Always Be Testing: Episode Summary

Title: Role of Thoughtful Attribution in Effective Marketing
Host: Ty DeGrange
Guest: Mike McElhenney, Chief Operating Officer at Round Barn Labs
Release Date: January 13, 2025

Introduction

In this episode of "Always Be Testing," host Ty DeGrange welcomes his longtime friend and COO, Mike McElhenney, to discuss pivotal elements in the realm of growth and performance marketing. The conversation delves into leadership philosophies, effective marketing attribution, experimentation strategies, affiliate marketing nuances, and future trends shaping the industry.

Leadership Insights

Mike McElhenney opens the discussion by sharing his leadership philosophy, heavily influenced by his background in team sports. He emphasizes the importance of teamwork, low ego, and high empathy in fostering a collaborative environment.

[02:11] Mike McElhenney: “I always tell people when I'm interviewing them or onboarding them that I've been doing this a really long time, but there's a lot of things I don't know and I would love to learn from you.”

Ty and Mike highlight the impact of influential books on Mike’s leadership style, notably "Captain's Class" and Jocko Willink’s "Extreme Ownership." These works have shaped Mike's approach to leading teams with accountability and a focus on collective success.

[04:04] Mike McElhenney: “These two books... really influenced the way that I approach things and the things that I preach to our team.”

Thoughtful Attribution in Marketing

A significant portion of the episode explores the critical role of attribution in marketing effectiveness. Mike shares his extensive experience with Meta (formerly Facebook) ads, emphasizing the evolution from manual targeting to leveraging Meta's machine learning algorithms.

[08:03] Mike McElhenney: “What I've seen a lot of people do wrong over the last couple years is to try to fight against that. You're not going to out-target the algorithm, it's just not an option anymore.”

He advises marketers to consolidate their targeting efforts and prioritize creative testing. Mike also discusses optimizing attribution windows to enhance the accuracy of conversion signals sent back to platforms like Meta.

[09:35] Mike McElhenney: “If you optimize it towards a seven day click and you're focused on click-through conversions, these are more incremental sales and you're driving new people to the website.”

Ty echoes Mike's sentiments, highlighting the common pitfalls of relying on default attribution settings and chasing non-incremental sales, which can skew data and reduce marketing effectiveness.

[10:35] Ty DeGrange: “It's shocking how often brands are literally relying on set it and forget it methods across the board.”

Experimentation Best Practices

The duo shifts focus to the importance of experimentation in marketing strategies. Mike underscores the value of landing page testing and optimizing for higher-quality leads, especially in B2B contexts where the sales funnel involves multiple steps.

[12:42] Mike McElhenney: “Those are the tests where I'm optimizing for something that's further down the funnel. If you're sending them the right signal, they'll continue to improve.”

Holdout tests are also highlighted as a crucial method for validating strategies and ensuring that new tactics stand up to scrutiny without adversely affecting existing performance.

[15:30] Mike McElhenney: “Holdout tests, whether it's an in-platform structured test or something you're doing separately, are always very interesting to me.”

Ty emphasizes the necessity of maintaining an agnostic and scientific approach to experimentation, encouraging marketers to challenge existing biases and rigorously test new ideas.

Affiliate Marketing Nuances

Mike shares his journey and insights into affiliate marketing, noting its vast and evolving landscape. He points out the diversity of affiliate partners beyond traditional content sites, including card-linked offers which have shown significant success.

[17:19] Ty Degrange: “You know, there's so much affiliate business happening there... a lot of technical and new partner types that I did not know about.”

Mike stresses the importance of a balanced affiliate portfolio to mitigate risks, likening it to stock trading where diversification is key to stability and growth.

[19:00] Mike McElhenney: “Kind of looking at it like stock trading essentially. If you put up too many eggs in one basket, you're subject to a lot of risk.”

He also highlights the immense scale potential of affiliate marketing when managed effectively, positioning it as a critical channel for growth.

Trends and Predictions for 2025

Looking forward, Mike anticipates continued economic strength bolstering business performance. In affiliate marketing, he expects attribution to remain a pivotal topic, with non-traditional affiliates gaining traction.

[22:44] Mike McElhenney: “Attribution is going to continue to be a very important topic and likely non-traditional affiliates are going to be key beyond content.”

Regarding paid marketing platforms, Mike is particularly bullish on Applovin as a rising contender, citing positive early results from prominent advertisers and its potential to diversify marketing budgets away from the "Big Three" (Google, Meta, TikTok).

[23:54] Mike McElhenney: “As a channel, I think Applovin has a lot of potential. I'm excited to test it for some of our clients as well.”

Ty concurs, noting the promising test results Applovin has delivered and its role in expanding the mobile ad platform ecosystem.

Personal Anecdotes and Light-Hearted Moments

Beyond professional discussions, Ty and Mike reminisce about their long-standing friendship, sharing memories like attending a memorable Giants game where JT Snow hit a grand slam, affectionately dubbed "the snowball game."

[26:50] Mike McElhenney: “We hopped in the Volvo, we drove to Candlestick Park, we sat in the bleachers. JT Snow hit a grand slam. The snowball game.”

They also exchange tips on family travel, with Mike advocating for organized planning using tools like Notion and leveraging AI for trip itineraries.

[29:37] Mike McElhenney: “I used ChatGPT to plan the trip. Couldn't book the trip, unfortunately, because the AI agents are not evolved yet.”

Conclusion

The episode wraps up with Mike sharing his favorite TV shows, expressing interest in the upcoming series "Landman," and a playful nod to their podcast's growing popularity.

[31:06] Mike McElhenney: “I've heard a lot of good things about Landman. It seems like the next really entertaining show.”

Ty and Mike sign off on an enthusiastic note, highlighting the value of their conversation and the bond that underpins their professional collaboration.

Key Takeaways:

• Effective Attribution: Trust platform algorithms and optimize attribution windows to drive incremental sales.
• Leadership through Empathy: Embrace teamwork, low ego, and continuous learning to foster a positive work environment.
• Balanced Experimentation: Utilize holdout tests and focus on high-quality lead generation to enhance marketing strategies.
• Affiliate Marketing Diversity: Diversify affiliate partners and balance your portfolio to mitigate risks and capitalize on scale.
• Emerging Trends: Watch for non-traditional affiliates and rising platforms like Applovin to stay ahead in the marketing landscape.

This episode offers valuable insights for marketers aiming to refine their attribution models, enhance team leadership, and explore the expansive potential of affiliate marketing. Mike McElhenney's expertise provides actionable strategies and forward-thinking predictions that can help businesses navigate the complexities of modern marketing.