Stephen Diorio
The growing complexity of business-to-business (B2B) marketing - compounded by the digitization of business, a revolution in AI and advanced analytics, and an explosion of media channels - have changed the rules for planning, deploying, and optimizing media at scale in a modern B2B commercial model.
B2B buyers have become more informed, considered, independent, digital, and demanding. The average B2B buying cycle takes months and involved six to ten buyer personas. Buying teams are guided by more rigorous financial and strategic criteria. More than three-quarters of business customers describe their purchase as very complex or difficult, according to Gartner.
Buyer research by Gartner tells us business buyers demand faster, more relevant, and expert answers to their questions while also needing a reason to believe and act. 87% expect sellers to act as trusted advisors by demanding expertise and rich content. Delivering buyers this expertise with useful information that helps them do their jobs pays off - it triples the chances of getting a bigger deal with higher levels of customer satisfaction and less buyer's remorse. Thanks to the digitization of business only 17% of the buyer journey involves human reps, and 43% of millennial buyers would prefer to conduct the whole process online with no humans involved if possible.
A survey of 75 B2B marketing, media, and brand leaders identified seven media challenges that are unique to B2B marketing. They reflect the new rules for planning, deploying, and optimizing media in a modern commercial model, and imply that marketers are going to have to take advantage of a different set of economies of scale and force multipliers than their B2C peers. In particular, the challenges that B2B marketers face reveals the growing importance of using analytics to "shrink the audience bullseye," targeting media into key accounts and consistently delivering more personalized, persona-based content at every stage of the revenue cycle. The biggest lever that B2B marketers need to pull is aligning their media with other channels in the go-to-market mix, including owned, earned, and shared media as well as the sales channels that realize the value which the media programs create.
Understanding and managing these differences between B2B and B2C media planning, development, and optimization are important because almost every advertiser has a B2B aspect to their business. Over 90% of the member of the Association of National Advertisers (ANA) have a B2B2C segment within their go-to-market approach. And two thirds of the companies in the Brand Finance Top 100 brands are classified as B2B2C, having some proportion of their total brand value attributed to B2B, according to the Brand Finance B2B Index Report.
Marketing, media, and brand executives working in B2B consistently cite complexity as a critical challenge making their jobs more difficult. Every day they struggle with the inherent interdependence of marketing to businesses and enterprises, which have been compounded by the digitization of business, a revolution in advanced analytis, and an explosion of channels and media. These realities have, in turn, redefined the rules of planning, deploying, and optimizing media at scale in a modern B2B enterprise. Why? Because complexity drives up the selling costs and reduces the yield that marketers are getting on their growth investments and assets.
Although B2C companies make all the headlines in advertising, B2B enterprises invest hundreds of billions of dollars in paid media every year, attempting to grow revenues and expand their customer relationships.
Paid media still represents the largest single budget line item in the B2B marketing budget (22% of overall budgets). When factoring in spending on "omnichannel" media types - paid, owned, earned, and shared media with partners - the total investment represents up to sixty percept of the modern B2B marketing mix, based on an analysis of B2B media by GreenThread. Further, for every dollar spent on paid media, the average B2B CMO spends an additional two dollars on owned media - company-controlled websites, social media, mobile apps, and email) - shared media - media equivalency from sponsorship properties - and earned media - SEO, content marketing, and organic social. Further complicating the investment formula is the fact that B2B marketing has become far more capital-intensive because the digital channel infrastructure and data sets to support these media programs have grown to 38% of the overall growth investment.
Unfortunately, few organizations manage, measure, and invest in these growth assets, capabilities, and programs in a coherent way according to our research. While CMOs control paid media, few have direct control over the owned, earned, and shared media as well from an organizational standpoint. And finance teams fail to distinguish the difference between a marketing expense and a capital investment in a world where 83% of B2B buyer education, engagement, and activation happens across the digital channel infrastructure.
A big problem is that marketing teams tend to isolate the prioritization and activation of media across different budgets and teams. Also, they don't factor in the spending on content, data, and technology required to support the media campaigns, digital marketing, and even sales channels that drive business impact. The importance of connecting and orchestrating media strategies becomes a major challenge - but also an opportunity.
The analysis by GreenThread found that marketing leaders who were better able to connect the dots across their media investments, programs, and channels were getting up to 50% more business impact from their media investments. They were doing this by taking advantage of five new "economies of scale" in B2B media.
The frequent failure to align and connect all these moving parts makes planning, deploying, and optimizing media at scale in a modern B2B enterprise extremely difficult. Traditional approaches to managing media in isolation are less effective because B2B marketing has evolved to become a capital-intensive, digital, and data-driven team sport where digital marketing channels and the systems that they support enable them to play a major role in the B2B marketing mix. The GreenThread 2024 B2B Media Study shows that paid, owned, earned, and shared media - together with the systems, data, content, and operations required to activate them - now command two-thirds of operating budgets.
Changes in customer behavior over the past decade have only amplified the situation. B2B buyers have become more informed, considered, digital, and demanding. More than three-quarters of business customers describe their purchases as very difficult or complex. Business buyers demand faster, more relevant, and expert answers to their questions while also needing a reason to believe and act. 87% expect sellers to act as trusted advisors by demanding expertise and rich content.
Together these dynamics have rendered established models for managing and optimizing the performance of media programs and investments at scale inadequate. B2B marketes we talk to are struggling to allocate, align, and orchestrate their investments in media to accelerate growth, maximize customer lifetime value, and differentiate their brands. Our conversations and research with B2B CMOs and their partners have elevated the priority of solving these challenges and harnessing the underlying opportunities.
Unfortunately, B2B media expertise is in relatively short supply. Most of the rules, tools, and best practices for planning, allocating, and activating media at scale have been developed in consumer markets where the media buys are larger and upper funnel media spending is a big part of the growth formula. Consequently, most of the top marketing talent and the specialized media agencies have built their skills and capabilities around consumer advertising. As a byproduct, B2B marketers are getting less access to talent, innovation, and attention at a time when they need it more than ever.
To help B2B marketing, brand, and media leaders better understand and address these issues, GreenThread is working with leading CMOs, academics, and institutions to conduct the B2B Media Research Initiative. The goal of this ongoing research initiative is to validate and quantify the financial impact and performance of media in the modern B2B enterprise. After interviewing over 75 marketing, brand, and media executives as well as experts in B2B media, the research identified specific best practices for managing, optimizing, and maximizing the impact of media programs at scale on growing revenues, customer lifetime value, and firm financial performance. The findings reveal that it's possible to improve the financial impact of media investments and assets by over 50% by better connecting with the other parts of the organization. In all, the study has isolated and uncovered:
Seven Unique B2B Media Challenges: B2B marketing, media, and brand leaders face a unique set of challenges as they plan, deploy, and optimize media in a modern B2B commercial model that has become complex, data-driven, and capital-intensive. These unique challenges reflect new rules for planning, deploying, and optimizing media in a modern commercial model, and imply that marketers are going to have to take advantage of a different set of economies of scale and force multipliers than their B2C peers. In particular, the challenges that B2B marketers face reveal the growing importance of using analytics to "shrink the audience bullseye," target media into key accounts, and consistently deliver more personalized persona-based content at every stage of the revenue cycle. The biggest lever that B2B marketers need to pull is to align their media with other channels in the go-to-market mix, including owned, earned, and shared media along with paid, as well as the sales channels that realize the value which media programs create.
Five Economies of Scale in B2B Media: The B2B Media Study revealed the five ways B2B leaders are generating economies of scale in media including data-driven targeting, connecting content, and orchestrating media across channels and along the revenue cycle. The changing nature of the commercial model has shifted the economies of media and created a new basis of economies of scale. Traditionally, media agencies created scale economies and pricing leverage in media buying. Making large investments in media and having preferential relationships with media investments created cost efficiencies. As media become more fragmented, digital, targeted, and data-driven, the economies of scale have shifted to new areas. Modern media planning and activation requires significant investments and infrastructure in analytics to target audiences and tune performance, technology to deploy across many channels, and personalized content to support advanced dynamic messaging, persona-based messaging, localization, and ABM programs. For example, economies of scale in data management are paramount to success - identifying first parter customer interactions that media generates has become critical to multiplying the impact of media spend because it drives up conversion rates, supports personalization at scale, and makes it easier to monetize opportunities in sales, customer success, and account management channels. "The reality is most organizations have only scratched the surface of the vast financial potential of advanced analytics to drive superior performance and customer experience because the majority of programs are only using paid media and marketing automation channels," says Paula Conrad, the Chief Personalization Officer at Horion Media. "There is far greater potential for analytics to support the entire channel mix at every stage of the revenue cycle, including business development, customer success, direct mail, email, and well as other 'owned' digital marketing channels. That's especially true in B2B marketing where paid media is just a small fraction of the go-to-market formula."
28 Best Practices in B2B Media: The research identified an array of specific best practices B2B marketing leaders are using to improve the business impact of their media in terms of ROI, revenue, and firm financial performance by over 50% with existing resources. In all, the study has isolated four core capabilities that B2B CMOs should be taking advantage of to multiply the financial impact of their media investments.
Four "Must Have" Capabilities: the research provides a blueprint for the four core capabilities in analytics, content, channel alignment, and closed-loop measurement that are now essential to planning, deploying, and optimizing media in a modern B2B enterprise. "B2B marketers need to be much more precise and targeted in how and where they engage customers if they want to acquire, keep, and grow them," says Chris Hummel, President of GreenThread, who led marketing at United Rentals, Schneider Electric, and Unify. "It means having the ability to identify first party customer interactions, manage customer data at scale, and share it with your agency and media partners." To develop these core capabilities, marketers are bringing in expertise in data management, science, and analytics to help navigate all the data variables, connect the pipes, keep it legal, and make it easier to extract insights from the data at scale. And they are demanding that their agency partners become better at coordinating data and execution across a growing digital channel infrastructure which includes marketing automation, CRM, ABM, and programmatic point solutions and activation points.
A Financially Valid and Actionable Media Measurement Model: the research yielded the Connected Media Model, which provides CMOs a financially valid and actionable way to quantify and prove the unique impact paid, earned, owned, and shared media - and the capabilities that enable them - can have in any B2B enterprise, regardless of commercial model maturity or industry. Establishing a financially valid basis for sizing, allocating, and measuring the performance of media investment is essential to managing and optimizing its impact. Unfortunately, corporate leaders who allocate growth budgets and resources often struggle to quantify the financial contribution of their media investments because they can rarely all agree on the math that connects growth investments to business outcomes in an increasingly complex selling process. "With all the focus on advanced analytics and data-driven marketing, much progress has been made in tactical aspects of marketing execution, but not necessarily on the fundamental math of growth in a business," reports Professor Dominique Hanssens of the UCLA Anderson School of Management, the author of the book The Long Term Impact of Marketing. "In my experience, executive teams that make the big growth bets often lack consensus and alignment on fundamentals like the long-term value of the brand to their business, the true cost of customer acquisition, and the right balance of customer acquisition relative to customer retention." It doesn't help that the economics of growth are rapidly changing from driving awareness and demand to maximizing customer lifetime value, recurring revenues, and return on growth assets like brands and digital channel investments. This is because most B2B boards have re-focused their growth efforts on driving cross-sell and recurring revenue streams with the goal of maximizing annual recurring revenue (ARR), total contract value (TCV), and customer lifetime value.
The findings of the study are exclusive to our clients and study participants. However, we welcome B2B growth leaders who want to participate in this research, learn from our findings, and access our network of peer CMOs to register your interest using the link below.
