Why ABM (Usually) Doesn't Work
Why ABM (Usually) Doesn't Work
Most account-based marketing programs never generate enough revenue to justify the investment. Usually the adoption of ABM is driven when an executive consumes marketing collateral or sales presentations from an account-based marketing vendor like Terminus or 6sense. As a result, the adoption requires -- in addition to the substantial software licensing fee -- up to six months of organizational planning.
The company, of course, zeroes in on their ideal customer and their list of target accounts and upload them into the software. However, once they begin the ABM campaigns, they don't get the expected results.
Why is it so hard to track the ROI of ABM?
A common challenge companies run into in ABM implementation is difficulty tracking ROI.
However, we need to entertain the possibility that they're having a hard time tracking ROI because the campaign is not generating much revenue. .
Most "ABM" involves using running display ads to a target list, under the assumption that this will improve response rates on cold outreach campaigns.
This business model works well for the ABM vendors because it incentivizes marketers to spend money through their platforms -- and they take a cut of that ad spend.
However, it doesn't work so well for the companies investing in ABM.
ABM Strategy vs. ABM Execution
The most important part of ABM is list selection. However, this is not a super difficult endeavor. Most companies known which accounts would be ideal customers. Perhaps some sales leaders are a bit too aggressive in choosing blue-chip F100 companies that are unlikely to ever become customers or clients in the near future. But any moderately competent sales or marketing executive can choose a list.
Osric Digital would love to sign Salesforce and the Clinton Foundation as clients, and I can put them on an ABM list if I want. But the reality is, as a small agency specialized in working with SaaS startups and complex service providers, Osric is not going to sign those accounts this year. It doesn't matter how much ABM we do.
Aside from this sort of excessive optimism about ideal customers, this is really an execution problem.
What are the main problems companies encounter in ABM execution?
Lack of customer understanding
The marketers running the campaigns don't understand their customers. Unerstanding customers involves digging into an industry and talking to clients over an extended period of time -- at least a quarter, but it usually requires several years of experience in an industry. Most marketers handling the execution of these campaigns have only been in marketing for a couple years and are often new to their employer's industry. As a result, the campaigns do no resonate deeply with the problems their prospects are trying to solve. The ABM vendor's account manager is unlikely to deeply understand your prospects either.
Thin or low-quality content
Content is the way you build trust with prospects and show that your company understands their problem. But if the content is generic and doesn't reflect the problems of prospects, it is not going to accomplish much. The generic display ads deployed in most account-based marketing campaigns don't demonstrate an understanding of the prospect's problems at all. They just repeat the same generic messaging over and over again. Maybe the ABM software will start showing that an account has a lot of "intent" based on ad frequency, but being served a display ad four times doesn't mean that prospect is ready to speak to your sales team.
The content produced in most ABM campaigns is low quality and an afterthought. Most ABM campaigns are intended to show quick results by capturing demand or at least generating website traffic through clickbait headlines, rather than engaging with prospects most pressing issues.
Short-term "push" messaging that doesn't build trust
Most companies that come to ABM think in terms of 'pilots' that last for three months. If the campaign generates SQLs in sufficient volume, they'll keep spending money. Otherwise, they shut it off and move on to the next thing.
However, this is too short term.
To take Osric as an example, even if we decided to go after the Clinton Foundation over the next three months -- or even a year -- it is not going to work in that timeframe, because we are not large enough to serve a large organization like that in the way they expect -- they're not a good fit.
But even if they were a good fit, we would need to provide them value aloing the way to engage with them over time -- perhaps over years -- for them to get interested in engaging with us in commercial conversations. We would need to provide value over time that would help build trust without asking for much in return., by becoming a resource in a non-obtrusive way, so that we become the authority they think of in our space when they decide to bring on a new marketing partner.
This is not something that can be built in three months, and it certainly can't be built by saturating their managers with display ads and cold emails.
Poor choice of channels
Most ABM vendors, in addition to the SaaS fee, make a significant portion of their revenue by taking a cut of the ad spend put through their platform. They white-label an ad network and mark up the CPMs in addition to charging a percentage fee.
Thus, they have an incentive to steer you to put money through their ad network.
However, the inventory that is mainly available on these ad networks -- display ads -- is a dying channel.
The clickthrough rates of display ads has been declining for many years, and discussing "banner blindness" is at this point a cliché.
You could argue that repetition of your brand's name or logo in the background might still build a degree of trust that could make a prospect more inclined to open a cold email or respond to a LinkedIn connection request.
However, B2B decision-makers are spending less and less time on websites that serve display ads.
What websites do I even visit at this point?
- Company websites that don't serve ads
- SaaS products like Salesforce that require a login and don't serve ads
- Social networks that have their own ad platforms and don't serve third-party display ads
- Apps on my phone that don't serve ads or only serve their own ads
The only time I engage with display ads is when I read the New York Times, but that's less and less often, as more of my news gets sent to me via Telegram channels or Twitter.
Therefore, the number of available impressions for tech-savvy B2B buyers is likely to be declining sharply.
The ABM tactics in most marketer's playbooks are designed to benefit ABM software vendors
The category "ABM' was popularized by software vendors. Thus, it stands to reason that the tactics presented at conferences and in most material available online is driven by the needs of the martech companies and not by their clients.
This is not to say that ABM is useless. Getting very clear about your company's ideal prospect and then creating content designed to build trust with that prospect is of course a great idea. But the idea that building a target list, paying a martech platform, and uploading that list to the platform is likely to back out is kind of silly.
Like most solutions presented as "magic pills," they are usually disappointing and either don't work or, if they do work, have unwanted side effects or don't work for long.