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Should You Pay More for Account-Based Advertising?

May 27, 2020 | By John Arnold

  • B2B advertisers should carefully weigh the pros and cons of account-based advertising
  • Account-based advertising can cost more, but it can be worth it if all benefits are leveraged
  • Scale and efficacy are keys to achieving success with account-based advertising programs

Many B2B marketers turn to account-based advertising to reach people who work at high-value target accounts. The exclusive targeting options and reduced waste are attractive benefits, but account-based advertising impressions can cost a lot more than ads targeted using content, keywords, and persona audiences, especially when folding in the cost of an account-based advertising platform license that powers the ad targeting and bidding. Can the extra cost of account-based advertising be justified?

The cost per thousand impressions (popularly known as the CPM) quoted by some account-based advertising vendors can evoke sticker shock at first, but account-based ads are worth the extra investment if B2B marketers weigh the pros and cons and choose the right amount of account-based advertising spend in the context of the entire advertising mix.

On the positive side, account-based advertising is designed to reach only people who work at specific accounts, thus minimizing wasted ad impressions. Account-based advertising also makes a bit of ad personalization possible on an anonymous touch, when only a person’s company firmographics are known in the moment of a digital interaction. Some account-based ad targeting platforms also allow the advertiser to combine first-party data with account detection, which makes even more real-time customization possible. For example, if an advertiser knows by way of the sales force automation system that a specific company has an opportunity in a specific pipeline stage, an account-based ad served to someone who works at that company may include a customized messaging that matches the pipeline stage context for that company — even on a first-time, anonymous touch.

An additional positive of account-based targeting is the ability to use the same account detection methods and resulting customization on other web properties, such as a website home page. With account-based ad customization combined with matching website customization, people who see account-based ads and visit the advertiser’s website home page can experience a similar customized message, even if they don’t click on the ads. To get the most out of account-based advertising spend, and the higher CPM rates, advertisers must take full advantage of all the real-time customization capabilities available through account-based ad targeting and first-party data integration.

However, it can be very difficult to achieve scale with account-based advertising. A target account list contains a finite number of company employees and buying groups who will browse the internet while specific ads are running. Competition can drive advertising bids higher while the number of possible impressions stays the same for all advertisers targeting the same accounts. This can result in an inability to serve enough ad impressions within a given budget.

Advertisers call this a pacing problem. Because frequency and reach are key, and account-based advertising budgets may sit on the sidelines unused, a multichannel or omnichannel strategy is required to achieve scale. Advertisers must use a mix of account-based ads across publishers and mediums, combined with other advertising buys and retargeting to ensure maximum reach, frequency, and impact.

To help justify the additional cost of account-based advertising, advertisers should use account detection and account-based audiences in analytics systems to test inbound ad traffic for efficacy. Use account-based analytics to make sure each account-based ad channel is attracting a high percentage of people from the accounts that are being targeted. That way, advertisers can show by what margin account-based ads are more efficient at reaching people at specific companies than other, seemingly less expensive tactics. If the efficacy reports show promise, account-based ads are worth including in a comprehensive advertising strategy.

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John Arnold

John is a principal analyst in the Demand and Account-Based Marketing Research Service at SiriusDecisions. He has diverse experience leading and advising revenue growth teams for startups, scale-ups and large enterprises; has been a published marketing author since 2007; and is a highly regarded B2B marketing thought leader, speaker, workshop facilitator and change catalyst. Follow John on LinkedIn.

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