Most companies get the point. Digital ads are smart and measurable.
The more buyers, the higher price. What looked nice a year ago probably doesn’t anymore.
Actually, if you don’t understand the lifetime value of your B2B ads, your data-driven growth is looking at an insecure future.
But don’t fret just yet;
We have made a solid recipe for understanding the lifetime value of your B2B ads.
What you will get in this TL;DR post:
The reasons why B2B attribution often fails
Know how to fix and map the B2B buyer journey
Understand the lifetime value of B2B ads
Identification of which B2B ads to scale and to shut down
It’s rare that a business purchases a product from another business on sight. In fact, you could state that it never happens. Forget about it!
When you’re operating in a B2B world, you’re bound to struggle associating visitors on your website with revenue generated at a later point in time.
A B2B transaction takes multiple touches and impressions.
This makes it hard to justify spend on ads as well as other marketing activities, which results in a lot of B2Bs growing at a slower rate than what they actually could be.
Traditional digital ad platforms like Google, Facebook and LinkedIn can only help you to a certain level when it comes to understanding their impact.
Ad platforms can’t see every part of your business or understand the lifetime value of your customer.
It’s probably even fair to say they will never be an objective source of truth as to which ads objectively had the most impact.
The ad platforms are obviously doing what they can to claim their stake of attribution.
Yes, they can do math-heavy data-driven estimations and in some instances get closer to the truth. Still, it pretty much remains just that: math and guesstimations. And that is somewhat (too) weak for B2B marketers and growth people to act on.
In the end, when you aggressively scale your B2B ad spend as you want to continue to drive growth your companies growth, you end up suffering from diminishing returns of spending more money on ads:
Every interaction counts
The missing link for the B2Bs is a holistic data foundation. A data foundation that is able to describe a complex digital journey combined by user behavior, the ad performances and all the actions employees have with leads and customers.
There’s a reason we use the word holistic here.
We, ourself, have been in plenty of management meetings where each department claims their stake of the 100% revenue generated - and ending way beyond the 100% revenue generated.
Sales will claim 100% of the revenue generated.
Marketing might say: “Hey, we account for at least 40% of the revenue”.
The product people would discouraged claim 20%.
And support might be at a humble 10%, despite them being the ones that spends most customer facing time.
Now you’re at 170% revenue, while only 100% was actually generated (obviously).
Get the picture? Come on, guys. You can only count revenue one time!
Looking at just one department’s metrics doesn’t make sense for the higher purpose and performance of a business.
And vice versa: all actions and touch points, by every department, do matter. Every department.
If your support is made up of grumpy, lazy people, then good luck to the sales people in calling to sell afterwards.
If the marketing material is filled with spelling mistakes and clumsy design, then good luck selling high-tech to the receiver.
A brand is just one unified entity.
“I would tell myself that a brand is the sum of every experience a customer has with your company, and a strong brand will always generate long-term growth and revenue.
It's important to think about the entire customer lifecycle and relentlessly improve the interactions customers have with your company.”
(Ads) Credit where credit is due
Coming from a B2B marketing lead role, I have at times felt that it was “my leads” that were driving the revenue of the business.
Once we started to do deep dive analysis on the most valuable customers, it was clear that all bigger deals had been in touch with support and sales.
The point here is obvious.
Support and sales can do nothing without a steady influx of quality leads, and marketing will never be super profitable without strong customer relationships that continues to grow accounts over time.
So, where are we at?
Somewhere around: Profitable marketing that continuously provide quality lead for a company’s pipeline.
But how do you recognize profitable and quality in a B2B world, where first click and revenue rarely go together?
Profitable, meaning can you prove that you get the invested money back?
Quality, defined as doe the leads fit your ideal customer profile and generate strong LTV?
Attribution across the B2B chasm
You need something that connects the chasm. The chasm between a potential company’s first visit to your site and through the multi-stakeholder process until that B2B customer becomes a nice $-sign in your CRM.
To state the somewhat obvious, you need to start looking at:
When did we see this company the first time.
Not when did we see this person for the first time.
Let’s elaborate that a bit with an example.
Imagine that you’re selling hardware to a school. The ACME school have a council that decides together what hardware to buy. The council persist of a teacher, an IT-admin, a principal and a CFO.
The customer journey to get ACME school to buy could probably look like this:
The teacher is exposed to an ad on Facebook. Clicks it and finds your hardware interesting and decides to sign up for your newsletter.
The teacher then tells the IT admin about your hardware product and the IT admin does a branded search for your product, clicks the adwords, likes what he sees and books a demo call.
The IT admin, knowing he needs the ACME school principals backup to win over the hardware council, invites the principal to join the demo call.
The demo call showed that your hardware fit the exact needs of ACME school. The three together - the teacher, the IT admin and the principal - convinces the CFO to purchase the product during the hardware council meeting.
The CFO then goes directly to your website and ends up buying your product.
In B2B buying processes the torch switches multiple times.
If you’re following one individual’s actions, you’re probably doing it wrong.
When you sell B2B, you should think attribution as following a company’s journey towards purchase.
This means, when did we see this company the first time?
What are all the (digital measurable) actions that the company has taken on the road to becoming your customer?
A solution to fix this can look like this:
Everyone who comes to your website is given an anonymous ID.
This is set both in the browser and local storage to make sure it’s not lost.
We use Segment to do this.
The anonymous journey is stored in a database, awaiting a later association to a company.
When the anonymous ID at some point identifies themself, the user is associated to a company.
The ID event could be upon;
signing up to a newsletter,
purchasing a product
or perhaps logging into a service, both as the first from a company or by invite from a colleague post-purchase.
In some cases IP lookup through services like leadfeeder, ocean.io, clearbit etc. can make sense.
As the users are associated to companies, we start to join the individual journeys, to one joined company journey, to tell a story about key events:
When did we see the company appear anonymous on our website the first time?
When did the company identify initially?
When did they start paying for the first time?
What have lifetime revenue have made from this company?
When did the company end up churning?
Note: Some companies might be global enterprises where you could be selling to multiple departments at ones. In that case the method is a bit more insecure. If you deal with SMEs, you’re good to go.
This will connect your B2B ads journey. From an anonymous click to revenue noted in your CRM. That’s what you want if you want to understand LTV of your B2B ads.
A view from first click on Google, Facebook and Linkedin to the lifetime value of the journey your ads start: Where a company purchases a product from your company.
No more vanity celebration of ad campaigns that generated a lot of emails, but zero revenue. Your ads start to get focused on what drives true profitability, as the ads are connected to LTV.
Ultimately, it enables you to use paid ads as a channel to drive sustainable B2B growth.
“Since data is one of the key components for growth, I’m super enthusiastic about this new way to model B2B attribution.
At Growth Tribe we are facing the struggle of having a highly complex customer journey across channels.
We see this coming back with many of our B2B scale-up clients. Every time we dive into the customer journey, both with qualitative and quantitative data, we find that a variety of touch-points contributed to the end conversion.
Being able to view on account level the effectiveness of our content, performance and any growth experiment ran we can take our internal discussions to a higher level.”
The sad Adwords-math without brand searches
Honest performance marketers will tell you that the best way to hide your bad ad performance is to include branded searches in your client/business reports.
Branded keywords that drive traffic is nice. It means your brand is known and probably appreciated. If you see a surge in branded searches it’s probably even a sign that traction is picking up. The stuff you’re doing to create growth is most likely working.
That’s all fine and dandy. So far so good.
What branded keywords can’t give you is new traction and leads.
There’s not an unlimited amount of people searching for your brand. You quickly end up having bought all the traffic possible from searches on your brand name. Ie. like Segment is doing below.
So where do you then go to find traction?
You start buying Adwords traffic on keywords that are relevant for your business. The closer to a purchase of your product, the better, one might add.
As your desire, and perhaps pressure, to grow revenue continues to scale, you end up buying traffic on keywords further and further away from a purchase of your product.
Now it gets harder. The math doesn’t look as pretty anymore.
Perhaps you can still prove some return on investment. Perhaps you’ve moved to vanity measurements like emails gathered or something else.
With your new and clean database of revenue-related data you can do a bunch of awesome stuff.
One trick to tackle this challenge is to make a simple selection option to select whether you want to view all campaigns, only branded campaigns or only none-branded campaigns.
This discloses a lot of interesting insights.
You can expect that branded searches performs well. Very well, actually. A lot of companies get a 50 to 1 ratio back on their branded ads purchase.
Here’s an example of how your opinion will change on your ad performance as you peel away branded searches.
Note: Remember you have connected Google Ads to revenue recorded in CRM and not what can be read inside Google ads.
Blended ads: Here’s the blended ad performance. $1 spent becomes approximately $2 in Annual recurring revenue:
Brand ads: Now let’s go deeper and look at the branded search performance. Here you get the amazing $1 spent to $50 in annual recurring revenue. Amazing. Great brand performance:
Without-brand ads: But here we are at a less convenient truth, the ad campaigns without the branded keywords. Now the business start to lose more than 50% of every $1 spent.
The none-branded campaigns struggled to reach profitability as a whole. That’s to be expected, some would argue, along the lines of ‘spend money to make money’.
The smart tinkerer will then ask, which campaigns do actually deliver proveable revenue then?
To put a spotlight on this you can build an overview showing all Google ads campaigns.
The ad campaign overview pulled together insights from multiple relevant sources to present the insights a B2B marketer would need to evaluate ads:
Cost for the campaign
Cost per click
Cost versus attributed revenue
Attributable deals per campaign
Attributable revenue per campaign
You can go through an analysis of all your Google ads campaigns running to find the outliers and act on those.
What you want to understand in your analysis is:
What is the cost of the campaign versus what revenue has the campaign generated.
Green square in the picture:
What looked particularly profitable? And if particularly profitable, can we buy more traffic on this campaign? Can we do similar campaigns?
Red square in the picture:
And vice versa; What looks particularly not-profitable? Let’s shut it down! Is there a pattern here and how can we understand it?
Note: The attribution model you select, will naturally effect which campaigns ends within the green and red square.
As most marketers would admit, Adwords is a continued trial and error process. Set up experiments. See how they do. Learn. Try again.
Dreamdata.io can provide the missing link between anonymous adwords traffic and revenue noted in the CRM. This enables you to understand the profitability and lifetime value of your B2B ads.
Is this the all mighty B2B attribution truth and lifetime value of B2b ads then?
Obviously, even this method will never give you the perfect image of what goes on. For sure not.
There are multiple things that challenge the perfect tracking scenario. For example intelligent tracking prevention (ITP), users that switch cross-device and users jumping between several subdomains.
However, it will give you a data foundation from which you can make serious decisions on how to impact your business growth. The reason being that this data reflects every digital measurable bit of your company. It does not look at revenue generated from a siloed marketing, sales, support or product perspective.
The purpose of attribution should be to provide a data-foundation that you trust and inform you enough to make decisions that impact and drive true growth for your company.
Please let us know how you work with attribution to your B2B ads.