Some great advice from guest blogger Mike Nierengarten at Obility. Enjoy!
Marketing campaigns perform differently, but far too many marketers treat every campaign the same. The main advantage of the digital marketing era is how measurable marketing campaigns have become. Marketers can slice and dice campaigns in dozens of different ways and should be using this data to identify different types of campaigns and budget accordingly.
One incredibly effective way to do this is by differentiating lead generation campaigns at the cost per opportunity (CPO) level. You can use a combination of data from ad networks, CRM and marketing automation reporting to determine campaign CPO and divide campaigns into eight different types:
6. Lead Nurturing
8. Poor Performers
Categorizing campaigns in this manner will allow you to determine where you should concentrate your spending and which campaigns to stop running immediately.
Campaigns that Generate Sales
Lead generation is a top priority for most B2B marketers, but you should consider the quality of leads you are generating and how likely they are to become an Opportunity and a closed sale. When constructing your marketing budget, how effectively your lead generation campaigns drive sales should have the largest impact on how you allocate marketing dollars.
Core campaigns drive the bulk of opportunities below target CPO. These campaigns are typically highly relevant search, email lists, competitor targeting and retargeting campaigns. You should be saturating your spend on your Core campaigns. The idea is to spend every dollar possible on campaigns that are most effective before spending marketing dollars elsewhere.
Once you have identified your Core campaigns, explore how you can maximize your spend. Improve impression share. Increase click-through rate (CTR) to get more clicks per impression. Change your ad delivery from standard to accelerated. Explore any and all options to get more traffic and spend more dollars on Core campaigns.
Additionally, expand your core campaigns within the same network or test different ad networks to target the same audience. For example, if search terms are effective in AdWords, test Bing, or if competitor-targeted campaigns are effective in search, identify more competitors to target in search and test targeting competitors in social advertising.
Peripheral campaigns are marketing campaigns where CPO is slightly above target. Peripheral campaigns are often tangential search campaigns, media buys or social advertising campaigns. The goal in identifying Peripheral campaigns is to determine where you should spend your time improving performance. While Core campaigns require more budget, Peripheral campaigns require more effort.
Look at ways to decrease CPO for Peripheral campaigns. Lower your bid on keywords in top position. Renegotiate the rate of your media buy. Target less competitive hours where cost per click is cheaper. If you find yourself spending most of your time on Core campaigns, switch your efforts to the campaigns that are nearly working to improve overall performance.
Campaigns That Increase Awareness
Not all campaigns focus on lead generation. Businesses have other objectives including building awareness in their target audience. Vanity, Branded, and Lead Nurturing campaigns focus on keeping your brand top of mind. Marketing dollars devoted to these campaigns need to come from a separate budget than lead generation campaigns.
Vanity campaigns, sometimes called HiPPO campaigns, referring to the Highest Paid Person's Opinion, are those that must be run for whatever reason. If your Board demands that an ad show up when someone views a competitor stock symbol, it’s a Vanity campaign. If you must appear in the top position for a keyword no matter how much it costs, you are running a Vanity campaign.
The goal with Vanity campaigns is to minimize the impact (damage) they have on your overall marketing performance. Spend the minimum possible to fulfill the requirements handed down from above.
Branded campaigns are unique in that they have separate objectives than lead generation campaigns. Branded campaigns cannot be directly measured against lead generation campaigns, and so advertisers need to treat Branded campaign budgets separately from lead generation budgets.
Lead Nurturing Campaigns
Similar to Branded campaigns, Lead Nurturing campaigns should be treated separately from lead generation. Lead Nurturing campaigns include retargeting your existing database or running social advertising to your followers. Lead Nurturing campaigns should be measured by days to close and interactions with your content. Lead Nurturing campaigns should have set budgets.
Campaigns that Find Opportunities
Existing Core campaigns often will not satisfy a company’s growth goals. Advertisers need to find the next Core and Peripheral campaigns in order to continue to grow and hit sales targets. High Volume and Test campaigns provide an opportunity for advertisers to continue to increase performance.
High-volume campaigns generate high volume leads at a low cost but often with limited opportunity. High volume campaigns are typically Display network, purchased email lists or generic search campaigns. They are useful for keeping your sales team busy and providing fodder for lead nurturing. If sales people are demanding more leads, turn up your High Volume campaigns. However, if budget is limited, High Volume campaigns should be switched off before Core or Peripheral campaigns.
Test campaigns are essential. All advertisers should push for a set budget for Test campaigns to test campaign performance. Test campaigns are necessary to identify future Core and Peripheral campaigns. Test campaigns should be run regularly.
We often use test campaigns to test new ad platforms or betas within existing ad platforms. For example, advertisers could use test campaign budgets to test performance on LinkedIn Network Display or Gmail Sponsored Promotions. After running a test and analyzing data, test campaigns fall into one of the other six categories.
Poorly Performing Campaigns
Poor Performers are campaigns with CPO significantly higher than your target. STOP running these campaigns immediately. Your money is better spent on Core, Test or Peripheral campaigns. Only return to these campaigns if significant developments have occurred (e.g. a new relevant white paper has been launched). Far too often, we see advertisers continue to run Poor Performers because the campaigns “should” work. Recognize when campaigns are performing poorly and don’t hesitate to turn them off and devote their budgets to better performing campaigns.
Creating a Marketing Budget
Now that you have identified the categories of your marketing campaigns, budgeting will be fairly straightforward. If lead generation is your main goal, first calculate the maximum you can spend on your Core campaigns. What do your Core campaigns cost at full blast (ads set to accelerated delivery, highest impression share possible, max clickthrough rate, etc.). This is your baseline for your marketing budget. If your marketing budget is less than the max, ask for more budget.
Secondly, consider what you want to devote to awareness campaigns. These campaigns likely will not have as measurable an impact on your sales, and so you should consider your current market share, database size and pipeline when setting a budget for awareness campaigns.
Finally, if you have more than enough budget to fully run Core and Awareness campaigns, focus on integrating a mix of Peripheral, High Volume and Test campaigns. If you are trying to drive a high number of leads to keep your sales team busy, use the excess budget on High-Volume campaigns. If you are looking to increase Opps, focus your time on improving Peripheral campaigns. As mentioned earlier, Test campaigns are fundamental to your future success; allocate money to Test campaigns when available.
By categorizing your campaigns and understanding the maximum amount you can spend on Core campaigns, you can get a good idea of minimum spend. From there, you can start building your marketing budget by adding layers – Awareness, Test, and High Volume campaigns – until you settle on an overall marketing budget.
About the Author
Mike Nierengarten is the President of Obility (http://www.obilityb2b.com), a leading B2B demand generation company that specializes in internet marketing for companies with long sales cycles. Mike founded Obility in 2011 and has helped market B2B companies since 2004. In his career Mike has helped great companies including Marketo, Intuit, Jive Software, Juniper Networks, & Axway track online marketing performance through the sales cycle by integrating CRM & marketing automation platforms. Mike has been published in leading publications including Website Magazine, Social Media Monthly, Search Marketing Standard, Web Analytics World, Business2Community, and iMedia and has spoken at multiple events including the Marketo User Conference, SEMPDX, and AdRoll Retargeting Workshop.
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