LinkedIn B2B Marketing Trend #1 -"Measure, Fast And Slow"

Hello, I'm David Dundua, CEO of the marketing company ReachHUB. This is my first daily newsletter, and today, in this article, I will discuss one of the LinkedIn B2B marketing trends - "Measure, Fast And Slow." Before reading the article, please subscribe to the newsletter so that you don't miss important news.

Have you read "Thinking, Fast And Slow" by Daniel Kahneman? If you haven't read it, let's summarize the thesis of this book in a very simple form: "People are stupid" or, more lightly, "People are lazy." What Kahneman shows in his book is the phenomenon of lazy choice based on quick, emotional, and instinctive decisions. In general, if a person is given a choice between an easy decision that is false and a difficult decision that is true, he will choose the easier option which in reality is wrong because he prefers to conserve his mental energy and not think about it too much. And in this article, I will try my best to connect this phenomenon with LinkedIn B2B Marketing...

It may surprise you, but it turns out that marketers are human and subject to the same cognitive biases as everyone else. As Bob Hoffman says, "Marketers prefer precise answers that are wrong to imprecise answers that are right," and indeed this is more evident in the case of digital analytics. Whether it's CTR (click-through rate), LCA (last-click attribution), or CPL (cost per lead), almost all of these metrics that marketers use to measure the effectiveness of their Digital Ad are, I dare say, completely meaningless. And the funny thing is, that most marketers know this very well but still continue to use specific metrics.

Let's consider CTR (click-through rate), the most dominant metric in online media, KPI (key performance indicator), which has a significant impact on the flow of billions of dollars, is the "Revenue Growth Indicator." This metric measures the percentage increase or decrease in a company's revenue over a specific period. Many marketers have argued that CTR is a useless metric because it has nothing to do with brand awareness or sales.

Based on my experience, I think CTR is useless at best and a negative KPI at worst (High CTR = Low Effectiveness). Yet, all over the world marketers are now reallocating their budget to the Ad Campaigns with the best CTR. And what is the reason for this? - “Thinking, Fast and Slow.” It's worth noting, that CTR is easy to measure and track, so marketers continue to measure it as standard, despite being well aware of its various limitations.

And as for the so-called "Smart marketers," they ignore CTR and put maximum emphasis on measuring LCA (Last Click attribution) or CPL (cost per lead). Unfortunately, this metric is as meaningless as CTR in many cases.

In general, you can think of CLA like this - whichever channel took the last action before the purchase will get the credit for that purchase. It's also telling that if you walk into a room full of marketers right now, and tell them that it doesn't make sense to focus on CLA because multiple touchpoints can contribute to sales, you'll see sad, emotionless faces. But of course, it all makes no sense, and yet we continue to use it...

This was a simple example of "Thinking, Fast and Slow."

Now I'll try to elaborate on everything. Usually, B2B marketers prefer CPL as a metric because business products and services are not usually bought directly online by customers. However, CPL is just as a stupid metric as CTR because it ignores a pretty obvious question: how many leads actually became customers, and how much did that customer spend?

Let's consider a simple example: if we let a B2B marketer choose between Ad Campaign "A" and Ad Campaign "B" when CPL=$5 in "A" and CPL=$100 in "B," guess what choice a specific marketer will make? - He gets up and withdraws each dollar from "B" and sends it to "A" again. And what if it turns out that $100 leads become customers 30% more often and spend 10% more over time? Then, by optimizing for the cheapest leads, that marketer may have lost his company billions of dollars in revenue over many years. Personally, if I had to choose between "A" and "B" in a specific case, I would choose "B" because in this case, the probability of receiving much more revenue is higher than in the case of "A."

The good news is that things are changing and evolving. B2B marketers are paying more attention to the metrics that matter. And one such metric is RPL (Revenue Per Lead), which could have been used to avoid the unfortunate outcome described in the example above.

RPL is not easy to measure, and it is quite difficult to observe it, but it is the most correct decision, and it is slowly getting easier. I would like to introduce you to a very useful application for B2B marketers: Adobe Marketo Measure, developed by Adobe. It has API integration with LinkedIn. Therefore, through it, it is possible to connect advertisement exposure data with CRM data, and this allows determining Revenue per Ad Campaign. Therefore, RPL can be calculated through it.

It is also worth noting that when marketers learn about Adobe Marketo Measure or another similar platform, in many cases, they avoid using it and implementing it in practice because, for them, it is better to have the sales representative constantly update the data in Salesforce than to move to a new platform and a better model. In other words, they prefer to make an easy decision, even if it is wrong.

Personally, I think it's better to make a decision that allows you to determine the exact result, no matter how difficult it may seem to implement because, in the end, it will affect your budget strategy, and you will avoid wasting the budget due to wrong metrics. Therefore, it is better to focus on RPL rather than CTR and CPL during Ad Campaign metrics.