Advertising has changed a lot over the past 20 years. Large corporations that used to pump all their advertising dollars into radio, television, and diligently researched billboard placements are now pumping those same funds into digital advertising.
In fact, current research shows approximately eight out of every 10 dollars invested in advertising in the U.S. is devoted to digital advertising – and that amount is only expected to grow, with internet advertising projected to reach $200 billion by 2025. With B2B (Business-to-Business) companies alone, digital ad spend is projected to grow to $18.5 billion by 2024.
And all that money being pumped into the digital ad space is working. Google PPC in particular has one of the highest reported ROI rates, citing an average ROI of 100% for companies that use it.
BUT it’s not all positive. While some companies earn 100% ROI from PPC, for others, it’s failed miserably and ended up costing them more than it has earned.
The truth is that some business models are just more conducive to success with PPC. So which B2Bs benefit the most from PPC and which ones don’t? Here are our thoughts:
B2B Businesses That Benefit the Most From PPC
1. B2Bs that have high margins – With businesses that have high margins, it only takes a few quality leads to not only pay for, but exceed the cost of PPC, making a quality PPC campaign a good investment.
2. B2Bs that have a high average order value (AOV) – Even if each individual product isn’t expensive, if a business averages higher amounts spent per customer (or a high AOV), PPC can be highly lucrative. Especially if customers are (or could be) repeat customers.
3. B2Bs with hard to find or niche products – The most coveted keywords in PPC are also understandably the most expensive. This leads to a big advantage for companies who have more niche, specific, or difficult to find products, allowing them to easily find and reach highly targeted audiences at scale with a relatively low cost per click and high conversion rates.
4. B2Bs with Customer Lifetime Values (CLV) – Some industries can better afford spending more acquiring new leads because the lifetime value of gaining a new client is so high. Especially if those same leads are prone to referrals, which only increases the value of money spent on PPC campaigns.
5. B2Bs with products that people research (non-impulse buys) – With approximately 63,000 search queries every second, it seems unsurprising that when most people start researching, they start on Google. That makes Google PPC a huge advertising opportunity for B2B companies whose products or services require a lot of research before committing.
6. B2Bs that sell products or services online – If a business can and does offer their services or products online, PPC is of big benefit and a great addition to current advertising efforts.
7. B2Bs that need to build awareness with specific audiences – The unique algorithms and specific targeting capabilities available through PPC give businesses a unique opportunity to build awareness faster and with greater penetration and ease than with SEO or traditional advertising alone.
B2B Businesses That Benefit the Least From PPC
1. B2Bs with primarily low-ticket items (under $10) – With PPC, you get charged every time someone clicks on your ad. Here’s the issue: Say you are paying $4 per click for Google Ads, but you sell a digital e-book download that costs $2 a download. Even with the most ambitious PPC plan, that business model is not going to pay off with PPC. In our opinion, you are better off spending your ad dollars elsewhere.
2. B2Bs with non-repeat customers and orders – Say a business sells something that a company or client is only going to purchase one time in their lifetime and then they’ll never think about it or purchase it again. Businesses who sell items like that most likely won’t benefit from PPC (the exception being if the item is a high dollar item).
3. B2Bs with commodity / generic product lines – If a B2B sells generic product lines or commodity-based goods that are available from many other retailers, PPC may offer limited potential as an advertising platform.
Additional Factors That Can Put B2Bs at a Disadvantage
Okay, so you have one of the business models listed above that we said was ideal for PPC. Yet when you tried PPC, your campaigns didn’t get the results you wanted. Why? We’ve found it’s usually due to one of the factors below:
Low advertising budget – When you are testing out a new advertising method, it makes sense to keep spending low. It’s a test after all, right? However, if you keep your initial investment with PPC too low, you give yourself a false sense of failure by risking not seeing enough volume to reach profitability.
Irrelevant landing pages – 75% of people say that they click on PPC ads because they expect the ad to answer their question. Thus, it stands to reason that if your landing pages are full of irrelevant information inconsistent with the question being searched for, you will earn less leads…even if you have exactly what those searching are looking for.
Infrequent or ineffective monitoring – Effective PPC performance relies on consistent and knowledgeable monitoring and planning to be successful. With it, you can better understand buyer behavior, customize ads, and make real time improvements. Without it, you are setting yourself up for lower quality scores, higher cost per clicks, and lower ad positions – which will result in a low ROI and ultimately failure.
Need help with your B2B’s PPC?
At Ready Ads, we’ve been helping enterprise level clients and beyond for over 20 years. Let us help you grow your PPC with perks like 100% trackable results, no annual contract, full transparency, dedicated customer support, data-driven results, quality leads, maximized ROI…and the results to prove we know what works.