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Micro segmentation of your LinkedIn Ads. Your LinkedIn Rep says it’s a bad idea. I say it’s great. Let’s discuss why this strategy is so divisive. On this week’s episode of the LinkedIn Ads Show.
Welcome to the LinkedIn Ads Show. Here’s your host, AJ Wilcox.
Hey there LinkedIn Ads fanatics, your LinkedIn Rep may have warned you against something called micro segmentation, which is what they call it when you create a campaign that has too few members and your target audience. Now, I highly recommend micro segmentation. But our definitions are very different. On this episode, we’ll dive into how you can use segmentation to get better ad performance, easier reporting, and definitely to learn more about who your target audience is, and what they engage with. Let’s jump right in and hit it. And definitely the next time I decided to coin a term, I’m going to try to make sure that it doesn’t match what a LinkedIn Rep warns you against.
So everyone knows that LinkedIn ads is great for lead generation. That is, of course, why we come to the platform is access to an ultra premium audience. But a little known fact about LinkedIn Ads is that it’s also spectacular for market research. And by market research, I’m not saying run ads, asking people about what they think about your company or anything like that. But you probably already have a good idea of who your ideal customer persona is, right? That’s why you’re using LinkedIn Ads. So you can target exactly those people. So for example, let’s say that your ideal target audience is decision makers in IT. It would be really easy to create one campaign targeting the IT job function, and then layer in all seniorites that or manager and above. And you can run that and that’s totally fine. But then after you’ve run that campaign, you don’t get any sort of understanding further about your audience, you might get good ad performance, you might get bad ad performance somewhere in between. But ultimately, because you don’t have anything to compare this against, you are left with no levers to pull. So instead, imagine that instead of that one campaign, you’ve created four separate campaigns. One is IT with a manager seniority. Another one might be IT with a director seniority, another might be IT with a VP seniority. And then finally, your fourth one would be IT with a CXO seniority. So let’s say you are running an AB test to this audience, well, you put the same AB test in each of those four campaigns and now you’re targeting the same size of audience, you didn’t have to create many more ads, you just created the same to over and over again, but now you have four campaigns that you can compare against each other, to learn more about what different segments of your audience are doing, what they like, what they engage with. By doing this, you can get some insights like for instance, maybe CIOs convert higher to the lead. But maybe they’re harder for the sales team to get a hold of for a demo. So their cost per SQL ends up being higher. And maybe IT managers have a higher cost per click, but they’re easier for sales to get an appointment with. So maybe they have initial higher costs, but when you let it all bake out in your sales funnel, it all of a sudden makes a lot more sense. I like to do this basically, anytime that I’m targeting an audience with multiple singularities. I’ll break up that audience by seniority, so I can learn who likes what content. You might see that certain offers are interesting to those who are VP and above. And other offers are more interesting to those who are like manager and director level. And this is really easy to do, you could do the same thing by segmenting by industry. So for instance, let’s say you’re going after tech companies, what you could do is take LinkedIn’s industry of internet, which is obviously very broad. It includes things like Google and Facebook, and Snapchat are all classified as internet. And then you might do a separate campaign for anyone who says that they’re in computer software. And then if you compare these results against each other, you might find that one industry actually produces higher quality leads than another. And if you can figure that out early, great. Now you can pare down your budget for the one that isn’t working, and feed the one who is and get more of those high quality leads that your sales team loves. A lot of times I’ll see campaigns that either clients have been running before they’ve come to us, or accounts that I’m auditing. And I’ll see that they’ll have one campaign with a whole bunch of different job functions. So let’s say marketing, and accounting, and business development are all in the same campaign. And when you ask them about it, they’ll say, well, our message really is irrelevant to all of those people. And I’m not disagreeing with that fact. Your message could be really good for all those people. But the fact that they are all lumped into the same broad campaign means that you’ll never learn. Whereas if you broke it out, you might find that, oh, wow, accountants don’t interact with this at all. So hey, maybe we spend less on them or maybe we create a custom Add Variation just for the accountants. And this is data that you would only know if you’ve broken them out. To learn more, you’ve got to have them in different audiences. We’ve done the same thing with geographies. So of course, if you’re advertising to a whole bunch of different countries, you know that the culture in each of those countries is going to be very different. And so if you haven’t broken them out, you might not be able to tell. The big one I remember from my past, I was advertising for franchises in all of North America. And I found that Canada was not converting very well at all. And I had no idea why it eventually dawned on me that in my form, I was asking for a zip code. And in Canada, they don’t call it a zip code, they call it a postal code. And so it was very, very apparent that I was an American, trying to advertise to Americans, and just added Canada on. So as soon as I gave them their own form, conversion start flowing in. So you can do this, if you are going after all North America. Or maybe you’re advertising to all English speaking countries, like the US, Canada, the UK, Australia, New Zealand, as long as your audience sizes are large enough, in each of those countries by themselves. If you give them their own campaign, it then allows you to suss out and find what are those cultural differences that are making people convert higher, interact higher, convert lower, interact lower, we’ve even done this in the US with time zones. So we’ll add all of the states that are in the Pacific Time Zone, to their own campaign, all states that are mountain time into their own campaign, Central Time, Eastern Time Zone, etc. And by doing that, it allows us to do some really cool day parting. Because if you start showing ads to people on the East Coast, at 6am, their time, you’ll all of a sudden be advertising to people on the west coast at 3am, which isn’t a great time to be advertising. So if you’ve put them in different time zones, and then you’re turning your campaigns on and off at those times, it’s gonna be a lot more exact, you won’t waste your money nearly as much. If you want to dive more into day parting and ad scheduling, definitely check out episode 63.
We also really like to segment by company size. So what you can do is say, hey, if we go after all companies that are size 200. and above, well, let’s put 200 to 500 in its own campaign, and then 500 to 1000 in its own campaign, and then maybe 1000 to 5000 in its own, and then 5000 and above in its own. And now all of a sudden you get to judge what is your cost per lead by company size. And a lot of sales teams will look at a company size to tell you what quality of lead that is. And they care more about the larger companies, because they’re gonna have a lot more budget to do this. And that’s super easy to do exactly like we talked about earlier. And there’s a whole lot of other segments that you can also break up campaigns by, for instance, you could do field of study. So what did someone study in college, you can do growth rate of a company, those that are growing slowly versus those that are rapidly growing, and message them differently, you can really segment by any sort of targeting that is broad. And what I mean by broad, it means that there are a few options that broadly define the entire market, it doesn’t usually make sense to do this to segment by job title, or by group. Because when you put one set of people into a group, or specify one job title, and then you specify another, you’re still leaving out a huge chunk of the population. This isn’t a great way of splitting the audience up to learn more about it, you’re going to end up with really small target audiences. So think about how you can break up by some of those elements like seniority or job function, industry, geography, company size, those types of things. Plus, it really didn’t cost you anything extra to break out all of these micro segments of your audience. But now you can test all of your offers and motivations to find out what engages and drives each micro segment of your target audience. Plus, now you have all these extra levers that you can pull when you want to improve performance. So for instance, if you’re pacing ahead of budget one month, it’s really easy to just go down and bid down the lowest performing micro segments. And that’s going to naturally push your ad performance higher while restricting the budget. Or maybe your sales team tells you that certain types of leads are worth more to them. They’re a higher quality lead, so you can bid down or shut off the micro segments that are pulling your performance down and feed the ones that are more like what sales wants. And since you already have these campaigns, you can take it a step further by adjusting your ad copy to talk directly to the people. For instance, in the past, when I was going after business owners or CEOs, I would put in the ad copy, “Hey CEOs” to try to get their attention. Because you’ve already defined who your audience is in these little micro segments, if you can think of a call out to them that they would recognize, this becomes a test that you can easily do to call out to people. One thing that I noticed when I was doing this, calling out to people by some sort of an identity, it certainly makes sense sometimes when they identify themselves by that entity. But sometimes you’ll call out to people, and they don’t define themselves by that. So for instance, if I were going after marketing directors, if I shout out to them, “Hey Directors”, they may not actually identify themselves, strongly by the fact that they’re a director, they might identify themselves more powerfully as marketers, so I might do better to say, “Hey Marketers”, or “Hey Marketing Leaders”. Okay, here’s a quick sponsor break. And then we’ll dive into how you can actually use these micro segments to optimize and control your account performance.
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Alright, let’s go ahead and jump into how you can actually control and optimize your account when you have these micro segments. So I use the example before how if you’re pacing ahead of budget, you can turn some things off that aren’t super helpful to your account. Every so often, a client will come to us mid month and say, for some reason, my boss just cut our budget in half for this month, we have to slow things way down. Well, if the account has an average cost per lead of like $80, for instance, it’s really quick to go and segment all of my campaigns by their cost per lead, and sort from high to low. And all of a sudden, here’s this list of the 20 campaigns that are bringing leads in for significantly more than that. So I have some that are bringing in leads for $100 and some $150 and $250, for instance. So we’re reacting to a pretty urgent call from the client to cut down on budget and spend less. But by doing it this way, we go in and pause all of the campaign’s that are performing worse than average, we’ve stopped spending as rapidly. And now we don’t have spend going to those campaigns that are having a high cost per lead. So as we’re cutting down on our spend, we’re also watching our average cost per lead drop. So it was an ad. And after cutting out the higher CPL campaigns, we might be averaging 60 or 50. And it’s a great way to finish that month, especially if we know that we had less budget to work with. We had a client who was in the business financing space, and they had three different industries they were going after. So naturally, we had the campaigns all segmented out by industry and we found that the retail industry for whatever reason, was underperforming compared to the others. And so it was really easy to go through as a blanket change and pause or bid down all of the retail industry segments. And we put that budget into the to other industries that were performing well. And it’s important to know that if you had all three of these industries lumped into the same campaign, you would have totally missed that fact that that was an optimization you could do. If you haven’t listened to episode seven, where we talk about account organization, you’ll definitely want to go and listen to that. Because I recommend a campaign naming structure that identifies within the campaign name exactly who that audience is. And what’s so cool about this is when we micro segment and we’re describing who the audience is right within the campaign name, it makes reporting super easy, and gives you capabilities that you wouldn’t have otherwise. So for instance, if all of your campaigns that are targeting directors have something like DIR for director in them, when you go to start your campaigns and look at the results by campaign, you can very quickly find all of those that are targeting directors. And if you find that directors are performing really well, great, you now know all of the campaigns to go and increase your bids on or give some expanded budget. Also in our campaigns, we identify the type of targeting we’re using. So we might put JF in a campaign name, when it’s targeting by job function, we might put JT, if it’s targeting by job title. Then when we get all of the results, let’s say from the whole sales funnel, we can very quickly combine in a pivot table all of those audience names, and combine all of the performance from job title targeting versus job function versus skills targeting versus groups targeting. And we’ll find some things like oh, wow, job function over here is more expensive, or leads to more volume, or groups targeting is really, really limited on audience size. But boy, it’s efficient when it works. So definitely go back and listen to episode seven to get more information about how we do that so you can do the same thing.
I’m sure many of you already know my feelings on using audience expansion on LinkedIn. Let me tell you why I hate it. Because it is exactly the opposite of micro segmentation. We’re talking about taking specific audiences and breaking them out so that we can compare them against each other and learn from the differences. Well, when you use audience expansion, it takes an existing large audience, and it adds people to it, that you don’t know who they are. You don’t get to gauge the quality of that audience until later when your sales team comes to you and says, hey, the quality of leads have been really crappy recently. So not only are you giving LinkedIn the opportunity to insert low quality audiences into your campaign, but it mashes those audiences together in a really opaque or non transparent way, and makes it impossible to actually learn from. So if you want to expand on your audiences, I would highly recommend go and create a look alike audience instead, because at least a look alike audience will allow you to run the native audience and the look alike that was created from it separately. And now you can compare and find out like, oh, look alikes are performing well, or no, they’re not, we should stop doing that. So please, please, please, if you have audience expansion turned on anywhere in your account, please go turn it off. You can thank me later. So I can already hear a couple of you saying like, well, if I break out all of my audiences into micro segments, that’s a lot of campaigns to manage. And yeah, that’s the truth, you may be managing more campaigns, but it only takes a few minutes to create a duplicate of a campaign. And so the rewards of doing this are much, much higher than I feel like what the cost increase is for you in managing the account in your time. Plus, we manage accounts with 1000s of campaigns in them. So I can tell you, it’s definitely scalable, it’s possible, you’re not going to make a huge mistake by breaking things out to learn more about your audience. It’s also really likely that you’re not going to be running all of these campaigns forever. Because once you find those micro audience segments that are underperforming in comparison to others, you can always cut them out by pausing. I mean, obviously, pausing is the best way, but you could always bid them down if you just wanted to get their costs lower. And when you take those campaigns out of the mix, you’re giving yourself fewer campaigns to manage. I can also hear some of you saying, Well, my LinkedIn Rep says that I should only run campaigns that have an audience size of at least 300,000. Well, by breaking up your existing audiences into smaller segments, you’re still targeting the same audience size in total. So you can tell your LinkedIn Rep, we’re still targeting the same people, they’re just in more campaigns. Plus, now you’ll see better performance with your ability to turn off or bid down any segments of the non performers, which you wouldn’t even be able to tell were being targeted before when it was just one big lump campaign. And my opinion is, you’re already paying a premium for using LinkedIn, which means you’re paying more for LinkedIn leads than you are under their channels. So why not have that budget also give you insights into the behavior of your customer persona. Plus, everyone who’s running LinkedIn ads is always looking for ways of decreasing costs, because costs are already so high. This is one of the ways that you can do that really effectively. All right, I’ve got the episode resources for you coming right up. So stick around
Thank you for listening to the LinkedIn Ads show. Hungry for more? AJ Wilcox, take it away.
All right, here are a couple of great resources for you. Number one, go check out Episode 63 on ad scheduling. To find out how we schedule our ads at different times of day and different days of the week. Check out Episode 07 about account organization for how you can make it easier to report and easier to find insights. If you or someone on your team are looking to learn more about LinkedIn Ads, check out the course that I did on LinkedIn Learning with LinkedIn. The link is right there in the show notes below. And this is by far the least expensive, and the best quality course out there. If you’re a new listener to the show, hit that subscribe button. So you can hear more of this when we come out with new episodes weekly. And please do consider rating. And definitely leave us a review on the podcast. We would absolutely love to hear what you think. And when you leave a review, we’ll shout you out live on the show. With feedback or suggestions on the podcast, reach out to us at Podcast@B2Linked.com. And with that being said, we’ll see you back here next week. Cheering you on in your LinkedIn Ads initiatives.