How Account Based Advertising Really Works

2015 seemed like a breakout year for account-based advertising, with a flurry of account-based advertising offerings hitting the market. Interest in account-based advertising is, no surprise, following the adoption of account-based marketing.

According to a 2015 survey from Demand Metric and Demandbase, 45% of B2B marketers are testing or have adopted account-based marketing and more than 75% of those plan to increase their use of ABM in the next year. LUMA Partners even singled out Account Based Marketing as an area they expect to take off within MarTech this year.

On the surface, if your marketing is already structured around specific accounts, using account-based targeting in your advertising programs seems like a natural next step. But how do these solutions actually target ads to specific companies? Or to put it a little bit differently, how do all of these companies most of us have never heard of know where we all work?

Most account-based advertising providers figure this out in one of three ways, and each method has its advantages and limitations.

1. IP Targeting

The earliest account-based advertising providers used lists of IP addresses to serve ads to people from specific companies. From Demandbase to Vendemore to Neustar, IP data started to see widespread interest and adoption three or four years ago. The advertising itself is generally purchased through exchanges and will generally come from a broad range of sites (from thousands to millions depending on the media partner and your specific program).

IP targeting can broadly reach a target company. Think of it like a billboard outside an office: nearly anyone working in that location has the potential to see it. But people who travel, work from home or have their nose in their mobile likely won't.

Reaching everyone in large organizations like IBM, Ford or Citibank, when you only care about a very specific audience, can become expensive, particularly with CPMs from account-based advertising providers that often start close to $20. Half a million impressions a month isn't unreasonable (that is an average of just 5 impressions per person per month), which could cost $10,000 a month for a significant presence in front of the target company.

Since very few marketers are making that kind of investment against an individual account, increasingly IP-based solutions are layering on additional targeting methods, from third-party audience data to contextual targeting, focusing advertising investments not just on the companies, but on the right kind of individuals within those companies.

2. Onboarding Offline Databases

Some newer account-based advertising providers are starting with large B2B databases and matching them through data providers like LiveRamp. By starting with a traditional database, these account-based advertising providers like Terminus effectively start with a list of individuals at the target companies. And since they are targeting individuals, not locations, it doesn't matter if someone is in the office, on the road or at home.

If IP targeting is like a billboard, think of this more like an email list purchase. You only reach individuals that match your select criteria (although if you are used to traditional list rentals, don't expect that level of granularity!). And like a list, you are limited to the data your provider has available. Like the email spam folder, you also worry about ad blocking, as most onboarding solutions rely heavily on banner inventory.

Because the reach of this approach is limited both by the available data and by the dropoff in the match process, some providers in this space have been adding in IP targeting to increase scale. However, as they do they lose some of the targeting benefit that made the database approach interesting in the first place.

This data onboarding process isn't limited to account-based advertising providers. Any marketer with a sizable database can onboard data. With a large enough database, marketers can implement this directly themselves through any DSP. Even low-cost self-serve platforms like AdRoll can onboard an email database for targeting.

Maybe the most interesting play in this space though is Demandbase, traditionally an IP-based targeting approach, purchasing Whotoo, a database that is used for ad targeting. With this acquisition, Demandbase is the first provider I'm aware of to bring their own IP data and on boarded data together.

3. Your Personal Profiles

How do companies like LinkedIn and Facebook know where we work? Because we tell them! Then we turn around and give them a wealth of other information, all of which serves you, the marketer and advertiser, when it comes to targeting ads.

With the recent launch of an account based targeting offering, LinkedIn has made it easier than ever to run account based advertising on their platform. Building account lists on Facebook is still a manual and tedious process, because media costs on Facebook are so much lower than most traditional B2B outlets it can be a very cost-effective component to add to an account based advertising program.

Profile targeting is inherently cross-platform since it is based on the profiles we already use across devices. And if you aren't already putting the mobile experience first in your marketing, you better before going to LinkedIn or Facebook, where the vast majority of the traffic you get will be from mobile devices. (You can exclude mobile in your targeting on Facebook, but not on LinkedIn).

Your Turn

What questions do you have about account-based advertising? Share them in the comments below or connect with me on LinkedIn and I'll do my best to answer!

Photo Credit: Flickr cc

Originally published on B2B Digital Marketing