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We often hear marketers tell us that Customer Acquisition Cost (CAC) is getting higher, along with the cost of running paid ads. At the same time, we’ve noticed an interesting trend where more and more B2B SaaS companies are choosing to invest directly in creators by sponsoring their content (i.e. newsletters or podcasts), or working with influencers or ambassadors who can promote their brand.
We want to understand why companies are doing this, and help our B2B audience learn if sponsors or influencers might be a viable channel for them to test.
For today’s report, we surveyed 44 B2Bs:
Let’s get started.
So what’s the game plan for B2B businesses in 2023?
With the current economic landscape, a lot of businesses will likely tighten their belts and look to reduce ad spend by prioritizing the channels with the highest ROI.
We asked our respondents what would be the one channel that they would focus on in 2023.
If they had to pick just one channel to invest in in the future, more than half of the surveyed companies would choose ads, 31.82% would choose Influencer marketing and 13.64% would choose sponsorships.
Paid ads have been the go-to option for a long time, so this number doesn’t come as much of a surprise. But we wanted to dig a little deeper and compare this with our benchmark data.
According to the Digital Advertising Cost Benchmarks for B2B Companies, B2B companies invested over $2,000 in Google Ads in February, followed by Microsoft Advertising, LinkedIn ads, and Facebook ads.
As expected, TikTok ads are not as popular to invest in as ads on other paid advertising channels.
Here are the exact numbers:
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Next up, we wanted to know how much B2B companies spend on paid marketing each month and how they allocate their budgets.
The general rule of thumb for B2B businesses is to reallocate between 1% and 9% of annual revenue to paid marketing.
This depends a lot on the size of the business, with bigger brands usually on the lower end because they already have widespread recognition.
When we asked the agencies that participated in our survey to state their average monthly spend per B2B client – the average was $13k per month.
Furthermore, companies usually allocate more than 60% of that budget to ads, followed by Influencer marketing (22%) and sponsorships (16%).
Related: Cost-Efficiency Showdown: Paid Search vs Paid Social for SMB Advertising
B2B companies take several factors into consideration when devising an effective marketing campaign, including the target audience, the end goal, the nature of the product/service being offered, and more.
Paid ads have been on the rise for years now with platforms like Facebook and LinkedIn offering a lot of personalization capabilities to advertisers, allowing them to reach specific audiences faster and easier.
Sponsorship campaigns can be an effective way to build brand awareness and credibility within a specific industry. B2B companies may sponsor events, trade shows, or industry associations to get their brand in front of key decision-makers and influencers.
Influencer marketing was frowned upon for a long time in B2B but is now growing in popularity. In fact, 86% of B2B brands consider their influencer marketing successful.
This type of marketing involves partnering with industry experts or thought leaders to promote a product or service. B2B companies may work with influencers to generate buzz around a new product launch or to position the company as an industry leader.
In our survey, we found that all of these channels – ads, influencer marketing, and sponsorship – are considered to be at least somewhat effective.
But interestingly, about 20% of companies we surveyed never used sponsorships or influencer marketing.
Related: Measure Influencer Marketing ROI with These 8 Strategies
Most B2B companies in our survey picked ads as their go-to channel for 2023, with influencer marketing coming in second and sponsorships currently being the least favorite option.
We asked them to break down why they chose those specific channels, how they’re using them, and if they had any interesting tips to share.
Paid social ads seem to be the most popular among B2B marketers, and for good reason.
Most social media platforms have now developed robust personalized targeting features that allow B2B companies to reach very specific audiences and convert them into leads.
LinkedIn has especially grown in popularity over the last few years with one of its recent studies showing that 89% of B2B businesses find it the most effective channel for lead generation.
Chris Wilks of BrandExtract is one of our respondents who focus on LinkedIn advertising.
He explains that the “B2B audience is very active on LinkedIn and the targeting options that the platform offers are some of the best available. The more targeted brands can get, the more they are able to offer a message that really resonates with the audience. Not to mention, LinkedIn has various ad delivery options that can help for a variety of different objectives.”
Solomon Thimothy of Clickx also opted for paid ads because “compared to sponsorships and influencer marketing, I have full control over what happens with my ads. What I want to tell people, the creative to get my point across, what my call-to-action would be, how much money I’ll need to spend, if I need to split-test my ad, I mean there are a lot of variables which I can solely control my ad.”
Solomon explains that this isn’t the case with sponsorships and influencers and that these two channels don’t give your business much of a say.
“With sponsorships, your only option is to either take it or leave it. I can’t personalize or customize my ads using the sponsorship channel. When it comes to influencer marketing, it’s harder to control. It’s like a 1099 contractor you can’t tell them what to do, but you can only get them to do something for you. There’s the least amount of control of here, the bigger the influencer, the less chance they’d listen to how you want things done.”
Related: Comparing Facebook Ads and LinkedIn Ads for B2B: Where to Invest Your $2,000 Monthly Budget?
B2B Influencer marketing involves partnering with influential individuals or companies in a particular industry or niche to promote a B2B business’s products or services.
The goal is to leverage the influence of these individuals to increase brand awareness, credibility, and ultimately, drive sales.
The influencer may be an industry expert, thought leader, or even a well-known brand that has a large following within a specific target market. These influencers are typically seen as credible and trustworthy sources of information, and their endorsements can help to build trust and establish a B2B business as a reputable authority within its industry.
Influencer marketing is still more prevalent in the B2C industry, but Dan Gray of Vendry believes that B2Bs are missing our on the opportunity to leverage influencer marketing.
“There’s still massive opportunity to leverage influencer for B2B products. While the consumer influencer space has been flooded and costs are rising for businesses, their is a ton of white space for B2B organizations to leverage influential accounts on sites like Twitter or LinkedIn.”
Dan Gray
CEO at Vendry
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Gray goes on to explain that “whether leveraging a flat rate, commission or equity model, there are a lot of good ways to incentivize influencers that B2B buyers look for when making purchase decisions to recommend your solution.”
Alex Birkett of Omniscient Digital shares a specific influencer marketing that he would focus on:
“The real answer is I would invest in podcasts, which is largely based on influencer marketing. Ads are rarely effective for agencies. Sponsorships are hit or miss. But people trust influencers, and we need a high level of trust to close deals.”
B2Bs use sponsorship marketing to provide financial or other support to an event, organization, or individual in exchange for visibility, brand recognition, and other benefits.
Sponsorships are often used to increase brand awareness and establish a B2B business as a reputable authority within its industry.
The business may sponsor events such as conferences, trade shows, industry events, or organizations such as trade associations or non-profit organizations.
Victor Karpenko of SeoProfy shared how sponsorships in the digital sphere have helped his business.
“We regularly post informational articles about our business on sites close to us regarding the subject matter. These investments are worthwhile for the following reasons:
Even though our survey shows that most B2B businesses still prefer paid ads, that doesn’t mean they’re always the best solution for every organization.
So, when exactly should a B2B company invest more in paid partnerships?
Here’s what we gathered from our respondents.
New B2B businesses could benefit from paid partnerships because they can help build trust and credibility with target audiences a lot faster.
By partnering with established influencers or other businesses, you can leverage their existing networks and gain access to their followers and customers, which helps increase your visibility.
Alex Myers of The SEO Works agrees and adds that paid partnerships “can be good channels for initial awareness-building when your organization is new or emerging. They can help you build that initial audience, and get your brand on the map so to speak.”
He also suggests considering paid partnerships “if your service/product offering has radically changed since it can be a direct way of moving sentiment.”
Is there a big event coming up and you know a large sample of your customer base is going to be there?
Sponsoring these types of events can give you direct access to your target audience and adds a bit of a personal touch since you’ll demonstrate your commitment to the industry.
Kenneth Burke of Text Request advises that in these cases, you should “go big.”
“People can really only pay attention to one or two sponsors, so you’ve got to be the lead (or the lead in your category).”
In some cases, sponsorships can be a win-win for both the company and the local community.
B2B companies can provide funding and support to local causes and community initiatives, which can have a positive impact on relationships with customers and stakeholders.
Additionally, supporting local causes can help to demonstrate the company’s commitment to corporate social responsibility and sustainability, which can be an important consideration for many consumers and stakeholders when making purchasing decisions.
Phil Gregory of Peak District SEO mentions that by diverting funds into local causes that need a funding boost, “your B2B business can get some press coverage and increased local/regional visibility.”
No matter which channel you choose to prioritize, you’ll need to keep close track of your performance data to reach their full potential.
But to really stack the odds in your favor, you also need to know what your competitors in the B2B space are doing.
Aside from industry papers and reports, finding out what others are doing has been pretty much impossible.
Not anymore.
With Benchmark Groups, you can instantly find out what companies similar to yours are doing and benchmark your performance against their data.
It’s anonymous, easy, and most importantly, it’s completely free.
All you have to do is find a cohort that matches your parameters (revenue, industry, size, etc.) and connect your data source.
If you’re an existing Databox user, your data sources will be connected automatically.
And if you’re not… you’ll get a free Databox plan that will help you streamline the benchmark data monitoring and reporting process with state-of-the-art dashboards.
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Filip Stojanovic is a content writer who studies Business and Political Sciences. Also, I am a huge tennis enthusiast. Although my dream is to win a Grand Slam, working as a content writer is also interesting.
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