30-second summary:
- Very few SMBs use multiple channels for their online advertising
- Facebook is the most effective channel based on the cost for CPM and CPC
- It’s important to remember that every business is unique when it comes to deciding on budget allocation
For any business in the software as a service (SaaS) space, data analysis, and science are crucial to keeping pushing ahead to reveal those insights that can make a difference. With this in mind, the Cambridge MBA team leveraged Adzooma’s extensive data to identify new ways for SMBs to maximize their ad spending with cross-channel marketing.
For the team at Cambridge University, this was an exciting opportunity to produce some truly unique insights, given that even the big players such as Google and Microsoft only have data that pertains to their channels. The project promised to provide a much broader view and deliver new insights thanks to the access to anonymized data from thousands of accounts across the three big platforms via Adzooma.
A cross-channel approach
The findings immediately identified that few SMB customers use multiple channels (Facebook, Google, and Microsoft). Although this wasn’t part of the leading project, it was a fascinating piece of analysis, and we’ve stressed the importance of it a lot. Most people stick to Google, for example, as that’s where they think they should be, but that’s not always the best case for everyone’s business, and being seen across multiple touchpoints – or at least trying out multiple channels – can be crucial to digital marketing success.
The research highlighted the importance of pre-determining your specific target audience. Our analysis found Facebook to be the most conducive channel for SMBs based on cost (CPM, CPC) and return (impressions, clicks); however, Microsoft came out on top for reaching a more professional and affluent audience. Hence, when choosing the channel – or channels – for your business, it’s worth thinking about what you are trying to achieve with your ad spend and who you’re genuinely trying to reach.
What are you trying to achieve?
Right at the offset, it’s essential to think about your end goal and ask yourself who the customers you are looking to target are and the most efficient way to get to them. Existing research told us that for SMBs acquiring new customers was the most chased goal on the customer journey, followed by ‘generating awareness’, ‘generating leads’, and ‘retaining customers’. Considering this, the Cambridge team found that merging the traditional sales funnel with the customer lifecycle model would be the best way for an SMB to manage its overall marketing goals.
Overlapping resolution methodology allowed the team to determine the impact of cost on different marketing channels. This way, SMBs would choose the best platform to use when similarities occur. Having selected a connection between channel and cost KPIs, further research was conducted to determine the average CPM and CPC across Google, Facebook, and Microsoft Ads. Through the study, we found that the choice of the medium itself had the most significant impact on both CPM and CPC.
While Facebook was the most cost-effective channel on average for SMBs overall, the recommendations were that businesses should still look at the click-through rates of other media to determine whether other factors, such as industry or geography, could make a significant difference. If you choose between Google and Microsoft, the results suggest using Google due to its high reach and low cost. However, Microsoft could also be helpful, mainly as it offers high-level targeting and demographics suitable for specific business types.
