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The Advantages of Paid Search Advertising for B2B Companies

Riley Duncan | January 22, 2020 | Digital Advertising

Paid search advertising, also known as Search Engine Marketing (SEM), provides an opportunity for businesses to get a prime position in the search results, even showing up ahead of the organic search results. This advertising strategy can be a great marketing vehicle for many types of businesses, but there are a number of advantages that make pay-per-click (PPC) advertising on paid search platforms a great fit for many B2B (business-to-business) companies.

High Customer Lifetime Value (CLV)

One of the biggest advantages for B2B businesses when it comes to SEM is that they, on average, have a higher customer lifetime value than B2C businesses. This means that the value of a lead is worth more to their company. While a B2C company may only be profitable with a cost per conversion below $50, many B2B companies can get great ROI (Return on Investment) with a cost per conversion much higher than that, as each closed deal could be worth thousands.

For example, let’s say that your B2B company’s average customer lifetime value is $1,000. If your cost per conversion on Google Ads is $100, and you close one out of every five conversions into a paying customer, you’ve paid a total of $500 in order to make $1,000. Because of that higher customer lifetime value, you could absorb an even higher cost per conversion and still be profitable.

High-Intent Searchers

Paid search advertising is a great way to get in front of a targeted audience during the exact moment when they are looking for a product or service. Searchers are actively looking to solve a problem, and paid search advertising provides the opportunity for businesses to get in front of them at the exact moment when they are looking for that solution. 

A well-structured and well-managed account will be very strategic in bidding aggressively on keywords that are relevant and have high intent behind them. What does intent mean? Take the following example.

High intent: “best google ads management agency in michigan”

Low intent: “google ads manager”

By building your Google Ads account to get in front of as many high-intent searchers as possible, you can focus your effort & budget on the audience that is most likely to convert. 

Once a person clicks on your ad, you get the chance to prove that you are the right solution for them. Because you know exactly what this person is looking for, you can be very direct in speaking to their pain points and giving them what they want on the landing page. Check out Episode 1 of our podcast for more tips on B2B conversion rate optimization!

Opportunities to Measure & Optimize

Unlike traditional advertising, digital advertising provides a wealth of data about user behavior. These metrics are crucial for both proving and improving ROI. 

By combining data from Google Ads and Microsoft Ads with your CRM, you can calculate just how effective your advertising efforts have been. If you’ve spent $50,000 on Paid Search this year, and you can tie that back to $150,000 in revenue, you may want to think about increasing your budget for next year!

You can then jump in to Google Ads and take a look at your Search Impression Share for your top keywords, and decide how much room your account has to grow. Looking at this data is a must for evaluating your campaigns and making decisions for the future.

In addition to proving ROI, data from Google Ads, Microsoft Advertising, and Google Analytics can help you improve the performance of your current campaigns. 

Unlike organic search, paid search advertising provides you with the actual search query that someone used to find your ad, click to your website, and convert. This is a unique extra layer of insight that proves extremely valuable in optimizing campaigns. If Search Term A earns 100 clicks a month and converts once per month, but Search Term B earns 20 clicks per month and converts four times per month, you’ll want to make sure that your strategy is focused around Search Term B.

Additional ongoing PPC management tasks to improve the account should include bid adjustments, A/B testing, and negative keywords. Through consistent, smart management of your Google Ads account, you can improve your cost per conversion and ROI over time.

Use Your Customer Research to Your Advantage

One often overlooked benefit of Search Engine Marketing is to use your customer research to your advantage. Paid search platforms are consistently coming out with new ways to adjust your campaigns.

Last year, Microsoft Advertising launched an integration with LinkedIn. Google Ads offers a variety of audiences that you can layer on top of your search keywords. (We recommend testing these in Observation Mode before making any major adjustments!).

The more you know about your customers, the more strategic you can be with these extra layers of optimization. In the B2B space, we often see opportunities to add bid adjustments based on device (sometimes mobile users aren’t the target market!) or to expand paid search marketing from Google Ads over to Microsoft Ads as well. Finally, it’s important to remember that paid search doesn’t happen in a vacuum! Even if you don’t convert someone on the first search, you’ve started the conversation. This is why it’s important to have a complete digital marketing strategy, incorporating SEO, remarketing, and high-quality content in addition to your paid search campaigns. These different pieces can all work together to help you get more out of your digital marketing program.

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