Key Points: SaaS and Cloud Software industries are primed for at least a 17% growth this year. The top SaaS companies...
Hi, everyone! Today we’re going to talk about SEM for B2B and the lessons that we’ve learned from 40+ accounts.
One of the best parts of AdWords is there’s so much data available.
Key Performance Indicators
In this particular study, what we looked at:
- Cost per acquisition
- Conversion rate
- Return on ad spend
- Average search impression share lost to rank
- Average search impression share lost to budget
We think that these are critical KPIs for every AdWords marketer, manager, or even advertiser to look at. After learning from these lessons, we hope that you have some benchmark data to compare your own campaigns to.
Within these KPIs, we looked at the following AdWords channels:
- Retargeting for each of these
Now, in the actual spreadsheet, you can find all the data, pull it all apart, and look at it yourself — But for this, I want to dive into the key takeaways from our data so that you can see how you can apply it to your business.
Branded Search & Non-Branded. Keep Them Separate.
First of all, I was shocked at how much better branded search performs than non-branded — But not nearly as shocked as I am when I take over an AdWords account from another agency and see that they’ve combined branded with non-branded into their reporting.
If you’re managing an advertising agency or advertising for yourself, make sure you segment your branded search from your non-branded search in all of your reports so that you add transparency to the value you provide and do honest reporting.
For example, we saw that in non-branded search, the average CPA across over $1,000,000 in spend was $122. Conversely, branded search was converting at $33.
That’s a massive disparity. It’s critical to understand how each channel is performing so that you can make real decisions.
There’s a third type of search ad that people frankly aren’t doing that often. We call these RLSAs: Remarketing Lists for Search Ads.
You can show search ads to anybody who’s been on your website. So, it’s not quite branded — but it’s not quite unbranded. It’s somewhere in the middle.
We actually found that the cost per acquisition for RLSAs is $63.
The big takeaway here is that by balancing your non-branded with your RLSAs and your branded search, you can drastically lower your CPA without lying or fudging the numbers by combining your branded with your non-branded.
It’s okay that your non-branded search is more expensive. These are users that don’t know your brand yet. A lot of times there’s a lot of education that goes into this.
Remember, if you do the RLSAs, you don’t have to lose the value of that initial click if they don’t convert. That’s critical to the process.
One of the craziest takeaways from the data was that, display ads — which people have a tendency to just turn on as part of their checklist, like:
“Okay, we got this new account,” or, “Hey, I’m new here at this job. I’m gonna set up my search ads, then I’m gonna do my display ads.”
People mindlessly do display ads. Now, our data says, maybe you shouldn’t start there.
The reason this is so critical is that, most often than not, we don’t see accounts that have full search impression share on their non-branded search.
The average person has 50% to 60% search impression share. Meaning, if a 100 people search for your keyword that you’re targeting, you only show your ads to 50 or 60 of those people.
So, why expand into display if the data says it’s not as good? Use your budget more wisely to get a lower cost per acquisition from your RLSAs, retargeting, and even your branded search.
General Display VS Retargeting Display
When looking at display ads, we’re going to take general display versus retargeting display and separate them.
We found that the average display campaign’s cost per conversion was $187.
When comparing retargeting display to that of general display, we had such a better return on ad spend. In fact, we had a return on ad spend of 2.95%. That’s exponentially better than just general display ads.
What got really interesting, is that if you looked at the cost per acquisition from our general display campaigns, the average CPA was a $187. Conversely, the retargeting for display ads had a cost per acquisition of $64.
That’s a large difference, and it makes a big impact on your bottom line. As advertisers, we need to be incredibly careful of how we allocate our budget.
We have two more types of advertising we’re gonna cover from our Google data. One is shopping, and the next is video.
For shopping, we found that we had a positive return on ad spend of 1.6%.
We thought that that was pretty darn good. So, if you’re running shopping campaigns, that’s something to benchmark against.
Also, we saw a conversion rate, on average, of 1.33%.
These are just some data points that you can start to measure yourself against. Obviously, some clients, in some verticals, have a lot higher return on ad spend and others have lower. These are just averages, but something to keep in mind.
Now, video was a bloodbath. It was terrible.
We had a cost per acquisition of over $20,000 from video campaigns that were not retargeting. Unfortunately, the CPA for retargeting video ads wasn’t that much better. It was $2,250 on a cost per acquisition.
Now, obviously, these numbers could probably be improved. This is something for us to look at critically. But more importantly, I don’t think that the channel is as strong as some people think. And I would encourage you to look elsewhere with your dollars as a B2B company.
SEM for B2B: Lessons Learned from 40+ Accounts — Takeaways
In closing, there are some big SEM for B2B takeaways here.
- Search ads are exponentially more affordable from a cost per acquisition standpoint than general display campaigns. Be careful and cognizant of that when you’re allocating your spend. If you don’t need to be running those display ads because you don’t have full search impression share on your search ads, pause the display ads and increase spend on your search ads. That way you can start to get a much better return on your investment
- Every time we compared channels, retargeting outperformed the initial touch. Remember, if you’re running campaigns, make sure you have retargeting on, whether that’s RLSAs or even display retargeting.
- Maybe avoid video, for now, as we haven’t seen that channel perform quite as well.
Thanks so much for your time. If you have any questions feel free to put them in the comments below and don’t forget to subscribe. Have a great day!