Whether you’re marketing for a B2C or a B2B company, it can be tough to land on a magic formula where your paid media delivers across the board: expands brand awareness, builds your pipeline, and drives revenue. What delivers today may fail tomorrow. The media landscape is always changing; platform changes, algorithm updates, privacy law revisions, and unpredictable buyer behavior – among other factors – make finding the right channel mix for your media spend a constant challenge.
We marketers have to consider many factors when buying media, including:
- which channels are the best fit
- what are the desired results
- how and when to diversify the mix to maintain momentum
- whom to bring along as you build your business case
To address these topics for Norwest’s portfolio marketing leaders, I hosted a conversation with Tyler Elliston, our senior advisor for growth marketing and an experienced performance marketing practitioner. Tyler founded the marketing talent agency Right Side Up and has helped major brands in our portfolio like HoneyBook, Dave, and Madison Reed design and execute successful media campaigns.
We tackled the big questions marketers have about media buys, and discussed how best to approach the process to derive the most from your investment.
I’ve distilled some of the most insightful points from our conversation.
It’s not the number of channels, it’s how you use them.
Sure, with unlimited time and money, companies could try any and every channel. If you’re not so fortunate, start with what is manageable and realistic – maybe one or two channels – to determine which attracts reliable sales or marketing qualified leads (MQLs).
Don’t get too channel-happy when you start seeing results, however. If a channel drives pipeline growth and generates revenue, the natural response is to spend more in that channel to reap greater rewards. That seems logical, but Tyler warned that every channel has a limit and you should always be cognizant of diminishing returns.
Tyler suggested that when you start to get traction in one channel – or see impending limitations – it’s time to consider new ones. These are the other circumstances when he advises marketers to consider expanding their channels:
- You have more time and budget to spend. If your company raised a new round of funding, you may be less constrained than before.
- You’re seeing diminishing returns. Consistently underperforming against goals is one sign to consider.
- You’re facing channel headwinds. For example, if your company gets 80 percent of its traffic from TikTok, and there’s a chance it could be banned, that’s a cue to think about diversifying.
If you have aggressive growth goals and media buying is a central driver of that growth, it is even more important to diversify your channel mix.
Invest enough to truly test channel effectiveness.
We all know that marketing teams are being squeezed to do more with less. Nonetheless when it comes to testing the effectiveness of media channels, it doesn’t pay to be stingy.
Tyler warned that spending small amounts – say, $5,000 on a campaign – can result in fewer leads than projected and some misguided conclusions. The problem: You’re not investing enough to effectively test the channel so you end up getting a false negative since an investment at that level is likely to yield a low “n”. Ultimately, a test of your performance marketing channels should generate enough conversions to reach statistically significant results. In his experience with B2B companies, two to three months of testing with an average budget of $20,000 – $30,000 is usually enough to determine success.
If you underfund an experiment, you jeopardize sound conclusions and any further testing in that channel down the road. In my experience the unintended consequence is that someone on the executive team, usually the CEO or CFO, will declare that the channel failed. Not only does this view impede short-term investment in a new channel, but it can have a lasting impact. How many times have you heard someone say “we tried that, and it didn’t work,” even years after an underfunded experiment?
Tyler also advised companies to move the conversion event up the funnel as much as possible. For example, instead of defining a conversion event solely as closed-won deals, consider conversion events based on demos, or even a newsletter sign-up. Then you can monitor the conversion rates to see if those higher-funnel converters convert the way you expected them to down the funnel.
Building influence and getting buy-in to diversify your channels should start early.
Socialize the idea with the CEO and CFO. You’ll need alignment on a few key topics:
- Measurement and analytics – particularly your metrics for success up the funnel
- Budgeting – how much is required to test well?
- ROI expectations against customer acquisition costs (CAC) – how will you determine if it doesn’t work or if it does?
Most marketers focus only on the media that delivers the highest return on ad spend (ROAS). What about channels that may have lower ROAS yet meet your LTV goals and profitability threshold?
Tyler recommended establishing methodology for an acceptable cost per lead that is rooted in LTV and the desired returns. For earlier-stage companies that haven’t measured their LTV, he recommends turning to benchmarks and forecasting. By partnering with CFOs, marketers can build LTV models using data or benchmarks to project expected CACs and retention curves.
What if you can choose only one?
Our participants wanted to know which media channels perform best, so Tyler broke them down. You may be surprised how some deliver.
In B2B:
- Google Search is still the status quo. Even in some industries where the cost has increased pretty significantly, it still works. That’s because users often have a high intent when they search.
- LinkedIn can be hit or miss. Cost per mille (CPMs) is still expensive, but if you’re targeting active LinkedIn users you can see good results.
- Podcast advertising, though more popular among B2C advertisers, can and does deliver for some B2B companies that target broad audiences.
In B2C:
- Google Shopping has been more effective over the past three to five years for direct-to-consumer brands.
- YouTube is emerging as a fruitful channel for prospecting, not just re-targeting.
- Facebook has historically been the gold standard, but their targeting capabilities have been diminished.
- TikTok is emerging as a big channel for B2C companies, despite regulatory risk.
He cautioned, though, that frequent algorithm updates and buyers’ whims can make a platform go from popular to not quickly, adversely impacting your campaign performance.
So the work doesn’t stop. Marketers must continually optimize their campaigns and stay ahead of the trends impacting their most effective channels.
About the Author
Lisa Ames is a vice president and marketing operating executive on Norwest’s Portfolio Services team. She leverages her more than 20 years of B2B SaaS marketing experience working shoulder-to-shoulder with portfolio companies to help them thrive.
