Time To Reconsider B2B Brand Marketing
The balance between performance marketing and brand marketing is crucial to the success of the business - and neglecting brand marketing will have a detrimental impact on both short-term and long-term business performance.
Recently, there has been much talk about the dominance of performance marketing in the B2B world, often overshadowing the significance of brand marketing. However, let's dig deeper and uncover the truth.
According to research, only 5% of B2B buyers are in the market to purchase your product at any given time. The remaining 95% are outside the market, but when they are in the market, they are more likely only to consider the brands they are already familiar with. As a business client, it's undoubtedly challenging to feel comfortable signing a contract with a company you've never heard of. Or, as the saying goes, "Nobody ever got fired for buying IBM." This is precisely why investing in brand marketing is absolutely crucial. Sage, the multi-billion dollar B2b finance and HR software company credits its recent investments in brand marketing as the primary reason for its double digital growth in revenue and profit.
It's important to emphasize that this importance extends equally to the B2C world, which has also seen increasingly more significant investments in performance marketing. For example, in 2019, before the pandemic struck, Airbnb made a strategic shift in its marketing approach, emphasizing building its brand and reducing reliance on performance marketing. According to Airbnb's Chief Financial Officer, Dave Stephenson, this shift has proven to be the right move, not just in 2019 but also in 2020 and 2021. In November 2002, the company reported its most profitable quarter, attributing its pre-pandemic shift away from search advertising as a wise bet.
While performance marketing can yield immediate business results, neglecting brand marketing negatively affects short-term and long-term business performance for the following reasons:
🔹 Loss of customer mindshare
🔹 Loss of your brand narrative
🔹 Diminishing brand differentiation and equity
🔹 Inconsistent customer experiences
🔹 Lack of brand innovation
Unlike performance marketing, quantifying the financial value of brand marketing has traditionally been challenging. This difficulty often makes it hard to convince CFOs and CEOs to allocate the necessary budgets for brand building. Furthermore, the actions of some CMOs, who have prioritized a more artistic approach to brand building over a balanced blend of science and art, have only fueled skepticism regarding the financial impact of brand marketing. However, it is crucial to recognize that brand marketing plays a vital role in establishing trust, credibility, and familiarity with potential customers, ultimately leading to consideration at the time of purchase consideration. In addition, it sets the foundation for future business opportunities by nurturing long-term relationships. The good news is that we now have more significant insights into consumer buyer behavior, enabling us to more accurately measure the effectiveness of brand marketing efforts and their likely impact on revenue and profitability. Moreover, adopting this more scientific approach to assessing brand performance (i.e., "Performance Branding") makes it easier to gain the necessary support from critical decision-makers by demonstrating its long-term value and competitive advantage.
Let's shift our perspective and embrace the power of brand marketing to build trust and credibility a, importantly, share of mind. It is time to strike the right balance between performance and brand marketing, leveraging both the science and art of our craft to drive sustainable growth in the B2B landscape.