How-to-Guide: B2B Media Buying
Highlights from this Episode
Hosts: J. David Green and Jonathan Greene
Duration: 14 minutes
[0:00:11.8] JG:Ladies and gentlemen, welcome, the Green & Greene show episode seven. I’m Jonathan Greene. Today, we’re going to start a mini-series. What we want to talk about for the next few episodes, few weeks, however long it takes, are our principles for effective media buying, particularly in the B2B space, but I think we’ll probably have to start from the beginning and work our way there.
Today, my guest, per usual, is J David Green. Thank you for being with me.
[0:00:40.8] JDG:Hey, everybody.
[0:00:42.6] JG:We’re going to talk about the various B2B media buying price structures, cost models that are available and some of the implications of them and how they are typically used. I think if we can get through that today day, we will be very close to our allocated time.
The Different B2B Media Buying Formats
Traditionally, there are a few formats. There is CPC, which stands for cost per click. There is CPM which is cost per thousand. The M is just to confuse you, so let’s call it cost per thousand impressions. It’s an impression-based model. There’s CPL, which is cost per lead. In recent years, we’re starting to see things like CPI and CPA as well, which are more format-specific.
CPA will be cost per action. You see that a lot in retail-type environments. CPI is cost per install. You see that in a lot of SaaS businesses and ap- based business and things like that. Generally speaking, we’ll focus CPM, CPC, and CPL.
Do you have any thoughts on that before I sort of jump in there and tell what I think about these things?
[0:01:59.2] JDG:I wonder why somebody started using M. How many people think of thousand and go back to the roman numerals. What are people thinking? I don’t know, maybe that’s when everybody still spoke Latin. It seems very curious.
[0:02:18.6] JG:Considering we didn’t have this prior to about 2004, I seriously doubt that. But yeah, who knows?
Types of media within each B2B Media Buying Format
Let’s talk about the types of media that you typically see associated with each of these things. We’ll start with CPM. CPM, cost-per-mille, is the cost per thousand impressions you will get for whatever amount of money you pay for the CPM.
If you have a $30 CPM, that means you’re going to pay $30 for every thousand impressions, whatever your media is. It’s usually used on banners and display and things like that. As such, it’s typically positioned high in the top of the funnel and used predominantly for branding and awareness. There are obviously exceptions to each of these. However, if you’re trying to use CPM media buys for the very bottom of funnel, I think you will find that difficult. Do you agree with that, Dave?
[0:03:20.6] JDG:Yeah. CPM is often difficult anyway, but certainly, when you have some sort of expectation about more qualified people coming into the bottom of your funnel, you’re going to be disappointed.
[0:03:39.8] JG:Maybe in the next episode, we can discuss how you and I have studied arranging some of these tactics and layering them upon one another to achieve a desired result in terms of moving people through a funnel. For now, I think it’s important to understand CPM as a very top-of-the-funnel mechanism, used predominantly for branding and awareness purposes.
You’ll see CPC on things like native advertising. You would see CPM in Taboolaand Revcontentand these kinds of platforms. You’ll also see it used on most display advertising, at least as an option. Facebook has a lot of different pricing model options, but CPM is the backbone for most of them. For instance, timeline ads, as a matter of fact, can be used for demand generation, but they are still based on CPM, which is, essentially, the number of people who put eyeballs on the media.
Comparing and contrasting that with CPC, cost per click is probably like the traditional Internet advertising modality. It started back with Google when Google first allowed search engine advertising, and if you’re a real nerd, maybe a few platforms prior to that, but nothing most people would recognize. It has to do with the number of times a link or a piece of media is clicked.
Instead of paying for impressions now, you’re only paying for people who are actually clicking or interacting with that media. That being said, it does tend to exist a little further down in the funnel than the very top level. Usually, it can be associated with intent through various methodologies. When we’re dealing with clicks, it’s all about traffic. It’s all about directing traffic to appropriate properties. Where CPM media is about directing attention, CPC becomes about directing traffic.
As such, I use them more for retargeting purposes, and we’ll get into that more in the next episode, but also for demand generation purposes in some instances. I might run CPM campaigns and then capture that traffic in some way utilizing pixels, or however the methodology is set up, and then use CPC to mine that for interest. That’s one way to go about doing that, but it does exist a little further down in the funnel than CPM.
CPL is cost per leads, so this is yet another evolution, another big step down the funnel. Typically, this exists towards the bottom of the funnel which is where we want to actually operationalize people’s interest and intent in working with our business by capturing an actual lead. This usually consists of contact-level data, you know, operates with a lead gate, things like that. However, there are some formats now on Facebook and other display platforms that have built in integrations so that you don’t necessarily need the lead gate. You can just push a button and get a lead, but the quality of those is suspect undergeneral terms. That’s at the very bottom of the funnel.
I’m going to pause right there and I’m going to let you get a word in, Dave. What do you think?
[0:07:13.2] JDG:I was going to add, Jonathan, that depending on the industry you’re in, you may find out that a particular media company you want to place ads with does not offer cost-per-lead advertising. You have to understand that not everybody’s in that game. It’s perceived as having a little bit more risk for the publisher and some people have shied away from that and don’t offer that as a possibility.
[0:07:44.4] JG:There is some nefariousness, for a lack of a better word, that can be associated with CPL media buys. There are a lot of unscrupulous characters who sell leads that may or may not be as qualified as you would like. Really, the only way to vet them is to buy the leads, push them into whatever your marketing apparatus is, and then see the down channel results, over time, which may or may not be an acceptable level of risk given a particular business.
[0:08:19.3] JDG:Therein lies the big conundrum. On the one hand, I think all of us are attracted to a low cost related. It seems like it makes sense, and sometimes it does and sometimes it doesn’t. As you said, you really have to kind of test and see if it can work or not in a particular case.
[0:08:42.0] JG:I’m going to take just a few seconds and talk about the two lesser known formats that I mentioned a minute ago. Even though it’s not pertinent to our business, I’m sure it’s probably pertinent to someone’s business, which is cost per action. You see a lot of this in the eCommerce space, where the action would be a purchase action. As such, that is absolutely the terminal position in the funnel for eCommerce-type businesses.
What’s really great about that is that it’s usually highly trackable. You can get instant ROI numbers out of it, which is the holy grail of modern marketing. However, you really don’t see CPA outside of ecommerce, with the exception of the SaaS industry, which is cost per install. I tend to think of that as a cost per action, as well. It’s just a different action. One is a purchase action, one is an installation, which usually involves a purchase of some sort.
You know, I strain to see the difference in most cases but those are terminal funnel activities, generally speaking. That would be the difference between CPL and CPA. CPL is low level funnel activity. It’s near the bottom of the funnel, but we still have to do something to work that opportunity into revenue. Whereas, a CPA, generally, is associated with revenue. That’s a minute but interesting difference between the two.
[0:10:08.5] JDG:Jonathan, I know we’re running out of time, but given that you joined LeadCrunch a few months ago and have been looking at a whole set of new B2B marketing vendors, it might be interesting to share, at a high level, a few of the impressions that you’ve had so far, without naming names?
[0:10:31.0] JG:It’s very easy to buy CPM-style media and throw your hands up in the air and say, “This is not working,” and walk away from it. It will generate a ton of junk impressions and you’ll end up seeing not a lot of needle-moving. In the B2B context, I’ve found it’s very interesting with CPM type media buys to use them for testing purposes in order to validate which media is playing well in the marketplace, in general.
For instance, I bought a whole bunch of CPM native advertising and used it to plug ebooks that we have written to see which one gained the most traction. Then, I was able to take what I learned from those experiments and roll that into slightly more expensive CPC media. If we are not naming names, I’ll just leave it at that, and say, “Okay, I know this eBook outperforms this other eBook in the general population based on what I have done with native advertising.” That is actually very valuable learning. I am very happy to pay 500 or a thousand bucks to learn something like that because now I am going to go spend $5,000 on a CPC medium with a product or a piece of information that I already know plays well in the marketplace.
It saves me a ton of money with experimentation and more expensive down-channel media types. Generally speaking, you are going to pay more in a cost-per-click format than you do in a CPM format. Then, you are going to pay more for CPL format than you pay for a CPC format. It makes sense to utilize the top-of-funnel, cheaper medium to the extent possible to learn as much as you can about your audience and their needs and their pain points, so you don’t have to spend money testing in the lower, more expensive medium.
[0:12:26.8] JDG:What do you think we should talk about next time in this area?
[0:12:30.0] JG:I think it would be cool to get into actually how we’re actually using these media for one episode and just talk about how you might think about layering these on top of one another. I think people forget the old MarketingSherpa/MECLABS adage that the funnel is actually inverted, and people are falling out of it rather than falling down through it. You have to curate your content. You have to move people through that process in a very intentional way.
Maybe we’ll just give a brief overview of how we are using these various media types to move people through.
[0:13:04.9] JDG:Then, maybe in a future episode, let’s really peel the onion on cost per lead and talk about what are the things that make a lead cost more. How do you evaluate that? How do you approach those kinds of things? What kind of options do you have there?
[0:13:25.2] JG:We’re in the development cycle. I think we’re nearly done. We’re approaching the finish line on a calculator that people can use just as a sanity check on what they’re paying per leads. My hope is that, by the time we do the next episode, we might have a URL for you to go ahead and jump on there and see if what you’re paying makes sense in a general way. That would be pretty cool.
[0:13:52.6] JG:All right, well, that’s episode seven. These things go so fast, I always feel like we didn’t really say anything, and then I go back and look at it and it’s 15 or 20 minutes of really dense information. It just goes so fast when you’re on this end of the microphone, you know?
[0:14:09.1] JDG:Yeah, it sure does. Well, thank you, Jonathan.
[0:14:12.2] JG:It’s my pleasure and I hope you guys are all having a great day and we’ll see you on episode eight. Talk to you soon.[END]