What is the real cost of running account-based marketing?
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You may have heard of the results companies are seeing with account-based marketing (ABM) and want to know what it will take to make it work for you. In particular, will it fit into your budget?
Like any digital marketing campaign, the cost of running ABM campaigns consists of multiple components with multiple line items in each component. ABM components include your technology stack, your assets, your channels, and the expertise to run and orchestrate it all. What can you expect to spend on each? What variables come into play? What kind of return can you expect from your investment?
Let’s break it all down.
How to think about ABM budgets
You may have seen the Forrester report who found that the average annual budget for ABM is around $350,000 (excluding staff costs) and pilot campaigns around $200,000. He found that more mature programs with proven value have budgets around $600,000, and budgets for established programs at larger companies can run into the millions.
While these averages are a good starting point, smaller organizations shouldn’t be put off by the price until they learn more, and businesses of any size should keep in mind that these results may have already changed. Forrester found that 70% of companies expect the average cost to increase between 2020 and today.
Related: The Rise of Account-Based Marketing
The best way to think about ABM budgets is to understand its components, your KPI priorities, and the right budgeting methodology.
- Understand ABM components. Tools, processes and people – like any digital business, you need all three to run ABM campaigns. The number of accounts and people within those accounts that you want to target also determines your budget. ABM components include:
- Development strategy
- Tech Stack
- Asset Creation
- Paid advertising channels
- Expertise to run campaigns and analyze results
- Determine the relative importance of insight and commitment. Are you primarily looking for insight or engagement from your ideal customer persona (ICP)? If you want to better understand the intent and pain points of your visitors, you’ll want to allocate more of your budget to insight. You’ll use this information to create targeted KPI content and give your team the perspective to make informed campaign choices. On the other hand, if your targeted KPI is in the same industry or niche, you’ll want to allocate more of your budget to engagement because the information provided will be similar across all accounts in your KPI.
- Use the right budgeting methodology. You can use the same budgeting approach for a pilot ABM or 1:many ABM campaign as for a traditional digital marketing campaign, but budgeting for 1:few and 1:1 campaigns is more complicated and fluid. Custom ABM campaigns focus on targeting individuals within accounts – cost is determined by account value, not a fixed budget. The more valuable a particular account is, the more you’ll want to spend on it. Account values often reveal themselves during the campaign. So you’ll want to use an account-based methodology with more flexible line items.
Related: Account-Based Marketing is the Magic Wand of B2B Marketing
How to Price Technology and Expertise
While the actual dollar costs of targeting specific accounts and individuals are too variable to cover here, we can quantify the cost of technology and expertise.
- Budget for the tech stack you need. You will need to subscribe to a few key platforms to run ABM. The cost of your combined technology stack depends on the size of your organization and the platforms you choose. You can expect to pay between $165,000 and $325,000 in total for the annual licenses needed to run ABM.
- Budget for the channels you need. Targeting accounts with the right messages at the right time means putting your assets in the right channels. ABM channels include programmatic, content marketing, paid search, SEO, paid social, email development, and online giveaways. The total cost of each channel includes the creation of the assets and their execution in the channel. Although spending on each channel varies widely from campaign to campaign, determining an overall budget for paid ads is part of your campaign strategy. It’s best to stay flexible with specific allocations so you can spend more on channels that prove to perform better as your campaign progresses and less on those that don’t.
- Budget for the expertise you need. You can use the right technology stack and the right channels for your KPI, but it’s hard to get the right ROI without the right team. You need:
- Technology Stack Integration Specialists: Connect all platforms to work together and convert data into dashboard visualizations that everyone can understand.
- Analysts and Strategists: Translate ongoing campaign data into actionable tactics that ensure you’re targeting the accounts most likely to convert.
- Content writers and designers: Develop display ads, whitepapers, case studies, landing pages, and custom assets for 1:few and 1:1 campaigns.
- Search marketers: Convert complex marketing plans and research into SEO and PPC strategies that enable ads to be presented to buying committees at every stage of the funnel. Remember to keep turnover in mind. Marketing specialists have an annual turnover rate of 19.8%.
Related: Account-based marketing isn’t going away. Here’s why.
While the end result of an ABM program deserves careful consideration, keep revenue generation in mind when deliberating. To realize the promise of ABM, consider all of your options and let the strategy play out once you get started.
the new B2B buying journey takes several months or even a year or more to move a purchasing committee from awareness to decision. The first ROI benchmark for ABM is usually around month six. By then, if you’ve invested wisely and your sales team is leveraging campaign data correctly, you should see a return of three times your investment. Patience is required.
The most sophisticated ABM agencies run full ABM campaigns that include sales enablement as part of their services. These agencies bring their clients up to nine times the annual return on investment for 1:few and 1:1 campaigns from the first campaign, because they already have the teams, the technology and the expertise in of orchestration.