Today on Sacking Growth, we've got the second part of our latest live event with Matt Chanella and Dale Harrison on how to convince your finance team to invest in brand. In this segment, they cover four different common arguments that CFOs make against brand, including timing, budget, outdated beliefs about buyers, and misguided thoughts on company scope. Hope y'all enjoy. So it's too early.
Y'all often hear this at early stage companies. The problem is that if you're an early stage company, your biggest problem is that no one knows you exist. So it's never too early to let people know you're buying option. And the thing I always point out is that 70 to 90% of a movie's entire marketing budget is spent before anyone can buy a ticket.
And the reason for that is that they don't do that. They're going to open to empty theaters for the first three months. And your B2B product is no different than that movie. If no one knows you exist, your sales team is going to have a really rough time for the first 12 to 18 months because no one's going to know who's calling.
And why they should listen to you. And so when I work with early stage pre-launch startups, which is a lot of fun I've done in the last few years, my recommendation is you need to do intensive brand marketing starting six to 12 months before the product launch. And then once it launches, then flip over to doing relatively intensive performance marketing so that you can feed actively to the sales team. And then a year in after you've launched, then come back to a balanced approach to where you're splitting your budget between brand and performance.
And that's going to give you the fastest best path to revenue traction. That's smart. Yeah, the other is not the right priority. Brand marketing isn't something that just big brands do.
And you often hear this, that there's not some magic size where you need to be at least this big to, you know, so it's not a carnival ride where you have to be this tall in order to get on the ride. You know, every business needs to do this because at the end of the day, you know, you can't just wait until everybody knows who you are, because the only way they're going to know who you are is you tell them. Another thing is brand is too expensive. And this is another financial argument that's worth considering.
It actually cost a lot more to reach an end market buyer, highly targeted ads cost up to 10 times more than broad reach ads. So that that cost per person that you're reaching with that performance marketing is dramatically more expensive on a per person basis than if you're doing brand marketing. And the other thing in here is that brand isn't about paying to reach everyone. It's about paying to reach people in your ICP who are likely to be future buyers.
So brand marketing as a whole is significantly cheaper per eyeballs than the performance marketing. The other one is this wastage. I don't want to pay to show ads to people who aren't going to buy. And this is really focusing on the wrong optimization.
You're being efficient instead of being effective. What matters is the unit cost to reach a future buyer. What does not matter is the overall CPM or ad wastage rate. What you want to know is what does it cost to reach the next thousand eyeballs that are likely buyers.
And that may be 10% of the people you're marketing to. But if the channel is cheap enough, it can still be a very cost effective way to reach likely buyers, even if 90% of the people you're showing ads to are never going to buy. So you got to look at the effective CPM for people who are likely buyers. That's the argument for channels like Reddit or Meta over Linkedin and some aspects.
I've done a lot of work in Reddit. I think Reddit is absolutely the most amazing brand marketing channel in existence, at least in digital. TV is the best overall. Very engaged audience for sure.
But not only that is I can get really quite good ICP targeting and Reddit primarily by focusing on specific sub-readits. And I am consistently running in the $3 $4 CPM range. I cannot now click three rates is 0.1% on a good day because nobody goes to Reddit to click on your ad. So the whole point of Reddit is they go there and you can catch them with some brand exposure as they're doing other things.
But you can get relatively good targeting ICP targeting for astonishingly cheap price in terms of CPM exposure cost. I'd say the same thing too, even with really niche sub-readits like I target surgeons on Reddit for instance. The CPMs are extremely competitive compared to what we do on LinkedIn for basically the same audience. Well, and the other thing is even Facebook, because I've also done meta ads, Facebook is much more of a brand marketing platform than it is before.
Oh, 100% it is. Yeah, you're not going to get good click-through rates because nobody goes to Facebook to click on your stuff and leave. But again, I mean, I've often have seen CPM costs for pretty good targeted ads on Facebook that are down in the $5 to $7 range. This is especially true when they force you in the advantage plus anyway.
And so they're going to have a lot of domain over your placement. Like the amount of feed ads you actually get is a lot less than you would think. Oh, yeah, that's for sure. But yeah, so again, if you're doing brand, the key metric is CPM assuming that you can get good targeted.
And what I call effective CPM, which is essentially, you know, if 50% of my audience is likely in my ICP, but it costs me $5 a CPM, then the effective cost to reach that 50% is effectively $10 a CPM. And I can now compare that with, you know, for instance, really ultra high performing Google paid ads are typically, for me anyway, up in the $40 to $50 CPM range. If I look at something more hyper focused like Shopify App Store ads, those run up in the $400 to $500 CPM range. We have a hundred full spread in CPM range, you know, on these various channels.
You have to think about, you know, is this a brand channel forming or is this a performance channel? So I had a quick question as we just got into talking ad platforms because we talked about how good Reddit and meta we think are as brand platforms. And so the follow up question from Sarah is LinkedIn then best for performance marketing. I assume among the social channels, I think search obviously is probably one of the best performance marketing channels.
There is what is your opinion on that? Yeah, I've searched done well. I think it's just a killer performance channel. LinkedIn, I mean, Mike's brand is for LinkedIn is that it's kind of not terribly good at any one thing.
It's extremely expensive. There's a BPM basis as a brand platform. It's still, you still get very low performance, you know, in terms of click through rates on LinkedIn. Because again, people are going, you know, unlike search, people go to search to click away from search on LinkedIn.
People are going there for reasons other than clicking on your ad. And so, you know, I still think of LinkedIn as being at least as much a brand platform because you're going to have difficulty getting reasonable good click through rates. But you got a good opportunity to expose people to the brand. But then what do you pay on a CPM basis for those eyeballs?
And that's where, you know, compared, and again, it's always compared to what? So what are you paying for those eyeballs on LinkedIn compared to paying for those eyeballs on Reddit? Or on Facebook? Yeah.
And now again, you might say, well, those eyeballs on LinkedIn, you know, we're going to, you know, they're going to, you know, they're, you know, they're going to convert at a much higher rate. Well, but if it costs me 10 times as much on a CPM basis to get the reason those eyeballs on LinkedIn versus say Reddit, are those eyeballs going to convert at 10 times a greater rate? Because if they only convert at two times greater rate, you know, I'm still overpaying by a factor of five. And so, you know, so if you're, if you're paying a premium for those eyeballs, you have to be getting something else to compensate for the money you're paying.
And that's my problem with LinkedIn is that I struggled to find a rationale for what it is I'm paying for above and beyond the CPM rate. Since I'm not getting great click-throughs anyway. You know, why am I paying for about that audience that makes it 10 times better than reaching the equivalent audience over on Reddit and challenge? I'll chime in with my thoughts on this too, Sarah.
So I personally, LinkedIn has a lot of ad types for performance marketing. They have the conversation ads and lead gen ads, but I find social plots, search, by the way, I agree with you, Dale, is the best performance marketing channel, Google, and then even Bing. In terms of performance marketing, I would honestly still go with a channel like Meta because I just think the cost, the cost for the action is just going to be so much more fun. It's just going to be so much more efficient assuming that you're able to target the same people, which with the right there party tools you want to do.
I'm running a performance marketing campaign right now for a medical device client and we're running performance marketing ads for an LMS. And Facebook is easily 50 to 60% cheaper for ICP fits on a cost per basis right now in the four weeks we've had that running thus far. So I mean, I think it's always a case by case basis, I would say, Sarah, but there's certainly drive without and see what you get out of it. But it's pretty easy to compare it if you're going to do performance marketing, which should be UTM, then directly attributable to figure out what's most common.
What's most cost effective and hence best for you? Well, and the other thing to keep in mind too is the login rates on the charts. One of the nice things about Reddit is a lot of people are not on Reddit that you want to reach, but those that are on Reddit tend to be on the channels. But if you look at something like LinkedIn, the average LinkedIn account logs in between once a week and once a month.
Not with saying everybody on this webinar. Right. But those exact same people are typically logging into things like Insta or Facebook. Seven to ten times as often as the only 10.
And so just the ability to catch someone with something in their feed on Facebook is going to be much better. Somebody goes there more often. You have more feed for them. They're looking at kind of more square footage of feed over a month on Facebook than they are over on LinkedIn.
And so a lot of just the ability to reach people, you're going to do better on platforms that they're on more often. And these are the trade. I mean, this is really about media planning, which I think there needs to be a lot more thought given in B2B. But how often your own Facebook versus LinkedIn, the same people, it's important.
What fraction of your market is never on Reddit versus always on Reddit. That's important. And so it's important to get some estimate of these in order to do any kind of efficient media planning in order to be able to do that with the right sort of media mix. Where you're going to catch as many eyeballs as often as possible or as cheaply as possible.
Sure. Yeah, that goes into audience research tools and surveying customers or surveying your marketing and things like that. But I mean, largely in SaaS, I say this all the time that we kind of live in an advertising duopoly on LinkedIn or it's like you do LinkedIn or you do Google, but there's a lot of other channels. So a ton of Bowen, Sarah's question.
I will say for brand, I do like LinkedIn for CTV. It is a much more competitive CPM than single image statics or even videos on LinkedIn and you do get the control over the, you do get control over the job title targeting. So that is an attractive thing, especially if you have like a smaller audience. So I'll add that in as kind of just a time to not on a question.
Yeah. And the last couple of things here is one of the arguments is we need results now. And the deal is that there's very good evidence that brand ads are highly effective and attracted in market buyers, but only about 5% of your buyers are currently in market. But the brand ads keep working on that 95% who come in market over the next one to two quarters.
Today's brand ad won't work forever because eventually it falls out of people's heads, but it will keep working as they come in market to deal with your performance ads. And again, this is a core financial argument that's important to understand your performance ads. They're going to impact that 5% who are currently in market, but today's performance ad will have zero impact after one cell cycle, because within one cell cycle, whether they click on the ad or not, whether they entered your sales process or not, within sort of one cell cycle for the category, they've made a decision and they're now not in market for likely years to come. And so any impact that that performance ad has is very, very bounded in time where the brand ad because you're really engineering the ad to create these durable memory associations will keep working for some period of time in the future.
So you get much, much more mileage for the dollar and much cheaper price per eyeball as well. So you win both on efficiency and effectiveness with the brand ads over the performance ads. But again, you still have to do the performance stuff. You still have to get people in the sales pipeline.
So you got to find that balance, but it is quite expensive to get people into the pipeline compared to influencing future buyers to consider you when they come in the pipeline in the future. Sure. That's why retargeting audiences are just significantly higher CPMs across the board. Any channel of Don has a question on intent data.
Actually, I want to ask this is a performance marketing question. I'm sorry, we're getting a little bit off the deck here. Is that okay? Yeah.
All right. So Don asks understanding that not all intent data is created equal. How can different types first party co-op, bitstream, for example, be the intent data be used to improve one's identification of affected by CP audiences and identifying that in market faction. I don't know if you have opinions on this.
I certainly have a couple, but how would you respond to that? You have to consider if you have a contact, you have two considerations that you have to make. Is this contact likely in my ICP? Is this contact in market intent data is not going to tell you if they're in your ICP.
Just as it. The intent data may or may not tell you if they're in market. The question then becomes, so you need to have other tests to determine, look at typically in B2B, we're selling at the account level, not the individual level. You need to be able to look at the account that the contact is associated with and have some sort of objective test to determine what's the likelihood that they're not just in our ICP, but in the portion of the ICP likely to buy from a company like us.
Right. Then the question is, are they in market? The big issue with intent data is that it does not contain enough information to reliably tell you if someone's in market. If you strip away the marketing BS starting with the word intent, there's nothing in this data that's in any way remotely associated with intent.
What they're selling you is they're selling you either your own first party or third party website visits, period. You're buying a list of website visits. What they're doing is they're inferring if someone visits a particular category page on G2, then maybe that person is in market to buy in that category, or maybe they're just kicking the tires, or maybe they just accidentally clicked on the wrong link. All of those things can fully explain why that page visit got recorded.
What they're selling you is a bucket of page visits to mostly the third party sites. But because they call it intent data, they implant in your head the assumption that there's something a lot more there than there really is. The thing that I've seen, because I've run very sophisticated machine learning based models trying to extract intent from site visit data and from site interaction data. What I've seen from that work that I've done is that there is relatively low information content in that data that allows you to infer intent.
The net effect is a lot of people who are visiting have no intent and a lot of people who are engaging in activities that might trigger you to think that there's intent, have absolutely no intent whatsoever. And there are a lot of people that have a lot of intent that never engage in those activities. And so what you see is I'm tracking people coming to our site, I'm de-anonymizing them and I'm measuring in detail every mouse click, every pause on a page. I've done very sophisticated models around this.
And what you see is there's a lot of people who do all these things that have absolutely no intent to buy. They're just tire kickers. And then there are people who will just pop up in the sales process that never did any of those things. And so whether they have intent or do not have intent is very, very poorly correlated with the extremely expensive data you're buying from some of these companies.
And so if you're buying this data and you're getting a sense that there's not good correlation here, you're not off. It is what you're seeing. And the other thing is I have run, I want name vendors, but I have looked at data, I've analyzed data from just recently from a very, very large $2 billion a year SaaS company that was heavily involved in using purchase intent data. And it was a little better than randomness.
If I followed transactions to close, or actually not even close, what I did was I followed the transaction to to sell a qualified lead to see what fraction of these people actually were clearly in market because they were fully engaged in the sales process, whether they bought or not. Much of that in those intent signals were a little better than just randomness. Do you have a feeling on like behavior based or signal based data as well, which is kind of like the new replacement for intent data? But it's essentially the same thing.
Yeah, I agree, but it's like, but I mean, it's obviously how people are replacing the nomenclature right now, but it is still just a, it's a series of guesses and some of them are really bad. Like you're amalgamating a bunch of activity and some of these signals that get created are terrible. Like, like they like you're linked in post. So that's a signal or something like that.
I see agencies actually promote that kind of stuff, but to your point, I look at that as largely guessing. Dail's commenting here about like context and saying like a request for pricing as an example would be a pretty good indication, but that is first party data. And you know, that, you know, that that's a better, that's more intent than the larger, some of these other things are. So I would want to like distinguish between the two.
I mean, you know, there are three gels in this call. That's correct. It's a intent is a intent is a hand raiser, you know, who says I want to talk to a sales person. That's intent.
Everything else is a fuzzy guess. And that's what we're talking about. That's what we're talking about. We're talking as a fuzzy guess like when you're creating retargeting off of websites, there's a video of use and ad engagement.
It's a guess. I mean, it's a. And I'll give you a little bit more detail about platforms that I've developed in the past. We were pulling in very large number, I mean, for B2B product, very large numbers of traffic.
And I was generating tens of millions of records of like behavioral data. So we've pulled them onto the platform typically through a campaign onto a landing page. We had specific things available for them on the landing page. And we were tracking how long they spent on the page.
We could see exactly what was in the view frame as they scroll the page. We were tracking their mouse movements because because there's a fairly high correlation between where the mouse is on the page and what they're reading. We could track how much time they spent reading each section, what they clicked, how often came back an enormous amount of behavioral sort of signal data on a first party basis. And the best models were not better than about 40% at guessing.
Well, not the actual intent. And the problem is there just is not enough information content in those signals to reliably predict whether or not what you're looking at represents intent. And this is one of the reasons that BDRs exist is that literally a five minute, a 10 minute phone call with an actual human, you will learn a thousand fold more information than all of that signal data that you could have collected and all that intent data. And the problem is this notion of how much information is actually in the data.
And and signaling intent data is inherently low information content data. Even if you have a lot of it, you still may not have very much actual information where a sales conversation is a very high information rich data sets. And this is one of the reasons that all of these intent data, all of these scoring systems, all this stuff does not replace a five minute call with a BDR. Let's get to the next slide.
We've run way over. I'm happy that we have because we had a quick click back and forth out of it. But I do want to I don't want to abuse everyone's time here. I do like this slide.
I think this is a good one to end on the other the other few slides we could even cover a little bit in August session or you and I can even just jump on it just to just quick 15 minutes. Yeah, this is a common objection here in B2B. Our buyers are rational. Yeah, and my response is yes.
And that's why you have to do brand marketing. The rational choice is to consider brands that you already know and trust not some random brand you discovered at the last minute during the buying process. And so there's nothing more rational than doing brand marketing and letting people know you exist before they're ready to buy because you're leaning into their to their rationality around a brand selection when they do have to make that decision. And you see this in, you know, again, Gartner data, you know, BCG data data, you know, recent studies, really quite good studies from six cents where people that already know the brand at some level, even if it's just they recognize it as something that they saw before.
It doesn't mean that they have to know you in a relationship. Just they recognize it as something that they saw before are going to be inherently significantly more likely to actually choose you at the end of the buying process than something that just popped up randomly after they were already in the buying cycle. And, you know, so, you know, this is very important to lean into that sort of rationality with the brand marketing. Yeah, I think closer to that is brand doesn't influence me to be decisions.
And the key thing here is that brand marketing is not designed to influence decisions because you're reaching, for the most part, you're reaching that 95% or not a market. There are no decisions to be made. What you're trying to do is you're trying to get them to remember you so that you've got a chance to influence those decisions in the future when they come in market. You know, so it's about getting into that day one consideration set.
Once they're in that day one consideration set, you can now deploy your performance marketing, your sales efforts, all these other tools to be able to convince them that you're the right choice. But if you're never in that day one consideration set, you basically have cut yourself off from most of the opportunities to influence that buying decision when the time comes. I don't die tribe on this, but it kind of kind of spilled into the state of the intent data and the retargeting discussion. So let's begin.
We can keep moving. We can keep moving out. So, so almost at the end here. So we're too niche.
I have worked in some extremely niche areas where brand marketing was the linchpin for our being successful. I mean, I spent quite a number of years working in a product category called oligonucleotides. This is synthetic DNA molecules that are custom manufactured for researchers, mostly at universities. Doesn't get more niche than selling DNA molecules to scientists.
And, you know, our number one problem was that most people didn't know that we existed. And we fixed that problem by doing really clever, intensive brand marketing. So you're never too small to, you know, that you don't need buyers to know that you exist. So, I'll let me add to that because I actually think being niche is an advantage in some ways for brands as well because you really get a chance to reach almost everyone in your market when you're when you are niche because you if you have targeting, you have that ability.
So, I have a use case like that too. I have a medical device client and they sell something for multi level cervical fusion and they are only selling to orthopedic surgeons and spine surgeons. And so we've been able to reach our whole market. It was the same.
It was the same company that we did the performance marketing, the LMS training on on that and on LinkedIn. And not only have we've used ads and we've used email to both bring new surgeons into do training, but we've also done it to keep people aware of the pathology itself and it's helped with and it's helped increase the number of cases that they've recorded every year as a result. Because people know they won't always recommend it if they don't believe that it is the best solution. So I think being niche in some ways is advantageous because I think you get to you get to really you get to really run a lot of different programs with a lot of different purpose if you know everyone that you want to get in front of.
Yep, absolutely agree. Yeah, the next one is everyone already knows this. And again, you often see this in sort of small narrow categories and B2B. Yeah, and my response is always if everyone already knows this, why your sales figure is so small, you know, clearly someone out there doesn't know you or you would be selling to more of them.
And again, memories are very short. So, you know, we need to continuously remind people that we exist. They're not going to just because they used to know us doesn't mean they still know us. And the last one here, just two more slides, what I call avoidance.
We're still trying to figure out who we are. And the key thing here is brand is not about who you are. For the most part, people don't care who you are. They just care whether or not you can fix their problem.
And, you know, it's a brand is about people remembering you as a buying option when they come in market to purchase. You know, all you need is the ability of your brand marketing is the ability to create a recallable memory association. So, you know, again, I think the objection here confuses the end objective of why we do brand marketing. You know, it's all about the memories.
It's not about who you are. It's not about what you know, what your purpose is. You know, it is simply we sell this thing that solves this problem. Please remember our name when you're ready to buy.
We're assuming the category entry points here largely don't change as you as you figure out who you are along the way. I would assume when we're making this distinction. Well, and the other thing is that most products have a fairly clear type of problem that it solves, which is a defined user. You know, if you're trying to expand into an adjacent category or something like that, that's a whole different, more sophisticated and expensive thing to do.
But your core thing is there's some, you build this thing and clearly solve some kind of a problem. There's some block of people out there who have this problem occasionally to come in market for a solution. And when they do, you want them to remember your name. It really is as simple as that.
And everything else is secondary. And the term I have for that is what I call reach primacy. This idea is that the most important thing is how broad your reach is among future buyers. You know, the more of those people who remember you at the time they come in market to purchase, you know, so it's what I call brand recall that purchase.
The higher fraction of people who can recall your brand at the moment of purchase, the bigger your market share is and the more sales you're going to make. And that's the purpose of brand marketing. The other thing, the last thing is we don't want to over promise. So product promises are what you use performance marketing to deliver.
If you have product promises in your brand marketing, you probably are already off the rails. And part of the problem is that you need to be able to give them some ideally some point of differentiation, although that's not necessary. What's more important is they just need to remember your name and the association to the problem you solve. If you can also slip in something that makes you different or unique, that's helpful.
But anything beyond that, any sort of detailed promises about the product is really what you deliver when they're already in market. And they're down to brand A, brand B or brand C, which one do I choose? That's when things like product promises are going to make or break the day. But until they're at that point, to that buyer is in market and at that point, those product promises are just not going to be remembered and be acted on.
What they're going to do is they're going to act on the fact that they remembered you when they came in market and say, Oh, yeah. So and so is somebody that can solve this problem. Let's throw them into the consideration list. Yeah, this comes back to like messaging outcomes and stuff, stuff like that features, it's outcomes, you know, much more so.
So in many ways, you know, the less you say with your brand marketing, typically the better you are, because it just doesn't enough brain space to hold, you know, for people to, for you to hold their attention and for them to remember all these details. You know, anything about the details of your product, anything about how you're better than someone else in the same category, just not going to be taken in. You know, once they're in market and they're trying to make a choice, A, B or C, those things really become important. And you've got that opportunity in the performance marketing and in the sales process to be able to address those issues, brand is the wrong place to do that.
And it gets in the way of brands, brand marketing, you know, one and only job, which is simply to create durable memory associations that are recallable.