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Here’s What Most Companies Get Wrong Spending Their Ads Budget

Most companies are spending over 90% of their advertising budget just capturing demand.

What is capturing demand?

It’s investing money in places that your Dream Customers are ready to buy from right now. Think: Google, Capterra, G2, direct response ads on social, etc.

The problem with that is in your market, only 3-5% of people are ready to by RIGHT NOW. And if you and your competitors are all competing for that same 3-5% – it’s like jumping into a swimming pool full of sharks. It’s a blood bath out there.

You might have some success initially, but your scale is limited by:

  • How many other businesses are competing for that 3-5%
  • Whether the category is expanding
  • Whether you can pay more for a customer than your competitor can

For most brands, it becomes unsustainable quite quickly. Cost-per-acquisition rises, lead quality reduces, and it becomes a price and feature war with your competitors.

So if that’s the case, why are most companies spending over 90% of their budget on capturing demand?

Myles Madden (ex Refine Labs) puts it down to attribution.

Marketers mostly invest in demand capture (a.k.a ‘digital sales’) because they are the only activities that get tracked by attribution. Most marketers use a software-based attribution model – and whether it’s first touch, last-touch or multi-touch it doesn’t matter because you’re constrained by the limitations of that software.

Myles Madden,

The problem is that attribution software is really only showing what captured demand. It’s not able to show what created the demand.

For example, our Hubspot at The B2B Playbook always shows that applications for our program The B2B Incubator come from ‘Organic’ or ‘Direct’ sources. That would then lead most marketers to conclude that it’s SEO that is driving these applications, so we should invest more there!

But when we ask applicants how they first heard about us (i.e. what created the demand), they inevitably answer: LinkedIn or The B2B Playbook Podcast.

Because software attribution can’t really measure this, marketers aren’t deploying money to those activities.

Grab the full episode:

I'm George, and I'm an embarrassingly passionate B2B marketer.

But it wasn't always that way. When I first got into B2B marketing, I actually found it so confusing. There was conflicting advice - and I kept pursuing the promise of "the one thing" that would work - with varying success.

With my own agency and working in-house, I tested different strategies and tactics to see:
(a) which ones could be done by a small marketing team
(b) which ones actually resulted in REVENUE for the business

We then turned the stuff that works into one cohesive strategy that I follow when I consult with B2B clients.

It's called our 5 BEs Framework.

And now we're dedicated to sharing it, right here, on The B2B Playbook.

We're giving away our 5 BEs Framework step-by-step, and creating the resource I wish I had when I first fell in love with B2B marketing.

When I say step-by-step - I mean it! Start the podcast at Episode 1, and work your way through.

If that sounds like too much, we give you the strategy, templates & tools in our 12 week program - The B2B Incubator.

Check it out here:

I'm also extremely active and share much of our framework on LinkedIn - so please feel free to connect with me there and say hi!

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