At the end of the year, we’re all taking a look at our budgets. In a perfect world, you would be able to spend as much money as needed on every possible strategy.
However, this world is far from perfect, and you’re likely having to make some tough budgetary decisions for your 2023 marketing.
One question a lot of marketers are asking themselves… How much should we invest in PPC or ABM?
Let’s explore the pros and cons of each marketing tactic, and figure out the right balance for you.
Let’s start with the point most executives want to know: will pay-per-click or account-based marketing have a greater return on investment?
Let’s look at the likely ROI if you’re using the most successful platform. The PPC platform with the highest average ROI in 2022 was Google. Google paid ads showed an average of 200% ROI (truelist.com).
That average looks fantastic, until you consider what a well-run ABM program can bring in. One of our campaigns with BillingTree, an industry leader in payment processing, earned 700% ROI (read case study).
It’s easy to see that ABM can have results that absolutely blows PPC out of the water. Of course, this is not the industry average for ABM. Instead, this is the return you could achieve when working with an expert ABM agency who knows how to build a profitable campaign.
PPC is a tactic that can be used in one way: to get clicks on ads in search engines or on social media. This means that you can only reach a prospect when they’re already searching for an answer. That’s a very particular point in the decision-making process.
People must have already formulated a question to be reached using PPC. This makes them a very warm prospect, but what about the people who are dealing with a complicated issue that can’t be handled by a google search? Or prospects who think their current solution is adequate, but don’t see the value your solution would bring them?
Account-based marketing can be customized to reach your perfect prospect wherever they are in their decision cycle. Yes, this does mean that ABM is a long-term proposition, as you might begin a relationship with a prospect well before they’re able to make a purchase.
But it also means you can reach prospects and make a connection before they start looking at your competitors. With PPC, you are constantly in competition, bidding for a place on Google’s winner’s board.
But with ABM, you connect with a human being, find them a solution, and create a long-term profitable relationship, all without any direct struggle with your competition.
If you want to reach your prospects at any point other than a google search, you will need ABM.
At first glance, PPC seems like it’s much easier to implement as part of your marketing strategy. However, when you begin to analyze the costs, including the hours required to run the program, it becomes much less of an obvious frontrunner in this category.
Google recommends $10-$50 a day to get started with PPC. While this can seem like a small investment to start, consider that an effective PPC program is expected to run every day, year-round. That’s thousands of dollars just to get started with one ad!
Account-based marketing can be adjusted for your budget. The real limit is your creativity. Effective campaigns can be done with a jar of peanut butter and a paper bag. We know, we’ve done it (read case study)!
Even if your prospects are potentially high-value contracts, B2B account-based marketing tactics, even those like B2B direct mail marketing, don’t have to be expensive. The humanity and personalization of the campaign matters more than spend.
Plus, because ABM is targeted at specific individuals on specific accounts, you know that every dollar is going to the correct audience. This means you’re not wasting spend on showing ads or content to those who aren’t necessarily a great fit for you.
PPC might seem at first glance like the easier option in terms of time commitment. After all, you simply set your budget, pick your audience, and then sit back and watch the customers roll in, right?
Not exactly. First, you have to set up a customer path from click-to-purchase. If you don’t get every step after the initial ad just right, you will lose every one of your hard-earned prospects.
Each search term you hope to win may need a slightly different ad. This can result in a huge number of webpages, blogs, or other content that you need to develop. After all, you need somewhere for people to go once they’ve clicked!
This is why companies can spend thousands of dollars on PPC budgets, trying to capture every applicable keyword. But the investment doesn’t stop there.
You’ll need to dedicate a considerable amount of time to analyzing your results, and making changes accordingly. To get the most out of a PPC program, you’ll have to mine the data for insights on your audience, your budget, your schedule, everything to do with your ad.
This will require either a heavy investment of your time, the time of one of your marketing analysts, or in some cases, an entirely new hire. The average salary of a PPC Marketer is nearly $50,000 (truelist.com). If you want to run a truly effective PPC program, be ready to spend 50k on adding an expert to your team.
Of course, ABM requires a considerable time investment as well. You need to discover your perfect prospect and conduct a campaign to turn them into a client relationship.
With all this in mind, the question is not “What takes less time?” The question is, how would you rather spend your time? Focusing on capturing a ton of random interest and then figuring out who fits, or focusing on the ideal customers for your business from the get-go?
ABM is entirely relationship-centered. It’s not about getting in front of enough eyes. It’s about getting in front of the right person and addressing their specific pain points while developing a relationship.
That means from the very start of any interactions you have as part of an Account-based marketing strategy, you are building a good image for you and your brand. Even if a client does not end up purchasing from you, you’re building positive word-of-mouth, which can result in sales down the line and lasting affinity for your brand.
Have you ever heard someone say of an ad, “Wow, I saw this Google search ad, and I won’t be purchasing from it, but it was so amazing, I think you ought to try it out!” If someone said that to you, you would think they were joking or crazy.
Most people would agree: ads are a nuisance. Do you really want the first impression a prospect gets of your company to be “Wow, that’s annoying”?
Regardless of your answer to that question, people are getting better and better at removing ads altogether from their online experience. This will make it even more challenging to capture their attention, let alone drive them to take action.
PPC relies on the appearance of ads on a user’s search page. If your audience has an ad blocker, you’ll never reach them.
More users than ever are using ad blockers, where a simple click of a button is all they need to never see your carefully targeted google search ad. 42.7% of internet users worldwide report using an ad blocker (backlinko.com). If you mostly sell in the US, 27% of US users block ads.
Ad blocking is even more common among younger users. If your audience is between 16-24 years old, nearly half of users use an ad blocker.
While this stat may not be alarming yet (there’s still plenty of fish in the sea. For instance, those 73% of other users who don’t block ads), a trend is illuminated when compared to previous years.
Ad blocker usage has increased by 71.97% since 2014. Every year, more and more people tire of ads and the platforms who enable them. Especially in younger demographics, you will likely see a drastic reduction in audience for PPC in 2023 due to ad blockers.
If you focus on PPC for a long-term marketing strategy, you will be leaving out a large chunk of your audience, and that neglected portion will only grow every year.
On the other hand, ABM has many options for reaching people, including both digital and physical means.
Some you may not think of as part of a traditional ABM strategy, but they can be extremely effective for connecting to high-value customers when used correctly. For example, we offer Podcasting, Content Marketing, Personalized Landing Page Experiences, and similar tactics as part of our ABM offering.
As for physical tactics, B2B direct mail marketing has been very successful for our clients (see case study). Many people use ad blocker, but not many people can resist the allure of opening a personally-addressed package!
Pay-per-click is a popular choice for a reason. Though we predict it won’t stay a sustainable option in the long-term, PPC can have a very high ROI when used correctly.
When is PPC the better option? PPC is best used for broader audiences that can be captured by the limited demographic options.
Because PPC only has so many options for targeting, the more niche your audience, the less successful it will be.
For example, PPC would be a great option for a B2C makeup brand who is selling to women between eighteen and thirty-five, who like makeup, and are already searching the web for foundation.
But many of us have businesses that serve a particular type of business or professional. What if your audience is something more like CFOs of credit unions who are struggling with project management? Or Civil Engineers with active government contracts in the Seattle area who need an expert in flood plains?
PPC won’t help you reach those people. It could, at best, bring you to engineers in the Seattle area, but you’ll be wasting your money hoping one of those engineers will be your soulmate.
This means that, when you consider audience targeting alone, PPC can be the best option for direct-to-consumer. For B2B, account-based marketing is the best choice.
Interested in account-based marketing but not sure where to start?
Explore our website to find out more from the ABM Agency who makes it a daily practice to Deliver Remarkable.
We’d love to learn about your goals, and whether Account-based marketing tactics are a good fit for you in 2023. If you’d like to have a conversation about your specific needs, let’s chat.