avatarVictoria Kurichenko

Summary

PPC search ads may not be the most effective marketing strategy for B2B businesses due to high CPC, substantial budget requirements, low keyword search volume, delayed user conversion, low keyword Quality Score, and low conversion rates.

Abstract

The article discusses the challenges of using Pay-Per-Click (PPC) search ads for B2B businesses, highlighting that despite the potential for lead generation, the high cost per click (CPC) and the need for a significant monthly budget can make it an inefficient channel. The author shares personal experience of PPC campaigns exhausting the budget before the end of the month without yielding desired results. Factors contributing to the ineffectiveness include highly competitive keywords with CPCs as high as $50, the necessity for a substantial monthly budget to cover these costs, low search volume for niche B2B services, the lengthy decision-making process of B2B clients which affects immediate conversion rates, and low Quality Scores leading to higher costs and reduced ad visibility. The article suggests that while PPC search ads can be costly and may not lead to immediate conversions, it's important not to abandon the strategy prematurely and to consider optimizing campaigns with alternative ad types and retargeting strategies.

Opinions

  • The author believes that PPC search ads for B2B services can be cost-inefficient, especially with limited budgets.
  • High competition for B2B keywords drives up CPC, making it difficult to maintain ad campaigns within a modest budget.
  • B2B purchasing cycles are longer, which means immediate conversions from PPC ads are less likely, affecting the perceived effectiveness of the campaigns.
  • A low Quality Score can further increase the cost of PPC campaigns and reduce their performance.
  • Despite the challenges, the author advises against giving up on PPC too quickly and suggests experimenting with different ad types and strategies to find what works best for a B2B business.

Why PPC Search Ads Might Not Work for B2B Business

5 key reasons to consider prior to launching search ads for B2B

Image source: Pexels

Would you like to grow your B2B business? One of the possible ways is to start exploring new marketing channels to communicate your offer. If you consider launching a new PPC campaign for your B2B services and expect to get fast results — better read this article first. I’ve been doing paid advertisements for B2B services for a while and have already seen how Google Ads can burn your money and generate zero results.

In this article, I am sharing insights:

  • How to estimate your ad campaign's monthly budget.
  • Where to check the time needed for your users to convert and why this info is useful for marketers.
  • 5 reasons why PPC search ads might not be effective for B2B business.

“We want to get more leads. Let’s start advertising.”

I used to think like this as well. I knew about the power of paid advertisements from my previous job. Thus, I thought it could be a perfect channel to generate leads in a fast way and solve my problem.

I’ve got the following budget for B2B services advertisement: $1000-$2000 per month. This was maximum, the company was not able to provide more, and I have started experimenting with this amount of money. In fact, this is what happened:

The account budget was running low before the end of the month due to a high CPC for target keywords.

What can you spot on the graph above? These are my implications:

  • A single ad campaign consumed the whole advertisement budget I had for one month.
  • 124 clicks cost roughly $957.
  • The CTR for this particular campaign was low at 3.10%.
  • The campaign was switched off before the end of the month due to the budget running low.

This is the data from one campaign only, but I had more. The budget was not enough to cover all the keywords I wanted to target. Thus, another solution was needed. Did you experience similar issues advertising B2B products or services? Share your experience in the comments below.

5 reasons why PPC search ads may not work for B2B business

Regardless of the bidding strategy, my B2B ad campaigns were costly. I used to generate leads, but the lead CPA was extremely high. In some cases, a lead CPA was as much as my monthly budget allocated for the Google advertisement. Let me share 5 reasons why I believe PPC search ads are not effective for advertising B2B services.

1. High keyword CPC

B2B services advertisement is extremely competitive. Depending on the industry, an average CPC can start from $10–20. This is a lot if you have a limited budget for your ad campaigns. For some keywords, I’ve had a CPC of around $50. This is just the click price. It does not mean that the visitor will eventually convert.

I have also tried a “Maximise clicks” bidding strategy with a limited cost per click. This way, I could ensure my costs will not skyrocket. However, intensive bid limitations can push your ads to 5,6, and 7th position of Google SERP which can negatively influence your CTR.

2. Requires substantial monthly budget

Due to high CPC costs, B2B services are costly to advertise. I would also suggest spying on your competitors and check how much money they allocate to Google ads. It can be a so-called benchmark for you. If you want to utilize PPC search ads, make sure to estimate the campaign budget for a month. Here is how you can do it:

Use this campaign budget estimates to plan monthly ad expenses.

Where C1 and C2 can be calculated in the following way:

C1 — traffic to lead conversion rate. C2 — lead to client conversion rate.

To estimate the ad campaign budget, you are already supposed to know your CPO — cost per order, In other words, the price you pay to get a client. You also need to know how much traffic your ad campaigns generate and the number of leads.

2. Low keyword monthly search volume

B2B business is specific. Users might not search for some B2B products or services every day. However, a one-time purchase can significantly contribute to your company revenue.

I used to advertise a B2B service that has a 10–100 global monthly search volume. In fact, many companies advertised under the same keyword. Due to a high competition level, I managed to generate just a few clicks with quite a high CPC. Besides, the ad campaign did not bring any leads.

3. Users might not convert right away

Have you ever made big purchases? Something like a new house. Did you decide right away, or it took you some time to make a purchase? I am sure you went online to check offers, pricing, former client reviews, apartment details, etc. Such an important decision cannot be made immediately; users need some time to go down the conversion funnel before they reach out to you with a request. The same rules apply to B2B services.

Do you know how many days it takes for your users to convert after the first interaction with the website? Here is how to check it in Google Analytics (if you have goals set up).

The time lag report shows the number of days it took from the first interaction to the conversion.

The time lag report is handy to analyze the audience's percentage that converts right away and estimates the efforts needed to bring the remaining users back to your website.

Users who have landed on your website from the search ads might not convert right away, or they might not convert at all. It will depend on the search intent and the keyword you are bidding on.

4. Low keyword Quality Score

In case you have a low QS for your ads, you should expect to pay more for a click. Besides, Google would limit your impression share that will eventually lead to a poor ad campaign performance.

I struggled with a poor keyword Quality Score, which made my CPC costs even higher. In case you face a poor QS as well, here is my step-by-step guide on how to improve the Quality Score for B2B ad campaigns:

5. Low conversion rate

High CPC, low CTR (as a result — a small number of clicks generated from search campaigns) will eventually lead to a low conversion rate. It does not necessarily mean your targeting settings are poor. It might signal that the audience is interested in your services, but the traffic is expensive and it is not enough to generate a decent amount of conversions.

In my case, visitors that came via paid ads have also visited the website contact page. However, a tiny percentage of them have converted into leads.

Do not give up too early!

It is easy to state that the search ads are not effective when you do not get the expected results. However, there are multiple things to be considered while judging your ad performance, like search intent, keyword volume per month, CPC, your monthly budget allocated for ads, competition level, keyword Quality Score, etc. Let your ads run for a few months and estimate their effectiveness for your business before making any other implications.

In my case, the leads brought by the search ads were rather expensive. Thus, I work on optimizing my ad campaigns, trying new ad types, like display ads, Gmail discovery ads, retargeting, etc.

Experiment with the paid ads as much as you can to determine what works for your business. PPC requires a lot of effort initially, but it might become a stable channel of lead acquisition at the end. Give it a try.

B2B
PPC Marketing
PPC
Marketing
Business
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