The following blogpost summarizes some highlights from the podcast interview we did with Sam Karow, President and Founder of the Chicago-based marketing and media agency Effective. Sam has worked with everything from small companies to the biggest of the big. He joined our podcast to talk about a cornerstone in B2B marketing: programmatic paid socials and advertising. Read Sam’s thoughts on programmatic advertising, best practices, and future predictions below or listen to the full version of the episode here.
Jakob
Today in this episode, we're going to talk about programmatic advertising, and specifically paid social and programmatic advertising for B2B marketing. And we have an expert in this field joining us today, Sam Karow, the president of the founder of the marketing agency Effective.
I'm stoked to dive into this area. Because it's a very important topic, and becoming more and more so for B2B marketeers, who maybe have tended to rely more on organic growth and organic content posting, compared to B2C companies. So that's why it's important these days to understand the best practices in this area.
But first, can you just give us a brief background what you're up to, and how you ended up running Effective?
Sam
Effective is a media research, planning, buying and measurement agency. We've been in business for 12 years, and we help both businesses and agencies with all those services – basically taking a “top talent on demand” approach and giving that to people.
I came out of Leo Burnett and Starcom, where I was for 13 years, managing 100 million dollars a year of Gillette budget for example. And managing an eight-person team, six figure research budget, and saw the world from the biggest of the big. Then I shifted gears and went to a small agency that kind of was on their way down, and I knew that, but I was game for giving it a try.
By seeing sort of all the things that they were doing wrong, while also helping them with repositioning the agency, teaching them how to do digital, leading new business, I got the confidence that I could do this on my own. When they folded, I started Effective, and pulled two of their three clients forward with me, and took a run at it, knowing that maybe there'd always be that plan B of going back to a big agency.
That's no longer a plan B for me, but it's been a seamless transition into an amazing career where I chart my own course. We’ve developed this ability to deliver the same services that the holding company agencies do without all the overhead. We got a billion dollars of buying experience, a zero-commission based model, and we're 100% focused on ROI.
Jakob
That's great. You have all the experiences, from the largest accounts to small agency perspective.
Before we dive into programmatic advertising and paid media, can you just start with defining what's programmatic advertising and paid social is?
Sam
We define programmatic advertising as anytime you're using third party data, in a paid social platform, and running various tests on channels, ad placements, audience strategies and creative units. And making real time optimizations across all those combinations. That would be called programmatic.
It's a big opportunity area in B2B, if you had a hundred B2B companies in a room and asked them how many are doing trade shows, all the hands would stay up. If you then ask how many do both print and digital, you would lose some hands. But if you ask them about programmatic display, programmatic video, programmatic paid social, almost all hands would go down.
Programmatic is a big opportunity to educate and get brands testing and scaling their efforts. The motivation for programmatic paid social is about efficiency and effectiveness.
“The motivation for programmatic paid social is about efficiency and effectiveness.”
We look at the B2B publications, they're a little bit out of whack in terms of how they've priced their inventory. It is not unusual with a $100 CPM for a lot of the run of site display. Emails are inefficient when you look at a cost per click or cost per website visit. They're starting in a bad place with a very high cost per thousand impressions, and their performance on a click through rate is also two to three times worse. When you multiply the high cost of the impressions and the low performance on the click, it ends up being about 70 times more efficient to do programmatic paid social.
“… it ends up being about 70 times more efficient to do programmatic paid social.”
Jakob
Partitioning marketers who are evaluating campaigns in different platforms, are trying to understand where's the bang for the buck? When is it most effective to do programmatic advertising? Where and when do you apply programmatic?
Sam
Programmatic advertising can work at all stages of the customer decision journey. That's sort of the value of social ad units, that they're highly engaging. A lot of times, there's the ability for a lead form in the ad unit for that purpose, but they all can handle video, and it's all just that micro targeting. It works across the funnel, and it's just about how to get started.
3 steps that Sam recommend a brand to take when getting into programmatic paid social:
1. Inputs
The inputs gathering stage is critical, we have a media brief that we use to help guide the conversation. We want to gather as much information as we can about the target audiences, the brand, the category, and trends. Is the category up, down, flat? Is the brand up, down, or flat in terms of revenue?
When a brand wants to grow by five or ten percent, we want to immediately try to translate that into dollars and customers, so that we know how many new customers we're trying to acquire. The gathering of inputs is huge: we want to be able to build a plan on a strong foundation.
2. Target audience
With target audience development it’s about trying to understand the segments in the market. Which ones do we want to target? And really understand why they are not doing what we want them to do. What are their barriers to engagement and conversion with this brand? What part of the funnel, or where in the decision journey, needs the most help? And that's where we're going to push the marketing investment.
3. Setting goals and budgets
Most clients come to us without knowing either their goals or their budgets. Then you’re almost at a non-starter when you're like: "if you can't tell me what you want to do, and you can't tell me what you want to spend, we're at a bit of an impasse".
We have a set of tools and modules to help people get through that and set budgets based on a task-based approach, we can reverse engineer plans to achieve those goals. If we know that we want to get a defined number of new customers, we can back that out:
- How many opportunities?
- How many leads?
- How many website visits?
- How many clicks?
- How many impressions?
- And lastly: What's the dollars that allows that?
Getting into the goals and budget are a big deal. If we can't get at it from a business goal standpoint, we can also help with defining budget based on statistics. For example, what are the minimum spends required to have stable reads on a number of tasks?
Jakob
Thanks for explaining that process. Measuring programmatic is a key since you need to optimize, do you use ROI or ROAS or do you have other ways to measure KPIs for impact as well?
Sam
That's the one that we want to use the most, and it can be tricky with B2B. Because it's not necessarily an ecommerce purchase, so we can't tag that confirmation page and know the order value. It's a little more of a dotted line to revenue, we have leads but then we rely on client data to tell us how many of those leads became opportunities, and how many of the opportunities became customers. Then we match that and say what the return on ad spend of this campaign was.
It’s not something that we can optimize on during the campaign, and we want to be making real time optimizations during the activity. For that reason, we’ll back up and say, “let’s optimize on cost per lead or cost per website visit”.
And then it's still that setting up of the plan to say, “we think this plan will deliver this many visits, at this cost per website visit”. And then look at each combination of platform and audience target, and ad placement and creative unit and say, “is it above or below that goal? Should we be increasing, decreasing, cutting this strategy based on the performance we're seeing on a weekly basis?”
Jakob
Good insights. From an operational perspective, when you run the campaign, and you set it up on different platforms, would you like the client to implement those systems by themselves? Or do you prefer running that from the agency side? Or is it the mix? What's the best practice from your perspective?
Sam
We're always doing everything start to finish, and we're always open to a hybrid model. There's that kind of collaboration that occurs with organic and paid. Organic tends to be inhouse, paid tends to be led by agencies, and I think this is the best way. We're always happy to plan and guide the buy, but everything we've been doing in programmatic paid social, we've managed from start to finish.
Jakob
Which are the platforms and channels that you recommend?
Sam
Facebook and Instagram are hard to beat, they're always going to be number one on efficiency, both from an engagement and a conversion standpoint. Some people have issue with that, they think that those are more for family photos and fun, and there's not really a place for work there.
“Facebook and Instagram are hard to beat […] both from an engagement and a conversion standpoint.”
But the fact is, they're just too big, there's so much daily usage that they're hard to ignore. You look at an hour a day on Facebook is an average, whereas you might get half of that on a monthly basis on LinkedIn. And probably even less than that in any given B2B website. So the usage is there, and the efficiency & engagement is there.
We've seen amazing performance on Snapchat and are starting to test TikTok. Snapchat can do all the same third-party audience targeting as Facebook, Twitter, and LinkedIn. You can pull any third-party data to really ensure that you’re targeting title, industry, company size, location exclusively, so there is no issue with “Snapchat's too young”. It is younger, but the people that you're reaching are absolutely the people have been defined by this third party to be the people that you want to talk to.
TikTok is different, there's not much targeting at all there. There's no third party, their native targeting is very limited. So, the best option for TikTok is retargeting. If you have a website with decent traffic, and can retarget that audience on TikTok, that's going to be your best bet in terms of B2B.
Jakob
Snapchat is very similar to Instagram and Facebook, as I understood, where you can use your target data from a third-party target data analytic system.
Sam
Absolutely. And the strong benefit with Snapchat is that “swipe up” is a website visit. It's instant, and it's 100%. So, when you look at Twitter and Facebook, it's a click, and then there's a load, and then there's a page. You lose maybe 60% of the audience on that conversion from click to visit on Facebook, and it's really awful on Twitter: maybe only 40%.
But with that “swipe up”-function on Snapchat, it's a pre-loaded page that loads instantly, and 100% of the time. It’s night and day on cost per website visit with that function. Those tend to bounce a lot, but it's an opportunity for marketers to say, “what can I do with the landing page for my snapchat campaign”, because there's going to be a ton of views on that.
“… the strong benefit with Snapchat is that “swipe up” is a website visit. It's instant, and it's 100%.”
Jakob
Awesome, so interesting. And then one platform that I think maybe have a little bit of renewal and getting into fashion again is Twitter. What do you think about using Twitter for paid advertising?
Sam
It should be better than it is on efficiency, both engagement and conversion. It's definitely more efficient than Facebook on impressions and can be on three-second video views. Their issue is the cost per click is not going to be as good. And then there's this weird thing where those clicks just don't convert to visits as well.
It's a combination of page load and other things, and that's their big Achilles heel right now. [Twitter is] more of a business and personal platform, especially in medicine and some fields like that, where the academics and the practitioners are all over it. So, it should be even better than it is. We hoped that they just keep pushing on product to fix some of the issues that we've seen.
Jakob
Interesting to hear, I thought it was more profitable to advertise there actually. But that's good insights there from a specialist in their field.
And then the mothership in B2B communication, at least in Europe, to a large extent is LinkedIn. Where a lot of companies go to whether they want to promote stuff, create leads, downloads, or promote events. What's your take on LinkedIn?
Sam
I watched a great webinar on Brightvision about LinkedIn. This thing about if your average order size isn't 15k or up, LinkedIn might not be a fit, I totally agree with that. Because it behaves a lot like B2B publications; $100 per CPM, $10 per click, that's going to be a $20 per website visit. And what's that going to be on a cost per lead basis? Maybe $2,000. I mean, you better have an expensive product and a good sales team that close on those leads, or it's going to be upside down.
I do think they hang much better on a cost per video view. So, video is definitely something that everybody can do and feel good about the efficiency. Maybe it's two or three times more than Facebook, it's not so bad, it's not the 10 or 100 times more expensive than when you look at clicks and visits.
The audience is solid [on LinkedIn], but we can do those same audiences everywhere else. Sometimes it's just that feel good thing of "I know I have the right audience here, because it's all based on registration data".
“The audience is solid [on LinkedIn], but we can do those same audiences everywhere else.”
But as I mentioned before, building an audience based on industry, title, company size and location, we use NetWise, which is a great B2B data company. And we helped them along the way get plugged into LiveRamp, and you can bring NetWise stuff into LinkedIn as well. They have the self-serve platform now, where you can build those audiences, preview the sample contacts, review the metrics – make sure that the audience that you want is correct. And then you purchase it, you buy it on a cost per record basis. And then you own the name, company name, LinkedIn profile link, email, phone, post, everything that you can use to onboard and create custom audience, but also directly outreach.
Then the beautiful thing is you've got that list, that you can reference back to as these people become leads and customers, and you have that closed loop attribution. That’s sort of one way around LinkedIn. The other one is Seamless, which allows us to build a list in Sales Navigator and LinkedIn, and then export it to Seamless where they all append the B2B email, personal mobile phone, postal address. And then we can create a custom audience of that exact LinkedIn audience, and onboard that to Facebook, Twitter and Snapchat and run on essentially the exact same LinkedIn audience at 1/10th of the price on a CPM basis.
Jakob
That's so smart to hack the system. I suppose it's not open for everybody to work in those set-up system. How hard is it to get started?
Sam
No, it's not. We offer it as a service because we subscribe and pay a monthly fee to both of those. But a company can go and get their own seat or use a company like ours to access that data and just buy what they need on a per use basis.
Jakob
Another question I have is YouTube, what do you think about YouTube for B2B?
Sam
It's hard because of the targeting. They don't have that industry and title-based approach, so it's going to be off search intent. You're going to be able to identify your audience based on the way that they've searched and collect and the pages they visited. But you're not going to be able to go in and say, “I only want to talk to dermatologists”, or I only want to talk to “fin tech CEOs”. It [YouTube] is just different, but it's highly efficient, complete video views. Google Display Network is highly efficient on cost per click, cost per website visit, but you have made that sacrifice in terms of the audience targeting.
Jakob
A lot of a B2B companies these days run really targeted ABM campaigns where you want to pinpoint individuals on a specific company. Maybe five or ten companies, where you really want to talk to these five titles in each company. If you were a marketing manager in a B2B enterprise solution with a product cost that is above 15k, so a quite expensive offering you're promoting. What would be a good campaign setup from a promotion paid social perspective, that you would recommend?
Sam
It's almost not a great fit, because that list is so small. Anytime the audience size is that small, it's going to be really hard to spend on it. You’re going to have to be a little broader in terms of the audience definition.
“Anytime the audience size is that small, it's going to be really hard to spend on it.”
And you'll get them and some others. But then I think it's about everything else, it's about direct mail and connected television and outdoor. And just finding all the ways to reach them because they're so important to you. You're going to want to spend more than you can spend on them in paid social.
Jakob
So that's the problem with ABM campaigns from a paid social perspective, it's just hard to buy impressions from these 50 people. You need to find them, and then they need to click and interact.
In other words, you need to use many different channels not only paid social, but also direct emails and other ways to communicate.
Sam
I think a big thing in B2B and any kind of enterprise software, is this notion of an asset, a content piece, normally research based, but it doesn't have to be. But essentially, starting with their pain point, it's not about your product or the solution your product solves, but just the global issue that, we're all solving and build that asset.
“But essentially, starting with their pain point, it's not about your product or the solution your product solves”
IDG has band leads where they will do telemarketing basically to qualify the audience and say, “Are you this person? What's your timeline? What's your budget? Are you the decision maker? If you meet those criteria, we will give you this highly valuable asset that you want to learn about your pain point. And then we'll talk to you about the company, and then we'll talk to you about the solution.”
But it's taking that patience approach to just building relationship first. And we strongly believe that that makes sense.
Jakob
I agree. So, what is it you think is the most common mistake companies do in B2B when they set up their paid campaigns or paid social initiatives?
Sam
I think it's partly just the that's kind of complacency and habit to say, “I know that the B2B pubs are not great, but I just have to be there. Not being there with would be a mistake.” I think there is sometimes value outside of the media value, that's fine. If there's just a relationship, or some other reason that he'd need to be there great. But it's just about saying "Fine, like that's that, but let's get back to business. We can measure all the way through, and we should" so instead of saying “well, I spent this last year, let's do that plus inflation, or let's spend last because maybe we can get away with it.”
What we're trying to do is help people understand that you can't predict ROI. You can't have a reasonable estimate of the positive return that you can get with a marketing investment. And when you put it together that way, and you see it come true, it's the game changer. That paradigm shift has occurred, where instead of spending as little as possible and crossing your fingers, you're looking at how to invest as much as possible to maintain that steady state of positive return and start to test the waters on that point of diminishing returns.
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If you would like to learn more about Sam and his different projects, you can follow him on LinkedIn, or check out his website here. You can also listen to the full podcast episode here.
Would you like to learn more about Brightvision and how we work as an agency? If you are a B2B tech company and need support with ABM, marketing, lead generation and sales, book a meeting and we can chat!
