It's a Continuum, not a Conflict

Over the past several months, an increasing number of articles and data points have been calling attention to the fact that an over-reliance on performance marketing at the expense of brand has been both a race to the bottom for marketers and the cause of some seriously negative business outcomes. As Massimo Giunco wrote in his excellent case study of Nike*: "Nike invested a material amount of dollars (billions) into something that was less effective but easier to be measured vs something that was more effective but less easy to be measured. In conclusion: an impressive waste of money."

6sense, a leader in B2B market intelligence, recently published a report** encapsulating research they did with more than 900 B2B executives involved in the purchase process. Among their findings:

• B2B buyers avoid engaging sellers directly until they’re 70% through the buying process
• 78% of buyers have established their requirements before initiating contact with vendors
• 83% of vendor/buyer interactions are buyer initiated
• The first vendor contacted by the buyer ends up being selected 84% of the time

What all of this means is that, if you're not in the consideration set a long time before a buyer is starting to talk to vendors, you're essentially shut out. The vast majority of B2B purchases are not the result of lead gen or sales team activity alone. They are the result of strategies and tactics around thought leadership/content, expert consultations, educational events, and user/practitioner communities - all supported by clear, compelling branding and positioning - that are then picked up by lead gen and closed by sales. (There is good cause to believe this affects consumer purchases, as well.)

Additional research*** by a market analysis company called Analytic Partners comes at this from a different angle, but their results fully align with the 6sense findings. Their research indicated clearly that increased spending in brand channels not only improves performance in brand channels, it also improves ROI in performance channels. More importantly, it found that brand marketing outperforms performance marketing fully 80% of the time, which is to be expected given 6sense's findings about how the B2B buying cycle works.

So, what to do? Boston Consulting Group published a report**** in 2022 estimating that there is a $2T opportunity to boost sales and lower costs by moving away from wasteful, inefficient, and outdated sales and marketing processes and embracing RevTech (Revenue Technology, or technology-enabled revenue capture) and Account-Based Marketing (ABM). BCG recommends (and I generally agree) that some form of this RevTech framework be installed:

• Automation to scale efficient demand generation
• End-to-end visibility through the full sales funnel
• Relevant and accessible sales content to improve conversion rates for sellers
• Data-driven customer success capabilities to reduce churn and increase cross-sell and up-sell rates
• Agile “solution squad” to act as a central nervous system for the effort, integrating across silos

Additionally, since the average enterprise B2B buying team has 7+ members, strategies should be tailored to address the complexities of a larger decision-making group, and this is where ABM comes into play, particularly for low-target-rich markets. (Note again, that a lot of ABM covers the top of the marketing/sales funnel - ie. brand - and so does BCG's RevTech recommendation. Likewise, note that there are likely to be strong parallels here with high-consideration purchases in the consumer space.)

Treating performance marketing and brand building as a trade-off between short-term and long-term is counter-productive, since both impact current revenue and long-term value. Further, short-term performance marketing can actually damage long-term brand building, just as poor brand building can hamper short-term growth. They should not be thought of as strategies that need to be balanced against one another, but as a complementary continuum. Brand building is as financially measurable as performance marketing, although it often requires higher investment to get to it, and brand KPIs should be established and incorporated into a unified reporting view.

Done correctly, brand marketing is not a cost center, but a data-driven ROI engine, and there is significant opportunity cost for firms that don't invest in it.

BIBLIOGRAPHY

* Massimo Giunco's case study, Nike: An Epic Saga of Value Destruction: https://www.dhirubhai.net/posts/massimogiunco_nike-sneakers-digital-activity-7223265757982318593-P0xZ

** 6sense readout: https://6sense.com/report/buyer-experience/

*** Analytic Partners research: https://info.analyticpartners.com/roi-genome/flash-brand-vs-performance/

**** BCG report: https://www.bcg.com/publications/2022/boost-sales-lower-costs-opportunity-with-revtech