Like fishing, refining your AdWords campaign takes time and patience. Columnist Jacob Baadsgaard outlines his process for catching big leads in B2B.
I love to fish. Over the years, I’ve enjoyed many excellent fights and satisfying catches, but I’ve also spent days staring at my line without so much as a nibble in reward.
On those days, it can be pretty tempting to give up and assume, “There are no fish in this river!” Of course, it’s harder to make that accusation stick when the guy 100 yards downstream seems to have fish after fish on the line.
As much as I hate to admit it, the problem usually isn’t the fish — I’m usually fishing the wrong way.
My experience with AdWords campaigns has been very similar. B2B companies I work with often insist that “there’s no money in AdWords.” I can’t really blame them for feeling this way. I mean, I recently audited a B2B company that had spent $150,000 on AdWords without a single sale to show for it.
But the question is this: Is the problem AdWords, or are you simply using it the wrong way?
If your experience with AdWords has been similarly unsatisfying, it may surprise you to hear that most of my B2B clients get the majority of their leads and sales from AdWords. To put it simply, there’s money in AdWords… if you know how to catch it.
As a veteran B2B angler, here are a few tips you can use to “land a big one” (and keep landing big ones) for your company with AdWords.
Stop using power bait
At this point, you may be thinking, “Sure, AdWords is like fishing… you catch a lot of small fry! But I’m in B2B, so I don’t care about small fry. I’m looking for the white whale!”
It’s true. B2B businesses are much more niche than B2C companies. And there aren’t a lot of people interested in your niche, so there may not be a lot of searches for your keywords.
However, that doesn’t mean that AdWords is a bad fit for your business.
Being niche means that your keywords can be incredibly specific. You might not get a lot of search volume, but you know that anyone who uses your keywords is probably interested in what you’re selling.
In other words, don’t use power bait to fish for a Great White shark. If you use the right keywords and ads, you’ll only catch the eye of your ideal audience.
For example, say you sell shoes online. You bid on the keyword “shoe” and get a lot of clicks. Obviously, this isn’t as good of a keyword as, say, “buy new shoes,” but you feel pretty confident that 99 percent of your clicks come from people who own a pair of shoes and will have an interest in buying shoes at some point in their lives. It might not be the most high-intent search query, but it gets you in front of the right audience.
On the other hand, what if you manufacture shoes, and you’re looking to attract new distributors? Does the keyword “shoe” still work?
Sure! And, if you bid on it, you might get just as much traffic as the shoe retailer. But how many of those people would have clicked because they were looking to become a shoe distributor?
Remember that company that wasted $150,000 on paid search? This was essentially their story.
In an effort to drive leads for their B2B translation service, they were bidding on the broad match keyword “translate,” which gets over 150,000,000 searches per month.
This broad keyword drove a lot of traffic to their site, but (unsurprisingly) most people searching with the term “translate” aren’t looking for a B2B service. This one keyword cost them $60,000 and didn’t produce a single sale.
Getting a lot of traffic isn’t the point. Getting the right traffic is.
Find the hungry fish
So, what do your potential B2B clients actually search for?
The answer may surprise you: B2B customers don’t search for products, they search for problems.
To be more precise, people are searching for a way to resolve their business’s pain points — issues they can’t resolve on their own. It’s only when businesses are in pain that they go searching for another company’s help.
Your job is to show them that you have the solution.
Rather than concentrating your ad campaigns on lists of product features and identifiers, focus on finding your market’s pain points and customize your ads and landing pages to address these directly.
Choosing the right lure
“But Jacob,” you ask, “what if I’m not sure what my market’s pain points are or what search terms they’ll use to look for a solution?”
This is where another key difference between B2C and B2B companies comes into play: your customer lifetime value (LTV).
Using your LTV
In general, most B2B customers have a much, much higher lifetime value than the average B2C customer. For example, the average e-commerce transaction is worth $85 to $120. Even accounting for repeat business, you might make $250 per customer. Factor in a 50-percent profit margin, and your cost-per-acquisition (CPA) needs to be less than $125 just to break even.
In contrast, the average LTV for a B2B company can range from $20,000 to over $200,000+. Even if you only make 10 percent profit after your fixed and variable costs, you can spend thousands on advertising to close a sale and still make money!
Perfecting your cast
Perfect AdWords campaigns are almost never born perfect. Instead, they are refined through experimentation, gradual learning and a little trial and error.
If you’re a B2C company with a profit margin of $150, it can be difficult to survive this learning process. On the other hand, if you’re a B2B company with a $50,000 profit margin, then a single sale more than justifies the R&D required to perfect your advertising.
This R&D process has three phases:
1. Experimental phase
Start by trying the search terms you think will work (This may just be your current campaign). Allow yourself to be a little generous in your keyword selection — you’ll soon be weeding out the failures.
2. The purge
Give your market enough time to react to your campaign, then get on AdWords and pull up a Keyword report for the experimental period. Filter your results to show keywords with greater than two percent conversion rate (or whatever you feel is sufficient).
If a keyword doesn’t make the cut, stop spending your money on it! This may result in a surprisingly large downsize of your campaign — and that’s okay.
After auditing over 2,000 accounts, I’ve learned that in most cases 100 percent of conversions can be attributed to about six percent of an account’s keywords. The other 94 percent of unproductive keywords eat up around 61 percent of your budget, so eliminating this wasted ad spend can make a big difference to your business.
3. Refining phase
After you have cut out the unsuccessful terms, use your winners to identify other keywords that you may want to add to your account. The higher your conversion rate, the more likely it is that you’ve found a pain point for your audience.
You can also use AdWords to see what other search terms a person was using when they found your site. If they make sense, add search terms with a lot of conversions as keywords.
Finally, once you know who your customers are and how they find you, start customizing your ads and landing pages to turn clicks into conversions and conversions into sales.
If all this seems like a lot to take in, let me put it all together in a real-life example.
Last year, we started running Adwords campaigns for a B2B company in the insurance sector. We knew the company would be profitable if their advertising cost them $150 or less per lead, but as this was their first time with AdWords, we also knew that we’d need to invest in some initial experimentation. We felt comfortable with this investment, since we knew that the company had a long-term profit margin of $1,000 to $10,000.
To take advantage of this situation, we launched a two-week blast campaign using all the keywords which, based on a study of the market, seemed like likely winners. This campaign resulted in a lot of clicks, but only moderate conversions, with a $250 cost-per-lead (CPL).
Short term, this was unprofitable for the company, but it gave us the data we needed to identify several highly profitable keywords. By using the best keywords and dropping the rest, the number of total clicks went down, but the number of conversions remained about the same. This chopped our CPL in half!
As you can see, we continued to track and refine the AdWords account over time and initiated a killer landing page strategy. Clicks and conversions rose together, which let us know that we were hitting the right pain points and getting more of the right traffic to the site.
In a short space of time, the profits from this AdWords campaign redefined success for the entire company. As a result, they have gone on to receive millions in VC funding!
This story isn’t unique to the one company — it could easily be yours.
AdWords can be one of the best tools to grow your B2B business. Like an experienced angler who learns the best spots to cast, flies to tie and times of day, with some patience and experimentation, you can turn what initially looks like a money-sucking mudhole into an extremely profitable investment.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.