Did you think that the past twelve months of paid advertising activity would be marked by reduced spend and lower performance metrics? Metadata, the first operating system for B2B marketers, hypothesized so, too – only to admit that they were wrong.
In their newly released B2B Paid Social Benchmarks report comparing “pre-recession” 2022 to “post-recession” 2023, Metadata analyzed campaign data from each and every customer in the past 12 months – from April 2022 to April 2023. Their customers have spent nearly $130M in advertising over the past year. The company thought that economic headwinds would result in lower demand, lower ad cost, and lower conversion rates. Yet, it turns out successful top-of-funnel efforts are actually cheaper in 2023 than pre-April 2022, and overall ad spend is flattening out rather than plunging (comparing aggregate results and the differences pre- and post- April 2022).
So, what’s changed between then and now, and how does it impact where your budget and attention should be spent in the months ahead? Read on to find out the key takeaways from this insightful report.
- Cost per click. CPC is an early indicator of efficiency, and you can use it to compare one campaign against another. You’ll optimize to this metric if you’re running a brand campaign. According to the report, CPC dropped dramatically (e.g. for LinkedIn, CPC is down 31.5% and CPL is down 21.3%). Lower spend by the market as a whole creates real opportunity for those who are willing to keep investing in advertising. The numbers paint a new picture today than they did prior to April 2022 – mostly a good one, which isn’t what Metadata initially hypothesized. Which media to use and which path to take then? It will depend on who you are, who your audience is, and the types of campaigns you run.
- Cost per lead. CPL measures the efficiency of your campaign. You’ll optimize to CPL for lead generation.
How much can you spend to generate a qualified lead and convert that lead to a customer? A good CPL is different for every company and should be based on your unit economics.
The data illustrates another positive trend when it comes to post-April 2022 cost per lead. CPL is down across both LinkedIn and Facebook; combined with lower CPC, this means both clicks and leads have become cheaper in the past year. It’s still possible to get a lower CPL that doesn’t lead to revenue. But if you’re using an offer or demo request directly related to your product, and still getting a lower CPL, that’s a good sign.
- Click-through rate. CTR is an early indicator of how appealing and relevant your target audience finds your campaign. For example, you could get a high CTR that doesn’t end up turning into leads, opportunities, or revenue. It’s best to look at this when you’re experimenting with several ads, creative, etc., and want to quickly optimize those with the most initial engagement. To double up on good news Metadata didn’t predict, CPC has decreased across platforms in addition to CTR increasing—a trend that spans both lead gen and brand awareness campaigns. CTR is up nearly as much (for Facebook – from 0.57% to 0.65% and for LinkedIn, from 0.83% to 1.03%, pre-April 2022 to post April 2023).
The report proves it’s cheaper to get ad engagement and the consumption of ads isn’t down. Brand awareness ads are very much a strong contender and it’s a great time to be capitalizing on the suppressed budgets to own share of voice.
- Cost per opportunity. CPO is where things get interesting. It is another measure of efficiency you can use to start looking at ROI from your marketing. You’ll have a good sense of ROI if you know the opportunity dollar value and your cost per opportunity. A good CPO is different for every company and should be based on your unit economics. On Facebook, CPO has gotten cheaper starting at $8,071.00 and plummeting to $4,950.64. But LinkedIn CPO has nearly doubled in cost rising from $1,614.14 to $3,162.89. Buyers are still willing to take offers and demos but crossing the finish line because of decreased buying power.
- Tactics and strategies based on the metrics. Considering this data, the report has some insightful tips and tricks that could help marketers achieve their goals:
- CTR vs. CPL: Which campaign type performs best? Companies are now increasing spend per account for CTR campaigns. For example, in April 2021 companies were spending an average of $4,826.79 per month. Today they’re shelling out upwards of $11,000. In September of 2021, everyone was all in on CPL with spend-per-month averaging $35,000. By July 2022 it peaked at $40K, only to crash in December 2022. It’s clear that companies switched from contact collection mode to brand awareness. There seems to be an effort to leverage owned assets in order to cut costs. Driving traffic to your website and then focusing on retargeting and conversion rate optimization is more effective than cold advertising.
It’s clear that companies are realizing the importance of brand awareness in less fruitful times. A strong brand can carry you through a drought. It can also give you a boost when money is flowing.
- Choosing the best Call to action (CTA): This can be the difference between a meaningless impression and a promising click. Without a click, your lead isn’t going anywhere anytime soon. So, what are the most clicked CTAs in a post-April 2022 world? Metadata dug uncovered CTA trends based on demand-gen CPL campaigns. While all CTAs are performing better across channels, the cost goes up further down the funnel. Metadata are also noticing a difference in CTAs that are sales-based (“Get Quote”) and content-based (“Download”). “Download” was the most popular LinkedIn CTA in their last benchmark report. It’s still hands-down one of the best-performing in the current economy. The average CTR for “Download” clocks in at .58% versus .53% pre-April-2022, while the average CPL has dropped in cost from $124 to $84. Performance is strong for both top and bottomfunnel campaigns.
- What kind of ad creative is working? The down economy pushed creatives to do what they do best— get creative. Marketers were forced to identify the magic mix of channel, audience, and message to earn conversions. In the report, we see this taking shape in the data with a notable increase in experiments per customer. LinkedIn experiments are up by 15% and Facebook experiments are up to 6%. Paid ads can be styled as images, videos, carousels, or (on LinkedIn) convos. Metadata view images and video as the “meat and potatoes” of paid ads. Per the report, image ads aren’t going anywhere. Your strategy? Use images to drive curiosity, use photos of real people (they perform better than ads with stock imagery) and stats to back up your point – people are more likely to believe statements that are backed up by evidence. In short: Combine punchy copy with thought-provoking stats for a winning combo.
While not a textbook recession, the past twelve months have been the epitome of a down market. Your best approach based on the data and tactics outlined above? Audience matching and intention will undoubtedly become the winning technique. Each channel should be used for different campaign types, ad creative, and goals, focusing your ad spend on taking mindshare and capitalizing on the market downturn by increasing your share of voice.
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