December 16, 2021
This blog is based on a speech given by Richard Tank, Cognism’s Global Head of Performance Marketing, at B2B Marketing Expo 2021.
See Richard's full speech from the Expo - press ▶️ to watch!
What is performance marketing?
It’s any type of B2B marketing activity that’s designed to produce a direct result. A result can be anything from a lead to a sale.
The type of media can be digital (e.g. paid search) or traditional (e.g. direct mail). Another term that’s widely used for performance marketing is direct response.
Spend on advertising has grown massively over the last 3 years. WARC reports the UK’s ad spend has gone from £11.5B in 2017 to £27B in 2020. Digital has grown from 48% to 66% and direct mail and print is still in decline.
The largest spend on a single media is search; Google accounts for 90% of this. It’s also been the most effective performance channel for B2B and B2C for around 15 years and I’m sure will continue to be for another 15 years or more.
As it’s almost a pure performance channel, the level of continued and increased investment is a testament to the ROI advertisers are seeing.
Paid search is an auction-based ad system, where you pay for clicks on search terms that you select. Therefore, it’s highly targeted and controlled, unlike TV advertising.
This is a screenshot of a Search Engine Results Page (SERP):
The SERP is the page that generates after a word or “search term” is searched. Currently, there are 4 paid search ad positions and 10 organic search positions.
Additional information is available, such as quick answers, flight search and location listings, all depending on the type of search among other factors.
This is the ad rank formula on which the ad auction is based:
The better the Quality Score (QS), the less you’ll pay per click for the same position. Therefore, an advertiser in position 1 could be paying less than the advertiser in position 2.
A low Quality Score can inflate CPCs by up to 50%. Likewise, high Quality Scores can increase CPCs by the same amount.
Many factors influence QS, not just the 3 mentioned in the Google Ads platform. The main factors are shown in the graphic above, with click-through rate (CTR) being the most important component.
The brand onion is a concept that visualises the relationship between purchase intent and conversion rate. You can see a graphic of the brand onion below.
The conversion rate will always be higher in the middle of the onion and lower towards the edge. The amount of effort to convert users on the edge of the onion will always be higher and should therefore mean you pay less.
Paid search is organised in a hierarchal system. A good account structure will allow you to have tightly-themed ad groups, which means that Google will reward you with a higher Quality Score.
It will also allow you to create ad copy that’s highly relevant to the keyword. The ideal structure depends on the products, service and company that is being advertised. The website navigation menu is a great starting point.
Retail is an easy one to visualise, where the campaigns are split into clothing categories, such as shirts and the ad groups are split by sub-categories, such as casual shirts.
In the example below, you’ll see how we structure accounts at Cognism.
Ad copy connects the user to your brand, and so it’s vital to craft a message that’s highly relevant and resonates with the user. It should attract and engage users, encouraging them to click in the split second after they’ve run a search.
Here are some key ad copy tips that consistently produce a high CTR:
There are 2 methods of using audiences in Google Ads:
Over 2 months at Cognism, we scaled Google Ad revenue by 7.5x. How did we achieve this?
By utilising the theory outlined above. We made the following large-scale changes in order to achieve the increase in ROI in such a short period of time.
We started with research to find core keywords that could be expanded with secondary words. e.g. “database” as a core which can be added to “sales”, “B2B”, “EU” to create a long keyword list.
While Google captures lots of variations, it’s an advantage to have a long list; this is so you can report on the keywords that are working. Google’s AI will allocate the search to the most relevant keyword.
By the end of this exercise, we went from 59 keywords to over 3,000. Following the brand onion concept, the keywords we chose went from low volume, high intent to high volume, high intent until we had enough volume for our budget.
Each layer of the brand onion is related to at least one of the new campaigns and its expanded keyword list.
Allocating budget is an easy way to optimise. We started by allocating it to the lowest CPL campaigns first, before allocating it to the next lowest CPL campaign.
Following the brand onion concept, this will also start with the lowest volume, as illustrated in the graphic below.
After the expanded keywords and new campaign were in place, the optimisation period began. Our focus was on revenue, over the initial lead stages.
You’ll see some examples in the graphic below.
Google’s AI has come a long way in the last 3 years. So much so, you can now rely on it fully for bidding.
This is due to the amount of data it uses to optimise bids on an individual basis.
This was the old way of bidding:
And this is the new way:
The results are clear - a 7.5X increase in revenue within 2 months that can be directly attributed to performance marketing and a 1.6X increase in non-direct revenue from users revisiting the site.
This data is captured in the graphic below.