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Aug. 22, 2007 at 9:38am Eastern by Patricia Hursh
Low B2B Click-Through-Rate: Inexperience Or Wisdom?
Have you ever analyzed the click-through-rates associated with B2B search listings? Organic versus paid? Business versus consumer? The data is interesting... and can be interpreted in several ways.
It's hard to tell if business marketers are simply behind their consumer counterparts in terms of expertise and experience—or if they are smart enough to focus on success metrics that are more important than response rate.
Organic vs paid listings
A recent survey by Enquiro analyzed click-through rate (CTR) by position for B2B sites. Overall, seventy-four percent of business searchers click on an organic listing, versus the nineteen percent who click on a paid listing. This data is fairly consistent with past eye tracking (or heat map) studies that show where people tend to focus on a search results page.
While not shocking, these numbers often lead people to jump to an inaccurate conclusion: that search engine optimization (SEO) is much more effective than paid advertising for B2B sites. Those of us who have been involved in managing hugely successful B2B search advertising campaigns realize that statistics like these are interesting, but tell only a very small part of the story.
Business vs consumer
How do these stats compare with consumer CTRs? According to MarketingSherpa's Search Marketing Benchmark Guide, click-through-rate varies greatly by individual site, but the average CTR for all consumer ads is three percent while the average for all B2B ads is less than two and a half percent.
Again, most search advertisers realize that 2.4%—which represents the overall B2B average—is an interesting data point... but may not be very meaningful based on ultimate ROI. Let's explore the possible reasons for lower B2B response rates.
Lack of expertise and experience
One possible reason for the difference is that B2B marketers are not as experienced or savvy as their B2C counterparts, many of whom have been writing pay-per-click (PPC) ads for a longer period of time or hire a search agency to manage their campaigns.
A quick review of ads in several popular business categories indicates that, indeed, many advertisers are (1) not re-stating the search query (keyword) in their title or description, (2) not writing ad copy that is unique and differentiating, and (3) not providing a compelling call to action.
So, yes, there is definitely room for improvement, and as more B2B advertisers start to implement these best practices, CTR will likely increase. However, it's unlikely that these mis-steps are the sole reason for lower response. In fact, a similar review of consumer ads often leads to the exact same conclusion!
Lower response—by design
Perhaps it is not an issue of know-how or expertise. Perhaps B2B marketers are generating lower CTRs... by design.
For many advertisers, a high click-through-rate is not necessarily desirable. As I've written, many business marketers strive to pre-qualify clickers.
Why? B2B clicks are, in general, more expensive than B2C. Marketing Sherpa reports that the average B2C eCommerce click in 2006 cost about $1.12. Compare this to the average B2B service click cost of $2.20—nearly double. Yet, these averages hide the real challenge faced by many marketers, in very expensive categories where click costs are in the $20 - $45 range.
Pre-qualifying clickers
At twenty-five dollars a click or more, it's important to get the right person to respond. For many B2B campaigns, it's not about volume, but rather about the specific needs and characteristics of the clicker.
For example, if a B2B software company is targeting Fortune 1000 clients, they don't want to pay for small business clicks. To prevent this, their ad copy (and even their organic listing) may include words like "large enterprise solution" or "serving the Fortune 1000."
Qualifying statements can eat up precious real estate - especially when all you have is ninety-five characters! But, most B2B advertisers have found that pre-screening is worth the space and the effort.
But what about Quality Score?
As search advertisers know, two important factors in determining "relative ad position" are what you're willing to pay for a click (i.e. bid) and your ad's popularity or response rate. The more clicks you receive, the better position you'll enjoy for your investment. This is true of ad placement algorithms for Google, MSN and Yahoo.
Unfortunately, this focus on click-through-rate undermines a pre-qualification strategy. Regardless, I've found that, in general, pre-screening clickers improves overall campaign ROI—especially in expensive categories—even though Quality Score will suffer.
Balancing click quantity with click quality has always been a challenge, especially for B2B advertisers. The only way to find the "sweet spot" for your business is to test, measure, and evaluate ROI.
Determining ROI is relatively straight forward for B2B eCommerce sites. Things get a bit trickier for lead generation campaigns, which require a method of determining lead value as part of an often lengthy, complicated, offline sales process.
In my next column I'll offer tips on B2B lead generation campaigns. I'll cover the difference between an online inquiry and a true sales lead, the importance of a follow-up process, and ways to incorporate a quality feedback loop into your advertising programs.
Patricia Hursh is president and founder of SmartSearch Marketing, a Boulder, Colorado-based search engine marketing agency. You can reach Patricia at patricia@smartsearchmarketing.com. The Strictly Business column appears Wednesdays at Search Engine Land.
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