Few SMBs make use of multiple online advertising channels. Facebook is the most cost-effective channel based on CPM and CPCI. It’s important to remember that every company is unique when it come to budget allocation
Data analysis and science are essential for any business operating in the SaaS (software as a service) market. They need to keep pushing forward to uncover those valuable insights that will make a real difference. The Cambridge MBA team used Adzooma’s vast data to find new ways for SMBs that could maximize their advertising spend through cross-channel marketing.
The Cambridge University team saw this as an opportunity to create some really unique insights. Even big players like Google and Microsoft have only data that is specific to their channels. Through Adzooma, the project provided anonymized data from thousands across all three major platforms. This will allow for a wider view and provide new insights.
These findings revealed that very few SMB customers use multiple channels (Facebook Google and Microsoft).
This was not part of the main project but it was an interesting analysis that we have stressed the importance of. While most people stick with Google as the place they believe they should be, it’s not always the best for every business. Being seen across multiple touchpoints, or even trying different channels, can make a difference in digital marketing success.
Based on both cost (CPM,CPC), and return (impressions/clicks), Facebook was the most suitable channel for SMBs. However, Microsoft came out on top when it comes to reaching a professional and wealthy audience.
Research has shown the importance of pre-defining your target audience. When choosing the right channel or channels for your business, it is important to think about what you want to accomplish with your advertising spend and who your target audience is.
What are you really trying achieve?
It is important to start thinking about your end goal from the beginning. Ask yourself who you want to target and how to reach them.
According to research, SMBs are most interested in acquiring new customers. This is followed by generating awareness, leads, and customers.
This is why the Cambridge team concluded that combining the traditional sales funnel and the customer lifecycle model was the best way for an SMB manage its marketing goals.
The team was able to use the overlay resolution method to calculate the cost impact on different marketing channels. SMBs could then determine the best platform to use when there are similarities.
The research revealed that the channel choice had the greatest impact on CPM and CPC. After establishing a link between cost KPIs and channel, further research was done to determine the average CPM across Google, Facebook and Microsoft Ads.
Although Facebook was the most cost-effective channel for SMBs, it was still recommended that businesses look at click-through rates from other channels to see if other factors like industry or geography might make a difference.
The results of a Google search suggest that you choose Microsoft over Google. However, Google is more popular due to its low cost and high reach. Microsoft can also be helpful as it has high-level targeting options and demographics that are suitable for certain business types.
What does your ad say?
A sentiment of the messaging is another factor many businesses overlook when choosing a platform.
This was an area that the research team identified as different depending on the media channel in which the advertisement appeared.
Microsoft was the most popular platform for positive sentiments with a CTR 4.2 percent. This compares to neutral’s 3.6 percent and negative sentiment’s 3.3 percent.
Google ads with negative sentiment were most popular among users. They had a CTR of 6.5 percent, compared to 5.7% for neutral or negative messaging.
It is important to spend the time to test your ads and find out what works for your target customers in order to maximize your spend.
Each business is unique
It is not a secret that a one-size fits all approach does not work. Every business is different, so their advertising spend and usage will be different.
As we all know, some people want to follow the statistics and what has worked in the past for businesses. However, this does not mean that every business will benefit from it. It’s important to be mindful of where your money is going and who you want to reach.
It is important to remember that while Google, Facebook and Microsoft Ads are most well-known online advertising platforms, you can also list your ads on Reddit, Amazon, or industry-specific sites like Capterra. These sites are effective even though they have fewer users and can be used as an additional platform to your primary one.
We hope this research has prompted SMBs to think more carefully about their target audience, and what they want to achieve before allocating advertising spend. We have shown that each of the advertising platforms examined in this study works well depending on the end result. We hope these insights will help SMBs achieve better overall results.
These insights help to determine the best way to leverage cross-channel partnerships for SMB customers. The data will be used for scaling Facebook opportunities and features, as Facebook appears to be the most popular channel among 70 percent of SMBs. Many of the insights from this study will be used to improve the core technology of Adzooma’s product.
Rob Wass is the CEO and Co-founder of Adzooma.
Akanshaa Khare, currently studying an MBA at Cambridge University, has five years experience in Product Management and three years experience as a consultant. She assists consulting firms like ZS Associates and BCG.
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