There’s no question about the effectiveness of Adwords both in B2B and B2C environments. More than 90% of Google’s 100 billion dollars revenue comes from advertising and especially Adwords, and on average, a business make 100% profit for every dollar invested on Adwords.
However, in a B2B tech space, AdWords can be extremely expensive: the search volume is on average, lower than in the B2C environment and yet the competition is extremely high. As a result, the CPCs can be very expensive and volatile.
So, a B2B tech business should be careful in implementing an Adwords campaign: although the average result is high, if we are not careful, we can lose money on ineffective and expensive Adwords placement. With that being said, here are some important best practices on implementing Adwords for B2B tech companies:
Measuring LTV to make a proper budget allocation
In implementing Adwords, B2B businesses actually have a huge advantage over the B2C counterpart: in a B2C business, the average transaction is much lower. According to Statista’s report, the average B2C e commerce transaction is around $100.
So, to get $100,000, you will need 1,000 customers (let’s neglect repeat purchases to make the calculation simpler). Since AdWords’ cost is based on the number of clicks (CPC), and with the average conversion rate per click being 2.7% for search ads, you will need to get, on average 37,000 clicks before getting that $100,000 in revenue. Let’s assume the CPC is $1, and so you will need to spend $37,000 to get $100,000.
On the other hand, the LTV (lifetime value) of a B2B sale can be much higher. If you are selling a SaaS product worth $100 a month, and let’s say the average customer will subscribe for a year, you will get $1,200 from just one customer. You only need 83.3 customers to get $100,000 in one year. With the same assumptions used above ($1 CPC), you only need to spend around $3,000 in Adwords to get that $100,000.
Of course, we ignore other important details like profit margin, production costs,etc. for now, but you get the picture: you simply have more room, budget-wise, in a B2B space.
With that being said, properly calculating your LTV is very important here, so you can maximize your Adwords budget allocation.
While the method to calculate LTV can greatly vary depending on your business model, the simplest way to calculate lifetime value is:
LTV= 12 months x the average revenue per customer per month x the average customer lifespan
For example, if you are selling a software worth $99 and on average you have 100 subscriptions a month, your average revenue per month is $9,900. If on average, your customers will stay in business with you for 2 years, then your LTV is: 12 x $9,900x 2=$237,600 per year.
What will this number mean? If your current profit margin is, let’s assume, 30% ($71,280), you can, for example, spend $21,280 on Adwords to keep a $50,000 profit. Obviously we can expect an increase in revenue— and profit— , and in short, you can get a lot more with your AdWords if you properly calculate your LTV.
Targeting is everything
The key is optimizing AdWords cost-efficiency is proper targeting. However, targeting in a B2B space can be complicated: in a B2C business, it is generally easier to determine the keywords that produce results, but this can be more difficult in a B2B space, as the specific short-tail keywords can be really expensive. On the other hand, long-tail keywords that are superficially related to your brand often don’t bring any value at all.
With that being said, here are several best practices you can do in implementing proper targeting and keyword research:
Setting up negative keywords
In a nutshell, negative keyword is preventing your advertising from being displayed when these keywords are being searched. So, by defining your negative keywords, you are only showing your ads to those with relevant intent, those who are the most qualified to convert.
There are generally three types of negative keywords:
- Broad match: Google won’t display you ad when ALL of your negative keywords are present.
For example, if your negative keyword is “Apple iPhone”, the ad will still be shown when only “apple” or “iPhone” is being searched, but not when both queries are in place.
In this type, the order doesn’t matter, so if let’s say, the search query is “is the iPhone made by Apple” (notice the different order of the phrase), the ad will not show.
- Phrase match: here, all of your negative keywords must be present in the correct order.
So, if we are using the same query, “is the iPhone made by Apple”, this time the ad will be shown, but Google won’t display the ad when queries like “buying Apple iPhone” (exact phrase order) are in place.
- Exact match: with this type, the ad will not be shown when ALL your negative keywords and in place, in the exact order of the phrase, and there are no extra words involved.
So, in this case, the ad will still be shown for the “buying Apple iPhone” query, and only the “Apple iPhone” query won’t show the ad.
In implementing negative keywords, there are two main exclusions to consider:
- Non-relevant queries: for example, if you are selling Ford Mustang, you should filter out keywords related to mustang (horse).
- Unqualified traffic: here, our mission is to filter searches from those who are not qualified to convert. This will help minimize your clicks, and thus, your costs. For example:
- discount/freebie hunters: include keywords like -free, -cheap, -bargain, and so on
- review seekers: -reviews, -rating, comparison, and so on
- learners: -learn, -tutorial, etc.
- job seekers: -hire, -jobs, -job, -occupation, etc.
Some additional principles in implementing negative keywords:
- Use keyword planner tools like Google’s own Keyword Planner, SEMRush, and Ahrefs among others to determine recurring queries that aren’t really relevant to your business. Include these queries as negative keywords.
- Understand your audience’s search intent in relation to their stage on the buyer’s journey. Only display your ads for queries with relevant intent. For example, if you are focusing to drive more purchases, focus on queries that include “buy” or “purchase”. Similarly, if your goal is to get more free-trial registration, adjust your negative keyword list accordingly.
Analyze and challenge your competitors’ keywords
Analyze how your closest, and especially biggest competitors are approaching their AdWords. Chances are, you can find opportunities by analyzing these competitors, or at least learn something from it.
Here are some common (and effective) approaches you can do:
- Target the same keywords (or their close variants). However, if you are not careful, this approach can be expensive as you will effectively increase the CPC by outbidding each other.
- Target “comparison keywords” like “brand X vs (your brand)”, “ (your product category) comparisons”, “brand X alternative”, and so on. Remember to analyze your user’s intent and your ad goals when using this approach.
- You can actually bid on your competitors’ brand names, but you can’t use their brand name inside your ad copy.
- Whatever your approach is, make sure your content is relevant to the search query. Or else, your ad can be reported and then removed.
Optimizing landing page for conversions
Remember that you are spending money every time someone clicked on your ad. So, we will need an optimized landing page to maximize the chance of conversions. Highly optimized landing page can lower your cost of conversions, an art we call Conversion Rate Optimization (CRO).
This can be a pretty broad subject on its own, but there are several key principles to follow:
- Content is king, and there’s no shortcut around this. Make sure your content is relevant to your ads, and is valuable for your audience according to their intent. This can be a pretty broad subject. Refer to our previous guide on content marketing here. (link)
- A huge aspect of optimizing your landing pages is optimizing your CTA buttons from its positioning to quantity to design. If your CTA is well-optimized, you are halfway done.
- A powerful headline always helps in optimizing conversions. You might want to check out this guide by WordStream on optimizing headlines for your landing pages.
- Include relevant social proofs on your landing page. You will need to find the right balance between selling and informing here.
- The landing page design and thus, user experience, matters a lot. Make sure it’s well designed, interesting, and comprehensive.
- Don’t forget optimizing the technical aspect. You might want to check out this guide on optimizing various technical areas of your landing pages.
Optimizing your landing page can be a long, arduous process. If necessary, hire the help of a professional. While hiring a professional web designer can be costly, it can save your money in the long run by maximizing the ROI of your AdWords campaigns.
Implementing remarketing to maximize ROI
AdWords remarketing, in a nutshell, is displaying your ads to people who have visited your site or have triggered a specific action. Google does this by placing a tracking code on your site, which can place cookies on your site visitors’ browsers.
So, the main benefit of implementing remarketing is you can improve your AdWords campaign’s targeting, which will translate to a better cost efficiency and higher ROI.
Remarketing can be a fairly deep subject on its own, and you might want to check our previous guide on remarketing.
However, let us discuss a few different remarketing options available with Google AdWords:
- “Standard” remarketing: with this, you can display your advertising to past website visitors. Your ads will be shown when they are browsing sites and apps on the Display Network
- Mobile remarketing: showing your ads to those who have used your mobile website or app. Your advertising will be shown when they are using other apps or browsing mobile sites.
- Dynamic remarketing: showing your ads to those who have viewed specific products or services on your site
- Search remarketing: also known as Remarketing List for Search Ads (RLSA). Similar to standard remarketing but for Search Ads instead of Display Ads
- Email remarketing: you can upload your email list to AdWords, and your ad will be shown to those on your email list.
There are also newer features that will give you even more flexibility, especially the ability to remarket your ads to those who have visited a specific site (including your competitor’s), as well as the ability to show display ads to those who have searched for certain keywords. The latter is more cost-efficient than implementing search ads for competitive keywords, and is worth trying if you are looking to maximize ROI.
When implementing remarketing, there are two main principles to consider:
- Always aim to deliver relevant value
Every time you show a remarketing ad, there is a possibility that the same audience have moved into different stages of the marketing funnel. So, show a different, relevant message according to their previous interaction.
For example, if the audience abandoned a shopping cart, you might want to offer them a discount or free-trial. If the user frequented your content page, you might want to offer them a downloadable in-depth content in exchange of their contact information.
- Timing is everything
The key to remarketing success is the right timing and frequency: bombarding the audience with the same ads for 30 days straight can be annoying, and you might lose them instead. Fine-tune your remarketing ad frequency and alternate different messages, designs, and content.
The issue about AdWords, including in the SaaS industry, is generally not about results, as proper AdWords placement will virtually guarantee fast and significant results. Yet, the issue here is about cost, as AdWords campaign can be really expensive. So, it’s quite often we end up losing money although the campaign is generating results.
With that being said, in this guide, we have mainly discussed how to maximize cost-efficiency of your AdWords campaign. The better you understand your audience, your niche, and the available tools, the better you can optimize the cost and thus maximize ROI.