Best Practices for Setting Account-Based Advertising Budgets

5 minutes
Feb 25, 2022
Account-Based ExperienceDigital Marketing

So you’re ready to start running account-based advertising programs. Great! But how much should you spend? Budgeting for account-based advertising is a bit different than it is for other advertising...

So you’re ready to start running account-based advertising programs. Great! But how much should you spend? Budgeting for account-based advertising is a bit different than it is for other advertising tactics.

The channel-based budgeting approaches you’ve likely used in the past are not particularly helpful. You’ll need to adopt a different approach to manage budgets over time.

Plan Based On Spend Per Account

Let’s start with this scenario: Your account-based advertising is having a huge impact. You have more engagement, more meetings, and more opportunities from targeted accounts than ever before.

It’s going so well, the budget has increased by 20% … and it’s going so well, the business wants to double the number of accounts targeted, too! 

That’s a problem. Even though the budget increased, you won’t be able to repeat that stellar performance. Even though a 20% increase seems impressive, it can’t generate the same kind of impact on each account with twice as many accounts. 

Your planning and budgeting must be based on an average spend per account. As the number of accounts change, you’ll need to show how the budget must change to maintain effectiveness.

For quarterly and annual planning — or evaluating extending account-based advertising to new segments — this makes any disconnects between budgets and scope immediately clear.

Set Budgets That Make a Difference for an Account

Let’s say you need to make a meaningful impact on a specific set of accounts. Maybe they’re valuable to your business in the long-term, or maybe now is simply the right time to engage them. Regardless, you’re targeting ads to these accounts because, for now, they matter more to your business than others.

Your spend, then, must be able to make a difference in those accounts. How much should you spend? Here are two guidelines to set initial budgets. The budget can be further refined by measuring lift versus a control group of accounts:

Budget More Than $10 Per Account Per Month

Start with a planning budget of $10 to $30 per account per month (add more for enterprise accounts). Make sure you’re targeting the right people in the account — not the entire company. A budget below $10, for all but the smallest accounts, is unlikely to have a meaningful impact.

Most advertisers targeting mid-market accounts should expect to spend $20 to $30 per month per account. At that spend, you’ll drive direct traffic to your site from a significant portion of targeted accounts. 

Targeting the right people within an account is critical. If you were targeting a company with 100,000 employees, you could easily purchase 1 million impressions in a month and likely spend $6,000 to $11,000! And that’s only an average of a couple impressions per person per week. Worse still, much of it would be delivered to low-value individuals in the account. 

Persona targeting is the best way to narrow your reach within an account. Even with persona targeting, spending hundreds per month against large strategic accounts with multimillion-dollar deal values is not unheard of or inappropriate … but this level of investment is generally limited to a small number of strategic accounts.

An Insight for  6sense Customers

For 6sense customers using dynamic segments, the best way to set budgets is based on the number of accounts in the segment. The number of accounts reached via ads will often be higher after a month due to accounts moving in and out of the segment.

Increase Spend When It’s Time-Sensitive

When targeting in-market accounts for the first time, based on a predictive model or using intent and engagement data, double your spend per account. 

Advertising has a cumulative impact over time. When you need advertising to make an impact quickly — such as when an account is in-market and you haven’t been actively targeting them — you need higher spend to replicate that cumulative impact in a short period of time.  

Scaling Account-Based Advertising to Larger Markets

Successfully using account-based advertising across a large market often relies heavily on significant investments for a short period of time against an account.

By only targeting accounts when they are in-market, which is often less than 20% of accounts at a given time, an ad budget can support significantly more accounts over a year.

When adopting this approach, create multi-channel marketing programs combined with outbound BDR prospecting. This maximizes the number of meetings and opportunities from targeted accounts, which is vital.

The Exception to Per-Account Budgeting

Account-based advertising is also an alternative way to reach your target market. Particularly for companies serving a small discrete market, account-based advertising may be used to target the entire market.

In this case, a traditional approach to setting advertising budgets is appropriate, and can easily be combined with a program targeting in-market accounts created using per-account budgets.

Putting Advertising Spend and Impact In Context

The most frequent objection I hear about digital advertising is that it costs to much to do it successfully.

If that’s your reaction, focus your program on a smaller number of accounts at a time and rotate through those accounts. Alternatively, you may be targeting too many accounts — including many that simply aren’t worth an increased investment — when you should be focusing your budget on a higher value subset of your market.

A $10 a month spend generates 50 impressions a day. Most days, most people in an account won’t see your ad at all. Some may see it a few times. But just one article page, with ads automatically refreshed, may present more than 30 ads over the course of a few minutes.

The majority of these ads (including yours) are not consciously seen. Just 50 impressions a day isn’t sufficient to have a quick impact on any but the smallest accounts.

Alternatively, consider that spend against the advertising landscape and what your audience is exposed to. Digital media spending in the U.S. is expected to pass $200 billion this year, or roughly $1,000 per adult. With hundreds of people in an account exposed to hundreds of thousands in advertising a year, a $120 annual spend is likely well less than one-tenth of a percent of the ads they see.

When you care about a small group of individuals, and need to have an outsized impact on that group, and $10 a month simply isn’t enough.

Conclusion

Setting an account-based advertising budget doesn’t need to be complicated. Just remember to always consider it in terms of the average spend per account, and what it takes to have a meaningful impact in each one.