When I joined Marketo three years ago, I had previous experience running paid search campaigns at a B2C company. However, I quickly realized that pay-per-click (PPC) campaigns for typical B2B products are very different from those for B2C.
PPC campaigns for B2B and other considered purchases typically have longer sales cycles, so marketers may not be able to prove ROI right away. Of course, we can tell how many conversions one campaign is bringing in over the others, but conversions don’t always result in sales. Over the next few months in my new role, I quickly learned how to leverage marketing automation and CRM systems to measure key indicators—from lead conversions all the way to sales data—to come up with baseline numbers and let the back-end data (opportunity and pipeline) help me drive my budget and optimization decisions. In this blog, I’ll share these insights with you so you can ramp up your PPC campaigns.
If you’re new to running B2B paid campaigns or just need a refresher, these four tried-and-true tips will come in handy:
1. Don’t Focus Solely on Conversions
In most B2C campaigns, conversions are important because they indicate how many people made a purchase. But when you’re running B2B campaigns, the circumstances are a little different. Lead conversions are normally an indicator of how many people filled out a form, downloaded gated content, or registered for an event, but because these actions are many steps away from an actual purchase, we can’t rely on lead conversions as the only guiding force.
Some of your keywords might bring in a lot of new leads, but you need to evaluate whether those campaigns and keywords are generating actual sales for your company. You will need to look at other important indicators like the demographic scores, leads scores, marketing qualified leads, and pipeline that each campaign is generating.
2. Don’t Allocate Budget Based Off CPA
B2B keywords can be a lot more expensive than B2C keywords. For example, a keyword like marketing automation or marketing software can cost you anywhere from $35–$70 per click. Based on the high cost-per-acquisition (CPA) of some keywords, it might seem like a good idea to reduce your costs by pausing or reducing keywords that are expensive and investing in others that are cheaper.
However, if the expensive keywords are the ones that are bringing in the sales (not just conversions), you need to make sure that you continue to invest in those keywords. Again, don’ let the front-end conversions like form-fills and CPA guide your decisions. You need to look at how much you can afford to spend on the keywords that are driving closed-won deals and base your CPA thresholds on those numbers. Instead, start thinking in terms of cost per opportunity or closed deals. This will give you the true ROI of your PPC campaigns so you can understand how to best allocate your budget moving forward to drive opportunities and sales, not just conversions.
3. Dig into Historical Data to Determine Your Conversion Rate
Take a look at your previous PPC campaigns to map the conversion rate from leads generated to opportunities generated. The conversion rate is extremely important because it helps you determine how many leads you need to generate upfront to generate X number of sales opportunities. Since there are drop-offs at each stage, this number will help you better estimate how many leads you need to generate from each PPC campaign.
For example, if you generate 2000 conversions, there might be a 20% drop off from leads to targets (i.e. new names), leaving you with 1600 leads—of which 40% of might actually be marketing qualified leads. In that case, you’re left with 640 leads, of which only 15% of these leads might turn into new opportunities. By calculating the conversion rate, you can estimate that your PPC campaigns need to generate at least 2100 conversions every month to create approximately 100 sales opportunities. This helps you forecast your goals and budget for the upcoming quarter.
4. Create Precise Ad Groups
If your PPC campaigns are not grouped in tight ad groups with closely knit keywords, it can be tough to optimize these campaigns. Broad campaigns bury expensive keywords in other less-costly keywords, which makes it hard to pinpoint its effectiveness. The best way to manage your costs is to create campaigns with similar themes.
For example, for the keyword digital advertising, you might want to create ad groups within the campaign that contain closely related keywords like digital advertising solutions and digital advertising tips. You can also keep your costs down by attaching a comprehensive negative keyword, which is a term that you don’t want to be included in the set of clicks that you’ll pay for, and setting up your campaign so your ad only shows up for an exact match search. By creating campaigns and ad groups with these distinctions, you can control your costs more easily and only invest in keywords that are bringing in opportunities and sales.
To accomplish most of the above, you’ll need to use a solution that allows you to easily look into your back-end data so you can make data-driven budget and optimization decisions based on the ROI metrics like sales opportunities, pipeline generated, and deals won. Certain marketing automation and CRM systems will sync this offline back-end data into your Google or Facebook campaigns, making your life as a B2B marketer a lot easier.
While there are many other things that you need to consider when you’re running paid search campaigns, these are some of the most important things that may not be as intuitive.
What other tips would you recommend? Comment them below!