B2B Marketing Blog

2017 AdWords Industry Benchmark Report: An Agency’s Perspective

By Jordan Con
Aug 14, 2017

In July, we released our third annual AdWords Industry Benchmark Report and had Lucia Rodas-Estrada, SEM Team Manager at DWA, a media agency with a predominant focus in B2B technology, join us for a webinar to discuss them. Lucia has spent more than five years on the agency side and has experience designing and implementing PPC, SEO, and social media strategies.

Having worked with a variety of clients from a number of different industries, she was able to provide great insight into AdWords’ performance.

The AdWords Industry Benchmark Report looks at AdWords performance data and tens of millions of dollars spent from hundreds of great companies across seven industries. Specifically, we looked at metrics at different stages of the funnel—leads, opportunities, and revenue. Combined with cost data, we were able to create powerful performance benchmarks for marketers like you to compare yourselves to industry peers.

Here’s what Lucia had to say about the benchmarks:

On AdWords’ contribution throughout the funnel:

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Lucia: At DWA, we try not to view search activity in a silo; ideally we like to run search in conjunction with other channels as part of a holistic media plan. We’ve found that AdWords is great for driving high quality leads while social and display are great for brand awareness and generating demand.

For AdWords, we’ve seen that the more targeted the keywords, the higher the quality of the lead. Most of our clients are B2B tech companies, and we use AdWords as a lower funnel strategy to find audiences who are already in market for our clients’ products or services.

We’ve seen that tactics such as remarketing and RLSA (remarketing lists for search ads) have great success. With that said, it’s important that upper funnel strategies have been addressed through other types of media so that users are already in the consideration/research phase of the purchase funnel.

Finally, I would say that it’s also important for marketers to not only target end users with search, but to target hand raisers who are in the research phase of the buying cycle and who can influence the ultimate buyer.

On AdWords CPL:

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Lucia: For our B2B clients, we usually see CPLs between $100-$300. B2B sales cycles, as you know, are long—usually between 3-12 months, therefore CPL is a proxy metric for conversions, since it’s difficult to optimize to opportunities out of the gate. Optimizing toward CPL allows us to make faster optimizations. For this reason, all of our clients have target CPLs for their search campaigns and we are constantly trying to decrease that CPL month over month.

Since we are continuously trying to decrease that cost, we have seen that there are a few factors that influence CPL: One is the asset you’re offering. For instance, a demo has a higher CPL than a white paper, for the former requires more commitment from a buyer.

Another factor that heavily influences the CPL is the nature of your business objective (e.g., branding versus ROI) and how that dictates your bidding strategy. For example, if you are:

  • Bidding on very competitive terms, your CPC will be higher and your CPL will be higher
  • If you need full impression share on certain keywords or branded terms, you will have to bid higher to be on top positions and your CPL will be higher

The targeting strategy you employ also affects CPL. A good test to consider is targeting based on device. We had a client who improved their conversion rate and CPL by targeting desktops only and removing mobile targeting from their strategy. We’ve found that trials and demos perform better on desktop than on mobile devices.

On AdWords Cost Per Opp:

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Lucia: The benchmarks in this report aren’t far off from what we see at DWA. The average CPO we see for our clients is $1,200. In B2B, the longer, more complex buying cycle, the higher the cost per opportunity. If we have a longer cycle, it is likely that there will be multiple stakeholders and decision-makers (or people you classify as leads) contributing to a single opportunity.

Unless your brand is pursuing a big brand play or entering a new market, the number of opportunities in-market will remain relatively the same YOY.

On AdWords ROI:

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Lucia: We often don’t receive ROI data from our clients. We do know that if we were to remove search from our clients’ media plans, their ROI would take a hit. We are making an effort to increase the level of transparency between our clients’ revenue and the search efforts, as it allows us to better optimize their campaigns and maximize their budgets. This could have to do with the resources required to implement attribution technology. This is an instance where companies like Bizible can help our clients and will give them the opportunity to start tracking and monitoring ROI as a key metric.

If our clients aren’t using an advanced attribution solution like Bizible, we almost always lose granularity in our reporting as a lead moves down the funnel and gets handed to sales. If ever, we know that search drove X amount of revenue, we won't know from which campaign, let alone ad group or keyword. Attribution technology is the key to bringing marketing and sales together!

With technology like Bizible, clients and agencies alike have the ability to showcase the multiple touchpoints all along the path to sale. This then contributes to lead and channel scoring which can drive then a budget and forecast for quarters to come with a clear ROI target.

Otherwise, we must rely on last touch attribution which has a tendency to be passed to sales to close. While search does drive a lot of last click lead activity, display and video channels have an even harder time showing post-click conversion activity. This makes attribution very important to justify marketing spend.

On year-over-year trends:

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Lucia: The year-over-year increases in AdWords’ contribution throughout the funnel are not surprising to me, as this is what we are seeing for our clients. AdWords offers marketers the opportunity to be very targeted, and targeting features will only continue to become more robust and readily available.

For instance, we now have in-market audiences, customer match, RLSAs, demographics targeting, day-parting, and other features that allows to target relevant audiences. The more targeted a marketer can get, the more likely he will be able to drive good quality traffic. I think that marketers will continue to invest more and more in AdWords.

Final Thoughts

Lucia: Keys to success for marketers on AdWords: First, knowing your audience is key because with AdWords you can be very targeted.

Second, is to have a realistic target CPL. Some of our clients want to hit targets of $100 or $50 CPL, and in many cases that is not realistic with their CPCs and based on how competitive their markets are.

Third, having and developing content. Content is king, and you also need content for paid search. You need to test different landing pages, different assets, and see which one is driving higher quality leads and which is driving the CPL that we are trying to target.

Test, test, test! Get ready to experiment with different keywords, landing pages, and ad copy.

You can watch the entire webinar here and be sure to download the 2017 AdWords Industry Benchmark Report below.

AdWords Industry Benchmark Report 2017  See how you stack up against your industry peers when it comes to revenue  driven, ROI, and more.  Download Now
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