Why your B2B PPC metrics may be lying to you

B2B PPC advertisers have more options than ever for measuring success. In the past, you had to rely on form-fill data alone. Now, you can feed a wealth of offline conversion data into Google Ads and Microsoft Ads.

It’s tempting to measure every possible metric, but optimizing toward all of them isn’t a good idea. If you’re optimizing toward everything, you’ll probably end up succeeding at nothing.

So how do you know whether you’ve actually driven incremental value, and what are the right success metrics for B2B PPC campaigns? The metrics that matter might not be the ones you’re focused on.

The advertising metrics that matter

I’ve seen advertisers set up offline conversions and get excited because their total conversions increased. Then frustration sets in because they don’t see corresponding increases in their bottom line.

Usually, those conversion increases happen because the advertiser added more conversion actions and set them all to primary. Before making changes, they were only tracking form fills. Afterward, they were tracking form fills, leads, marketing qualified leads (MQLs), sales qualified leads (SQLs), and opportunities.

Instead of one conversion action, they now have four. But the same person could complete all four, meaning leads are being quadruple-counted. A similar issue can happen with platform-reported return on ad spend (ROAS). If you’ve attached conversion values to each action — which you absolutely should do — you’ll also see ROAS increase. Both are false signals created by faulty math.

Focusing only on average cost per action (CPA) can also be misleading. Average CPA can mask your marginal CPA — the cost of acquiring one additional conversion as marketing spend increases. You might be overspending on incremental conversions as you scale your account.

Set up conversion values correctly

Setting up conversion values is a must for offline conversions. A lot of B2B advertisers get hung up on this step. They say, “We don’t know the value of the conversion at the time it happens. We won’t know that until it works its way through the system.”

While using actual conversion values is ideal, don’t worry if you can’t. Just assign relative values to each conversion action. Here’s a simple example:

In this case, the advertiser is measuring four conversion actions: video views, ungated asset downloads, form fills, and MQLs. MQLs come from offline conversions. The rest are measured through Google Tag conversions.

Each conversion is worth 10x the previous action. Ungated asset downloads are worth 10x a video view, and so on. MQLs are worth 1,000x a video view. The advertiser would rather get one MQL than 999 video views.

If you set arbitrary values, make sure to validate them against real data to ensure they’re directing bidding algorithms accurately. Setting values that are too high for lower-funnel actions can cause the algorithm to favor those easier-to-generate actions while deprioritizing lower-funnel actions.

This happened to us recently with a client who was getting a lot of leads, but very few MQLs and SQLs. We reduced the value of leads by a factor of 10, which made MQLs and SQLs look more valuable to the algorithm and increased MQLs and SQLs relative to leads.

Within two weeks, MQL and SQL volume increased significantly, while leads stayed flat. That might not sound like a good thing, but it was. The client was getting higher-quality leads for the same cost.

By using the right conversion values, even relative ones, you can measure incremental conversion value more effectively.

Dig deeper: Why incrementality is the only metric that proves marketing’s real impact

Get more specific with campaign-specific goals

If you want Smart Bidding to focus on down-funnel actions, you can use campaign-specific goals. You can assign conversion actions at the campaign level, so Smart Bidding only optimizes toward those actions.

You can find the feature in campaign settings in both Google Ads and Microsoft Ads.

Here’s what that looks like in Google:

And here’s what it looks like for Microsoft:

Let’s say you have a campaign that’s driving a lot of leads, but few MQLs and SQLs. You could use campaign-specific goals to optimize only for MQLs and SQLs and ignore leads, even though leads are a primary conversion in the account.

Note: If lower-funnel actions have low volume, this technique may not work. Automation still needs a clear enough signal to optimize toward. So if you only have one or two MQLs in a month, the automation might struggle.

Dig deeper: Why Google Ads, GA4 and CRM numbers never match

The success metrics for measuring incremental conversions

Looking at simple CPA and ROAS metrics isn’t enough to measure success. You also need to look at each conversion action and measure incremental conversions. A basic way to measure incremental conversions is to establish your baseline first and then measure the CPA and ROAS of conversions at a higher spend level.

For example, let’s say you’re currently spending $5,000 per week and getting an average of 50 conversions, so your CPA is $100.

Now let’s say you increase your weekly spend to $7,500 and end up getting 70 conversions, for an average CPA of $107 — not much higher than the previous CPA of $100.

Your marginal spend is $2,500, marginal conversions are 20, and marginal CPA is $125 — 25% higher than the original CPA.

The difference in CPA may or may not be acceptable for your goals. It might make sense to invest more to increase sales. But you need to understand where your upper limit is. At some point, you may exceed the amount you’re willing to invest for an additional lead while still making fiscal sense.

If you want to get more sophisticated, you can use a marketing mix modeling tool (MMM) to run an incrementality test.

There are several MMM tools you could use to do this. Some are expensive, and some are low-cost or even free. 

For example, Google’s Meridian is an open-source tool and it’s free, but the trade-off is that it requires technical know-how to set up and use. 

MMMs also require a significant amount of historical data — two or more years’ worth — but once the data is ingested, they’re fantastic for measuring incrementality. 

Dig deeper: How to avoid marketing mix modeling mistakes that derail results

The true test of whether your success metrics are working

MQLs, SQLs, and closed deals are important. But the true measure of incremental value is revenue or pipeline. That means you need to make sure you’re actually measuring for it.

Not all sales are created equal. You might see one deal for $5,000 and another for $2 million. Both register as closed sales in the CRM, but the two are nothing alike. Which would you rather have?

It’s easy to undervalue conversion actions if you’re using proxy values like the ones described above. Yet pipeline and revenue are often determined outside the 90-day conversion window required for offline conversions.

It’s crucial to look at the data in your CRM and map it back to your paid search campaigns. Are there campaigns or content assets driving relatively few leads and MQLs, but a lot of pipeline? If so, don’t devalue them. Make sure you keep them running and give them enough budget to succeed.

Also, don’t forget about incremental revenue.

If you’re scaling your spend, keep an eye on incremental revenue to find the point of diminishing returns. Doing this can prevent overspending on campaigns or channels once they’re no longer cost-effective.