If you’re anything like most of the B2B marketers who I’ve talked to over the years, you’ve probably tried AdWords and concluded, “This doesn’t work for B2B!”
Don’t worry, you’re not alone. I met a CEO recently who had spent over $148,000 on AdWords… and produced nothing. All that spend and they didn’t close a single deal!
With results like that, it’s no wonder many B2B marketers are a little wary of paid search advertising. In fact, after reviewing more than 350 B2B paid search accounts, I’m inclined to agree. AdWords is an easy way to waste a lot of money.
But, all that being said, I also firmly believe that AdWords is actually an incredibly powerful platform for B2B marketing. All you have to do is avoid a few common mistakes.
Let’s take a look at each of these mistakes, how they affect your AdWords campaigns, and what successful B2B marketers do differently so you can put your B2B campaigns on the path to success.
Mistake #1: Targeting too Broad of an Audience
B2B marketing is very different from B2C marketing. This is especially true when it comes to paid search advertising.
For a B2C marketer, picking the right keywords is pretty easy and straightforward. You typically have a product or service that a lot of people search for and want to buy. In my experience, most B2C advertisers know their best keywords without doing any keyword research. Things aren’t quite so easy for B2B marketers.
B2B companies typically serve a much smaller market niche than B2C companies. That means far fewer people are looking for a B2B’s product or service. B2B customers use different keywords and they click on ads for different reasons than a potential B2C customer.
The problem is, most B2B marketers try to approach AdWords with a B2C mindset. They target keywords that appear to describe their business offering, create a few ads about what makes their business awesome, and then wait for the clicks to pour in. It seems like a decent approach, but most of the time, the clicks may pour in… but the sales don’t.
For example, remember the business I referenced at the beginning of this article that blew $148,000+ on AdWords? Over $50,000 of that spend went towards one keyword: “translate.”
At first glance, this keyword seems great! The business offers B2B translation services, after all, and “translate” gets 150,000,000+ searches a month.
But what percentage of those searches do you think are from people who need a B2B translator? Well, based on this company’s results, I’d say none.
Since most B2B companies operate in a small niche, bidding on broad keywords is simply a bad idea—no matter how much traffic those keywords may drive. To successfully market a B2B company on AdWords, you need to get specific.
To demonstrate how important specificity is in B2B paid search marketing, let’s look at a quick case study of a B2B company in the finance industry.
When this particular client came to us, they had been running AdWords for a while without much success. After looking at their account, it quickly became clear why: They were bidding on a bunch of terms that weren’t producing any value.
To fix this, we opened their AdWords account, clicked the Keywords tab and clicked on “Search Terms.” Next, we created a filter for “Conversions < 1”:
This allowed us to see all of the search terms that were leading to clicks… but not conversions.
We then took a close look at the keywords associated with those search terms, identified keywords with lots of wasted ad spend (like that “translate” keyword we were talking about earlier) and got rid of them (for more details on this process, check out this blog post).
Almost immediately after going through this process the client’s click volume started to drop.
At first, this might seem like a problem. After all, isn’t less traffic a bad thing?
Well, not if that traffic doesn’t have a chance of converting. Paying for non-converting traffic is just an extra expense.
And, if you notice, while our traffic dropped, our client was still getting about the same number of conversions.
As you might imagine, since we were no longer paying for useless traffic, our cost-per-conversion fell dramatically:
Simply by focusing our client’s ad spend on the keywords that were delivering results, we were able to get leads for under a quarter of the original price. Sure, traffic was down, but their marketing was much more profitable.
This tactic works well if you are already getting some results from your paid search marketing, but what if you don’t have an advertising history? (or you want to start bidding on additional keywords). What then?
In this case, the best way to start is to talk to your existing customers. Get them on the phone and listen carefully to the words they use to describe your product or service. Ask them what needs brought them to you and what they like about your offering.
In most cases, talking to six to ten current customers will tell you a lot about the words your target market uses to find your product. Try using the keywords suggested by your customers as the basis for your targeting. Then, once you have enough data, narrow things down to the terms that really produce.
Remember, when it comes to B2B advertising, it’s better to have extra-relevant keywords that deliver less traffic than less relevant keywords that deliver extra traffic.
Mistake #2: Using the Wrong Messaging
In addition to targeting the wrong keywords, many B2B marketers use the wrong messaging in their ads and landing pages. This is a problem for both B2C and B2B marketers, but it is particularly rampant amongst B2B companies.
Unfortunately, as a B2B company, it’s easy to assume that your potential customers care about your features. After all, your business exists because it recognized a need and created a product or service with features that met that need. The thing is, though, while your business has put enormous amounts of time and money into developing those features, your potential customers don’t really care.
They care about their problem.
So, when you create an ad that talks about all of your wonderful (and I’m sure they are wonderful) features, that ad doesn’t really speak to what your target audience cares about. Same goes for landing pages.
If you want your target audience to click and convert, your ads and landing pages have to address the needs and pain points that got them searching in the first place.
There are a couple of ways to approach this:
- Ask your customers! As mentioned previously, your current customers are your best source of information about what your potential customers are looking for. If your ads and landing pages talk about different topics than your customers do, you have a problem.
- Look at your account! The search terms people use to find your ads and the ads they click (especially the ones that have a good conversion rate) tell you a lot about what customers are looking for. If your ads and/or landing pages don’t really match the apparent intent behind your search terms, something needs to change.
Either one of these approaches (or combining both of them) can help you get your advertising on track, but no matter how you slice it, an effective ad and landing page is about your customers—not about your business.
So, take a deep breath, forget about your features and ask yourself, “What is my target audience really looking for?”
To highlight this point, let’s take another look at that client we just mentioned (the one with all the rotten keywords). Cleaning house boosted their cost-per-conversion, but our top keywords were still getting a lot of clicks from the wrong people.
The problem was, the client worked in the financing industry and offered a very specific type of financing. Unfortunately, even after optimizing their keywords, the client was still getting clicks from people interested in a very similar, but different type of financing.
Once we identified the problem, we realized that our copy wasn’t really focused on the specific needs of our client’s potential customers. As a result, it wasn’t getting enough of the right clicks and too many of the wrong clicks.
So, we tried creating new ads that directly addressed our target audience’s needs and pain points. The ads looked something like this (for client privacy, we’ll use car salesmen as our example):
After applying this strategy to the client’s ads and landing pages, we saw a dramatic improvement in campaign performance. In fact, the client is currently driving 9x more leads while only spending 48% more!
Mistake #3: Failing to Take Advantage of Your Lifetime Value
When most marketers (including B2B marketers) think of AdWords, they think in very linear terms:
- People search online and trigger your ads.
- Some of them click.
- Some of them buy.
If the value of a purchase is bigger than the cost of producing that purchase, a campaign is profitable. Otherwise, you’re losing money.
Now, all of this is true, but the hidden assumption here is that a new customer only buys once, which means you have to be profitable on the first purchase. Since you have to profitable on every purchase, you have to experiment carefully. After all, an experiment gone wrong can cost you dearly!
In terms of B2C advertising, this assumption is pretty reliable. After all, for an ecommerce business, the average transaction is worth $85-120. That means your advertising cost-per-sale needs to be far less than that to maintain profitability.
For a B2B business, things look very similar. Sure, the average sale might be worth a lot more, but the target audience is a lot smaller and the clicks are often a lot more expensive, so you’re dealing with the same basic problem, right? Well, not exactly.
Most B2B transactions are not “one and done” deals. A new client might only pay a few hundred or thousand dollars for their first purchase, but over time they can be worth anywhere from $10,000 to well over $100,000.
As a result, many B2B businesses can afford to spend a lot more on marketing to produce a sale. When you account for the lifetime value (LTV) of a new customer, even a customer who is unprofitable on the first purchase can be incredibly profitable in the long run.
For B2B companies, LTV breaks the first-purchase profitability equation. Instead of fighting to maximize AdWords performance within a tight profit margin, B2B companies can quickly conduct a variety of tests to see which campaigns, ads, and keywords produce the best results.
For example, last year we took on a new B2B client in the insurance industry that had no prior experience with AdWords. Their average customer was only worth a few hundred dollars a month, but they often used our client’s services for months-to-years.
At this point, we had a decision to make. We could either launch a very conservative campaign and try to stay within the first-purchase profit margin… or we could take advantage of their large profit margin and get things dialed in quickly.
We decided to go with the latter option and built out every campaign, ad, and keyword we could think of: 23 campaigns, 451 keywords, 139 ad groups, and 374 ads.
Here’s what happened:
Initially, the client’s cost-per-lead was over $280. As you might imagine, that was far from profitable in the first month, but it was okay in the long run and the experiment taught us a ton about our target audience.
Once we knew what worked and what didn’t we started cleaning house. We got rid of campaigns, keywords, and ad groups and changed up the client’s ad copy and landing pages to optimize lead flow.
In a manner of weeks, their cost-per-lead dropped to about $150 and by two months it was under $75. Their campaigns worked so well, in fact, that the company went through a tremendous growth phase and received millions in VC funding.
With a typical conservative approach, it might have taken us years to get to this point. Yes, it meant the sales weren’t immediately profitable, but thanks to their LTV, that didn’t matter and we were able to rapidly get the results their business needed.
So, to successfully use AdWords for B2B marketing, you have to stop thinking like a B2C marketer. Really, when you get right down to it, paid search is actually one of the most effective ways to grow a B2B business.
However, these three mistakes prevent most B2B businesses from taking advantage of the potential of AdWords. Believe it or not, that’s actually good news for you!
Odds are, your competitors are making one (or all) of these mistakes, which puts you in a great position to apply the tactics in this article and beat out the competition.