · source