Google Adwords or LinkedIn Ads?
Time to read: 3 Minutes
For our June 2017 DC MarTech Talk, the topic was lead sources that make the sale. Based on many experiences, here we toss out a fairly standard performance comparison to determine what’s better: Google Adwords or LinkedIn Ads?
OF course, this is just a part of a larger discussion that considers on both marketing channels as well as lead sources. Not to scoop the ending, the answer is “it depends.” But as you read this blog, read it with consideration of your own needs.
Before launching into results, here’s the evaluation framework using the standard set of metrics.
Standard Lead Generation Metrics
1. Cost
Total and average
2. Conversion Funnel Metrics
- Marketing qualified leads(MQLs)
- Sales accepted leads (SALs)
- Sales qualified leads (SQLs)
- Wins
3. Average Sale Price (ASP)
Total Revenue/Wins
4. Return on Investment (ROI)
Revenue/Cost
5. Customer Lifetime Value
Revenue * average lifetime value of a contract (this is an average of all customers)
Length of Sales Cycle
Number of months it took from marketing contact to close
This evaluation framework define the same metric set both channels use. All very important to the ability of consistently compare and analyze each channel and lead source.
Classic Story of Minnows or Whales: Google Adwords or LinkedIn Ads
Using these metrics, let’s see what a $5000 investment in 30 days gets you. Of course, it’s last touch attribution, of where the lead flowed from – Google Adwords or LinkedIn Ads.
We’ll spare you the sales funnel flow numbers and cut to the result. After 30 days of deploying a $5000 investment, here is where things stood:
- Google Adwords generated 2x more leads than LinkedIn ads
- Google cost per Lead was half as much
- Adwords cost per MQL and cost per SQL was about 20% of LinkedIn, so way lower
- Google Adwords Cost per Win was 10% of LinkedIn ads
- Google leads had a sales cycle length of less than a month, while LinkedIn sales cycle was about 6 months.
- Adwords total revenue was about 5% of LinkedIn ads
- Google ASP is about 2% of LinkedIn’s ASP
- Google brings in lots of tiny fish, LinkedIn brings a few whales
So, the conclusion is that Google is great for catching minnows and LinkedIn is great for reeling in the whales. Google fills the funnel for the quick, small wins. On the other hand, LinkedIn Ads keep your major account team busy.
So what does this mean to you? Does this mean you should invest in both Google AdWords and LinkedIn ads? Should you invest in both equally? Especially since Google AdWords are significantly less expensive than LinkedIn ads.
The answer, of course, is never straightforward. Rather, it depends on characteristics of your market and where your business is on its growth journey.
Most B2B Firms Should Use Both Google AdWords and LinkedIn Ads
Every growing B2B company needs both, so the next question is how much marketing dollars do you spend on each?
For B2B companies just starting out, getting off the ground with Google AdWords is probably money well-spent. This is especially the case when your market has a large total addressable market and your product can scale with new demand.
Most SaaS apps fit this description. After all, there are huge numbers of customers both large and small. New demand is easily met by reselling the same solution over and over.
Large, Capital Goods Should Advertise on LinkedIn and Not Google
Other products, like large capital equipment, do not. Let’s say you sell airplanes to airlines or big carrier networking equipment to telecommunications companies.
There are a limited number of customers, but tend to be large (e.g., they are whales) with multiple decision-makers involved in the purchase. Further, each deal tends to be different. And they tend to be huge deals requiring significant customer education with long sales cycles. For markets like this, AdWords might not be where you want to spend the majority of advertising dollars. LinkedIn is probably a better investment.
Why? Simple. Whales swim on LinkedIn.
Think about Efficiency of Sales Conversions
But what if you’re a startup selling large capital equipment? What will Google AdWords deliver? It’ll definitely drive traffic to your web site. It’ll result in sales conversations. But how efficiently will it deliver sales conversions? Not very. But if you’re new, budget constrained, and still proving out your value proposition, those sales have a ton of value.
So if you’ve grown past the startup phase, and your value proposition is proven, there’s little value to having that same type of sale over and over again. At this stage, it’s likely time to scale back your Google AdWords investment and deploy those dollars elsewhere.
Hence, the general rule:
Once your base of smaller customers proves your company’s robustness – that it’s indeed enterprise class – then think about LinkedIn Ads. After all, investing in LinkedIn ads helps you move upmarket to catch a whale.
