I specialize in managing AdWords and PPC for high growth B2B companies, and that means that I spend a lot of time with B2B companies that have recently won a series A or Series B venture round.
Interestingly, there are at least 5 things that all venture-backed B2B companies have in common when it comes to AdWords strategy:
- High Cost-Per-Click (CPCs). There is no getting around it – CPCs are very high when it comes to venture-backed B2B companies. There are three main reasons for these high CPCs: (1) first, many B2B companies sell expensive products, which means that each sale is very valuable, and under Google’s auction-model for keyword bidding, you can expect prices to gravitate upwards, regardless of industry. This is also true in the consumer world for expensive products, such as automobiles and new homes, where CPCs are also very high. Second (2), if you are a VC-backed company, you are also competing with other VC-backed companies, and this hot competition is going to drive prices upward even more. And (3) volume is often very low in the B2B space. There are far more people using entertainment or consumer-oriented keywords than there are people looking for B2B or enterprise keywords, which again drives prices upward as companies bid on a small pool of keywords. The challenge is to keep things profitable even with huge CPCs.
- Tracking results and doing CPA calculations. They need to track everything, and measure results in great detail. This is because they need to be able to go back to their venture capitalists and tell them how much it costs to get each customer (cost-per-acquisition), and therefore how much they need to spend to hit their targets on time.
- Maximizing Growth. Generally speaking, a high growth B2B company is in a race with competitors — this means short term profit can be sacrificed for long-term gains. This doesn’t mean that you can spend any amount to win customers, but it does mean that you may sacrifice short term profitability to lock up the market. Typically, you don’t win a series A or series B round of funding if the VCs don’t think that you can “win” in a new category, which means that you need to execute much faster than the competitors.
- Multiple Attribution Models. Most B2B companies have a relatively long sales cycle. In the consumer world, someone might buy a product after seeing an ad once or twice. But in the B2B world, where there are strict budgets and multiple layers of approval, you need to anticipate a longer sales cycle, and therefore you want to know which ad brings a customer into the top of the sales cycle (awareness) and which ads bring customers into the bottom of the sales cycle (signing a deal). Using more than one attribution model let’s you do this.
- Connecting at least three data sources for analysis: almost every B2B company uses salesforce.com as its CRM. At this point, SFDC is the standard, and you need to make sure Google Analytics is connected to Salesforce.com. This is because Google Analytics is not permitted to include personally identifiable information (PII), and Salesforce.com is nothing but personally identifiable information. By allowing Salesforce to talk to Google Analytics, you can find out which keywords, conversions, ad types, etc., are related to actual deals that close. This means that you can tie AdWords activity to real revenue, not just clickstream data. And to make matters even more interesting, most B2B companies use a lead automation platform like Marketo, Hubspot, Eloqua, or Pardot. This means that the data needs to move between Google AdWords and Google Analytics, to a lead automation tool, to a CRM. If you do that, you’ll end up with a “closed loop system” that accurately measures the ROI of your AdWords program, and all of your other advertising programs.
There are lots of other things that are unique or specific to managing PPC for high growth B2B companies, but in my experience, these five are the most important, and the most universal. That said, email me or let me know if you think that there are other things that should be added to my list!