What is paid acquisition? What role can it play in a successful marketing organization?

Paid Acquisition Marketing refers to the utilization of paid media channels to generate ROI – it involves allocating budget towards various paid marketing channels with the aim of getting a higher return. These channels can range from Google search and paid social ads to programmatic advertising through podcasts and other platforms. 

Think of paid acquisition marketing as throwing gasoline on the flames of your marketing efforts – it can serve as a powerful tool to amplify your marketing efforts. Paid marketing can significantly boost your reach and impact, leading to increased returns. 

Generally, paid acquisition is part of a larger strategy – for companies aiming to scale to $50M, $100M, or $200M in revenue, paid media will likely be part of their strategy, but it won’t be the whole story. Multiple successful channels are needed to reach these revenue goals. The role of paid acquisition in a company’s marketing function depends on the company itself. Factors such as the company’s ACV can influence where and how much should be spent on different channels. 

Paid Acquisition marketing continues to evolve – paid acquisition marketing continues to evolve with the advent of new media channels and advertising technologies. Staying abreast of these changes can help your organization maximize its marketing ROI.

What are the pros and cons of leveraging paid acquisition vs. other lead generation strategies?

Paid acquisition is a double-edged sword – on the one hand, it offers scalability and predictability, but on the other, it’s akin to renting space—once you stop paying, the benefits cease.

What do you need to have in place to execute on a paid acquisition strategy?

Understand your customer – knowing who they are, where they spend their time, and what triggers them to enter the market will inform your creative strategy and campaign goals. 

Understand the buyer’s journey to deliver the right offers at the right time – it’s important to align your offers with the customer’s stage in the buyer’s journey. This ensures that your marketing efforts are contextually relevant and effective. For instance, if they are at the top of the funnel, you might want to familiarize them with your brand before asking them to convert on a demo. Conversely, if they are ready to convert, you should aim to connect them with your sales team as quickly as possible.

Build out attribution and tracking – many companies waste resources by launching campaigns without a clear understanding of their success. Establishing an attribution and tracking system from the start will allow you to monitor campaign performance and make quick decisions about budget allocation or channel effectiveness.

Building your ICP

What are the steps to identifying and creating your ideal customer profile (ICP)?

Step one: Formulate a hypothesis on your target industry – start by forming a hypothesis about the types of companies, industries, and demographics that would be interested in your product or service. This is usually based on your basic understanding of your market and your existing sales data.

Step two: Analyze your CRM data for desirable outcomes – once you have a hypothesis, delve into your CRM data to identify the characteristics of your best customers. Look at factors such as deal velocity, conversion rate through the funnel, and ultimate lifetime value, among others. This quantitative analysis will help you understand what makes a good customer for your business.

Step three: Identify customer characteristics that correlate with those outcomes – after identifying a group of profiles that convert well through the funnel and are valuable to your business, examine their firmographic, technographic, and demographic information. This will help you understand the key characteristics of your ideal customer.

Step four: Build a digital ICP that you can target using enrichment tools – use the information you’ve gathered to build a digital ideal customer profile. This can then be used in tools like ZoomInfo and Revenue Base to target your marketing efforts effectively.

Step five: Gather feedback from sales and other stakeholders – sit in on sales calls, listen on Gong and Chorus, and get feedback from the sales team. Also, learn from other key stakeholders in the company, such as the head of product, head of sales, and head of marketing. This will give you a qualitative understanding of who your ideal customer is.

Step six: Combine qualitative and quantitative data to create an ICP – mix the qualitative data you’ve gathered from sales calls and stakeholder feedback with the quantitative data from your CRM to come to a conclusion on your ICP. This combination of data will give you a comprehensive understanding of your ideal customer.

The end result of this process is an ICP document – this document outlines the digital ICP and how it can be used to build audiences across various platforms. It serves as a practical guide for identifying and targeting the ideal audience.

What factors should you analyze to find your best customers? 

Consider quantitative factors like: 

• Deal velocity – the speed at which a customer moves through your sales funnel can indicate their level of interest and potential for a long-term relationship.
• Conversion rate through the funnel – a high conversion rate suggests the customer is highly engaged with your product or service and is likely to become a loyal customer.
• Total lifetime value – customers with a high lifetime value are not only more profitable, but they tend to be more loyal and more likely to recommend your product or service.
• Firmographics – understanding the characteristics of the companies that make up your customer base can help you identify patterns and trends that inform your strategy.

Direct customer interaction is essential to finding your best insights – getting on the phone and listening to your customers can provide invaluable insights into their needs, preferences, and pain points. 

Account management team insights often prove valuable – collaborate with your account management team, they can provide insights into the best use cases for your product and who is happiest with it. 

Net Promoter Score (NPS) is a useful indicator – a high NPS score indicates that your customers are not only satisfied with your product or service, but they are also likely to recommend it to others. However, it’s important to focus on the economic buyer, not just the end user.

How do you use your ICP in paid acquisition marketing? How should segmentation factor in?

A key feature of the digital ICP is its ability to be translated into targeting strategies across various platforms – whether it’s LinkedIn, Google Ads, or leveraging data providers like ZoomInfo, the digital ICP provides a tactical approach to audience identification. This approach can be used across different platforms, even beyond email, to effectively target your ideal customer. 

Segmentation allows you to come up with the right creative for the right customers at the right time – a lot of the difference between success and failures is a result of not creating tight enough segmentation within the audience. For example, somebody who sees their competitor going through a similar problem in a case study will be much more likely to be interested in your solution. Segmentation should be a part of any ICP exercise and allows you to be more effective at the top of the funnel and in follow up. 

Your segments may affect your marketing mix – a few years ago, Google Search was more focused on the SMB market and you’d rely on Google search for SMB, while LinkedIn was for larger businesses. This is change but segmentation is still a consideration when evaluating your channel mix. As you start to think about targeting on podcasts, videos, or other formats, segmentation informs where and how you can access those audiences.

Building your buyer’s journey 

What are the stages to consider incorporating into your buyer’s journey?

How should you align marketing activity with your buyer’s journey?

Consider the steps before a lead becomes known to you – it’s important to understand what’s happening within the buyer’s company before they become a known lead. This insight can help shape your marketing and sales strategies. The lead metrics are essential but they shouldn’t be the only metric you pay attention to.

Believe in the power of a marketing qualified lead (MQL) – an MQL, or a lead that has shown intent to purchase your product, is a critical stage in the buyer’s journey. This could be demonstrated through actions such as requesting a demo, signing up for a trial, or using a free tool on your site. The lead should also match your Ideal Customer Profile (ICP) to warrant engagement from your sales team.

Use MQLs as a feedback loop for marketing – the sooner you can identify or qualify a lead, the better. This becomes a critical feedback loop for the marketing team to understand which campaigns are most successful. It also helps to train the algorithms on Google Ads and other ad networks.

Understand what drives qualifying pipeline – consistent conversion rates from MQL into Sales Qualified Lead (SQL), and from qualified pipeline into a customer, are key. Identifying choke points in the buyer’s journey where potential customers are dropping off can help improve your process. This could be due to factors such as your demo process not resonating, or not qualifying the best leads for your sales team.

Monitor pipeline attribution – once pipeline is attributed, it’s important to monitor how your sales team is managing it. Are they being too aggressive with pipeline numbers, or too hesitant to identify opportunities? Understanding this can help improve your sales process and ultimately, your conversion rates.

Create and distribute content that is tailored to each stage of the customer journey – for example, if you were selling an ATS you might offer job descriptions on your site to attract those in the awareness stage, then provide an easy way for them to post that job to multiple job boards to address their pain point. This not only helps them solve their immediate problem, but also introduces them to the broader capabilities of your product.

Targeting customers

What channels should you consider leveraging for paid acquisition?

Paid Search – Google search can target a broad range of companies, making it a successful channel for many businesses. The key here is that it allows you to target buyers with intent. When building a paid acquisition strategy, getting that quick feedback is crucial. You can identifying those actively searching for products in your category quickly.

Paid Social (especially LinkedIn for B2B) – social media is a valuable channel once you understand your customer. Knowing what makes your customers convert allows you to create effective content for LinkedIn. The keys to success on this platform are creative content and targeted advertising.

Review sites like G2 Crowd and Capterra – leveraging these platforms can provide valuable insights into your customer base and their preferences.

Tip: Learning lessons from Google ads can fuel success on paid social channels – these channels have a different dynamic in terms of user conversion. Many companies fail to leverage the insights they gain from Google ads to succeed on paid social channels.

How should you build and evaluate your mix of channels? 

Align your channel mix with your overall goals – for instance, if you’re a performance-driven company, you might prioritize channels that efficiently drive and develop qualified pipeline.

Consider where you want to reach your target audience in their buyer journey – you might want to invest more in channels that reach people who are already in the market for your product or service, vs. those who are just beginning to develop awareness.

Diversify away from Google before maxing out the inventory – many companies become reliant on Google as it’s a high intent channel. However, it’s important to diversify before you exhaust all your resources on Google. Monitor impression share and other signals to understand your share of the overall Google search volume and start testing other channels sooner rather than later.

Use insights from sales team conversations to inform creative and targeting – understanding the challenges companies face before they reach out to you can help inform your creative content and targeting strategy on unpaid social and other channels.

How should you target prospects within your ICP? How can you leverage your ICP to target customers across different channels? 

Build custom audiences – internally built custom audiences can be a powerful tool to leverage your proprietary database for advanced audience segmentation. This approach varies from channel to channel, but the main idea is to use your own data to create a more targeted audience.

Leverage intent data – companies should consider how they can use intent data from tools like ZoomInfo, Bombora, and 6sense. This data can help identify companies that are entering the market or experiencing pain points that your product or service can address. 

Learn from Facebook’s broad algorithmic approach – for a long time, Facebook focused on tight audience segmentation. However, as their algorithm improved, they shifted towards targeting broader audiences and relied on their algorithm to deliver the right creative to the right people at the right time. This approach can be a valuable lesson for companies looking to optimize their audience targeting strategies.

Funnel economics 

How do you evaluate your funnel economics to measure success in your paid acquisition activities?

For KPIs, look at:

• Marketing Qualified Leads (MQLs) 
• Qualified pipeline
• Customers driven

Growth is the ultimate metric to judge paid acquisitions success – growth return on investment is the ultimate metric you should be looking at. This is the key indicator of success in paid acquisition. 

How should you approach attribution in paid acquisition marketing? 

Consider the first touch and the last – the first touch is what initially brings a customer to your product. It’s the first point of contact and the first opportunity to make an impression. The last touch is equally important as it’s the final interaction that leads a customer to convert. It’s crucial to understand what brought them back and led them to make a purchase. 

Every brand touchpoint is Important – each interaction a customer has with your brand contributes to their overall experience and decision to purchase. No single attribution model can tell the whole story—in a B2B setting, the buying process is complex and can be influenced by multiple people. If one person is researching a product, it could be because another person instructed them to do so. This makes it challenging to determine the most critical touchpoint. 

Use data triangulation to attribute – no single attribution model will provide the magic formula for understanding your customer’s journey. Instead, you need to look at multiple data points to get a comprehensive view.  Aggregate information from:

• Web analytics – particularly good at telling you where users came from, what they did once they were on your site, and how they converted. 
• CRM data – can provide high-level traffic source information, tell you what page users landed on, and what creative they came in through. It can also provide insights into the customer and what piqued their interest. 
• Feedback from the sales – encourage your sales team to ask leads how they heard about your product and what excited them about it. This data can be manually entered into the CRM for tracking.
• Direct customer feedback – consider including a question on your website form asking how they heard about you. 

What kind of tools do you need to track success? 

Attribution tools – these are essential for tracking and measuring success in your data acquisition programs. They provide information about the campaign that brought users in, the traffic source, and the conversion path. They also shed light on the buyer’s journey after the user starts interacting with your sales team. Examples of attribution tools include web analytics and marketing automation systems.

Social media platform analytics – platforms like LinkedIn provide data they have access to.You can get data on click-through rates, ad frequency, and the audiences your ads are reaching. It’s recommended to pass back as much data as possible into these platforms. For instance, if you’re using HubSpot, it’s easy to pass back pipeline and qualified lead information into Google Ads. This helps with the bidding algorithm and reporting within the platforms.

Consolidate your reporting data from different tools – often, the data is available and accessible, but it’s spread across different platforms. Consolidating this data into one place makes it more useful.

How do you come up with a good bidding algorithm? 

Bidding algorithms are crucial to marketing success – these algorithms have evolved from cost-per-click (CPC) to cost-per-lead or return on ad spend. This shift has made the quality of data sent into these platforms vital for optimal performance. Incorporating bidding algorithms into your marketing strategy is essential  to help your marketing team stay competitive and maximize your return on ad spend.

Facebook’s customer identification algorithms are a competitive edge – to compete with Google, Facebook developed sophisticated algorithms to identify customers likely to purchase a product. These algorithms, combined with data from customers who have made purchases or are qualified leads, have allowed Facebook to gain market share.

Data quality is becoming increasingly important – as bidding algorithms evolve, the quality of the data fed into these platforms becomes even more critical. High-quality data can significantly improve the performance of your marketing efforts.

How much should you spend on paid acquisition marketing?

The average SaaS company spends a little over $1.50 for every dollar of new revenue they bring in – it can be more or less depending on the specifics of your market—but this is an important metric to consider. 

The ACV of the product should guide your spending – the average contract value (ACV) of your product should be a function of what you think you need to spend to get true learnings. The higher it is, the more you’ll have to spend. This is a telling metric that all companies should pay attention to.

Spend enough to learn quickly when starting – when you’re first dipping your toe in the water, you want to make sure you’re spending enough so you can learn quickly. This variable scale will differ for every company.

Overall 

What are the most important things to get right? 

Make sure that you’re getting in front of the right audience – you can throw all the resources in the world at paid acquisition, but if you’re getting in front of the wrong people it won’t make a difference. This includes finding the right ICP and the right personas who will make the buying decisions. 

Get the right creative in front of your audience – make sure you understand your audience and know what creative will resonate with them in order to get them interested and converting. Video can be an incredibly powerful format, but it’s different for every industry. One of the reasons case studies are so successful is you have people talking into a camera and that’s a really engageing experience. Data can also tell a really nice story about the results you’ve been able to get. 

What are common pitfalls? 

Companies who don’t give acquisition enough time – a lot of companies shut off their paid acquisition efforts too quickly before they have a chance to be successful. 

Companies who aren’t focused on the right data/goals- if you don’t know what success looks like and what you’re trying to do, you can spend money for months without really knowing if you’re making a difference. MQL metrics are critical because it gives you a quick feedback loop to understand that you’re getting the right leads in the door to pass to sales.