Opinions expressed by Entrepreneur contributors are their own.
You may have heard about the results companies are getting with account-based marketing (ABM) and you want to know what it will take to make it work for you. In particular, will it fit in your budget?
Like any digital marketing campaign, the cost of running ABM campaigns consists of multiple components with multiple line items within each component. ABM components include your tech stack, assets, channels and the expertise to execute and orchestrate everything. What can you expect to spend on each? What variables come into play? What kind of return can you expect from your investment?
Let’s break it all down.
How to think about ABM budgets
You may have seen the Forrester report that found the average annual ABM budget is around $350,000 (excluding headcount costs) and pilot campaigns around $200,000. It found more mature programs with proven value have budgets around $600,000, and budgets for established programs at large enterprises can run into the millions.
While these averages are a good jumping-off point, smaller organizations shouldn’t be put off by the price tag before learning more, and corporations of any size should keep in mind these findings may have already changed. Forrester found that 70% of organizations expected the average cost to rise between 2020 and today.
Related: The Rise of Account-Based Marketing
The best way to think about ABM budgets is to understand its components, your ICP priorities and the right budgeting methodology.
- Understanding ABM components. Tools, processes and people — like any digital endeavor, you need all three to run ABM campaigns. The number of accounts and individuals within those accounts you want to target also drives your budget. ABM components include:
- Strategy development
- Tech stack
- Asset creation
- Paid ad channels
- Expertise to run campaigns and analyze results
- Determine the relative importance of insight and engagement. Are you primarily looking for insight or engagement from your ideal client persona (ICP)? If you want to better understand your visitors’ intent and pain points, you’ll want to allocate more of your budget for insight. You’ll use this information to create targeted ICP content and give your team the perspective to make informed campaign choices. On the other hand, if your targeted ICP is within the same industry or niche, you’ll want to allocate more of your budget for engagement because the insight provided will be similar for all accounts within your ICP.
- Use the right budgeting methodology. You can use the same budgeting approach for an ABM pilot or 1:many ABM campaign as you would for a traditional digital marketing campaign, but budgeting for 1:few and 1:1 campaigns is more complicated and fluid. Personalized ABM campaigns focus on targeting individuals within accounts — the cost is determined by account value and not a fixed budget. The more valuable a particular account, the more you’ll want to spend on it. Account values often reveal themselves during the campaign, so you’ll want to use an account-based methodology with more flexible line items.
How to price out technology and expertise
While the actual dollar costs of targeting specific accounts and individuals are too variable to cover here, we can quantify the cost of technology and expertise.
- Budget for the tech stack you need. You’ll need to subscribe to a few key platforms to run ABM. The cost of your combined tech stack is based on the size of your organization and the platforms you choose — you can expect to pay $165,000 to $325,000 in total for the annual licenses needed to run ABM.
- Budget for the channels you need. Targeting accounts with the right messages at the right time means you have to get your assets in the right channels. ABM channels include programmatic, content marketing, paid search, SEO, paid social, email nurture, and online gifting. The total cost for each channel includes creating the assets and running them in the channel. While spending for each channel is highly variable by campaign, determining an overall paid-ad budget is part of your campaign strategy. It’s best to stay flexible with specific allocations so you can spend more on the channels that are proving to be more successful as your campaign progresses and less on the ones that aren’t.
- Budget for the expertise you need. You can use the right tech stack and channels for your ICP, but it’s tough to get the right ROI without the right team. You need:
- Tech stack integration specialists: Connect all platforms so they work together and convert data into dashboard visualizations everyone can understand.
- Analysts and strategists: Translate ongoing campaign data into actionable tactics that ensure you’re targeting accounts most likely to convert.
- Content writers and designers: Develop display ads, white papers, case studies, landing pages and personalized assets for 1:few and 1:1 campaigns.
- Search marketers: Convert complex marketing plans and research into SEO and PPC strategies that get ads in front of buying committees at every funnel stage. Remember to keep turnover in mind. Marketing specialists have a 19.8% annual turnover rate.
While the bottom-line number for an ABM program deserves thoughtful consideration, keep revenue generation in mind as you deliberate. To realize the promise of ABM, look at all of your options and allow the strategy to play out once you start.
The new B2B buying journey takes many months or even a year or more to move a buying committee from awareness through decision. The first ROI benchmark for ABM is usually around month six — by then, if you’ve invested wisely and your sales team is leveraging campaign data correctly, you should be seeing a return of three times your investment. Patience is a must.
The most sophisticated ABM agencies run full-funnel ABM campaigns that include sales enablement as part of their services. These agencies earn their clients up to nine times annual return on investment for 1:few and 1:1 campaigns starting with the first campaign, because they already have the teams, technology and orchestration expertise.