As with so many digital marketing questions, the answer to this one is “It depends…” We don’t tend to recommend anything automatically, because we know every business has different processes, audiences, strategies, and goals. But there are definitely times when B2B pay per click advertising is a smart choice.
Challenges of B2B Paid Media
Because paid media generally motivates customers to buy products (or begin the buying process) directly, its value for B2C companies is obvious. However, B2B purchases can be much more involved, often requiring time, research, and approval from several parties. For this reason, many B2B marketing directors perceive paid search as a channel best used for brand awareness rather than revenue.
B2B companies in more traditional or brick-and-mortar industries, such as construction, tend to pursue direct-sales-oriented tactics such as direct mail and email, calls, and networking. ROI is often harder to measure for these companies due to their long sales cycles (many touchpoints) and smaller customer set (statistical significance issues). Furthermore, traditional companies tend to have low risk tolerance.
When B2B Paid Search Works Well
Paid search advertising can absolutely work for B2B companies, especially under these circumstances:
- Industry: When an industry has room for customer education, PPC advertising is an excellent choice to lead customers to on-site content aimed at top-of-funnel topics. Here, pay per click ads begin the customer relationship by providing value through education.
- Market: When a B2B company’s market is well-defined, paid search is an extremely efficient way to reach that market. If, for instance, your company provides legal services to the restaurant industry, your market is restaurant managers and owners, and we’ve discovered that they make excellent targets for B2B PPC advertising.
- Audience: Because paid media can be a numbers game, the larger the buyer audience is, the better. The ideal audience for B2B paid media is large enough to be broken into identifiable segments. For the company providing legal services to restaurants, the audience could be segmented by the type of restaurant (fine dining, fast food, etc.), the state where the restaurant is located (especially important for legal services), and many other ways.
The beauty of segmentation as a B2B paid search strategy is that ad performance gives you greater insight into the concerns and motivations of each type of customer, allowing you to target them more effectively in both ads and company offerings.
When B2B PPC Doesn’t Make Sense
Obviously, when the opposites of the conditions listed above are in play, paid search isn’t such a great idea for B2B. If your company’s target audience is small or your market is broad and spans lots of industries, your digital marketing investment would likely be better served by SEO.
Other conditions are not conducive to B2B paid media success:
- New startups: We would never advise a company that has just started up to use PPC advertising. That phase of company development is better suited to branding, strategy, and goal-setting.
- Extremely expensive paid media markets: Some of the highest costs per click are for B2B keywords; for instance, “business internet providers los angeles” has a CPC of $615! If a company gets just one click per business day for that keyword, it costs almost $13,000 a month – and none of those clicks are guaranteed to turn into a lead. If your business is in such an expensive paid media market, there are much better ways to market your company online.
- When paid media strategy, goals, and spend are unclear: Whether for B2C or B2B, paid search parameters must be well-defined. We value our clients’ investment far too much to allow “let’s see what happens” to guide our PPC efforts. Murky strategy, vague goals, and highly fluctuating ad spending lead to results that are sub-par to say the least.
How to Make Paid Search Work for Your B2B Company
If you’ve determined that PPC is a good fit for your company, set yourself up for success by following these essential guidelines:
- Understand your industry and audience: This is an ongoing process for marketing directors and CMOs. Industries, markets, business structures and models all change over time, as do audience priorities, needs, and wants. If your most recent marketing research is more than 3 years old, be sure to conduct fresh research before approaching paid media.
- Use data to find opportunities: One of the best ways to get the most out of your paid search is to get a data-based understanding of the paid search landscape. We run projection models for many of our clients to identify gaps in the paid search market where they could capture more customers by standing out from their competitors.
- Aim for the “middle ring of the bullseye”: As discussed, B2B keywords can come with a very high per-click price tag, especially if they’re specific to a need or market. Less specific keywords can have much lower costs but are less likely to appeal to your target market. The “sweet spot” is the middle ground, where there are many relevant, if not perfect, keywords at workable bid prices.
- Track performance end to end: The ultimate goal of paid search isn’t to deliver more clicks or even more conversions; it’s to deliver more revenue. Before embarking on paid search, ensure your tracking systems can follow conversions from ad impressions through income from sales.
- Measure the metrics that matter: Obviously, this includes bottom-line metrics such as revenue and return on ad spend (ROAS). But it can also include metrics that apply to the specific goals you have for your company’s paid search, such as on-site engagement for ads promoting content, viewable impressions for brand awareness campaigns, or form fill abandonment rates for lead-generation efforts.
Making Paid Media Work for B2B SaaS
One of our B2B clients, a communications-based software provider, had tried paid search but found the results disappointing. Their costs per lead and per MQL were unacceptably high, and the client was thinking about abandoning paid media altogether.
We took on the challenge of making paid search a robust marketing channel for the client, and applied the principles listed above. We rebuilt the client’s paid search account and reinvigorated their remarketing activities. The results were astonishing:
- Average monthly paid media leads increased by 495% and average monthly MQLs grew by 1,237%
- Lead quality, as measured by the ratio of MQLs to leads, improved from 28% to 62%
- Average monthly cost per lead decreased by 44%, while average monthly cost per MQL decreased by 75%
If those results sound appealing, let’s talk about your B2B company and how well paid media could work for you.