Despite historic skepticism from B2B boardrooms, brand building has been going through somewhat of a renaissance over the past few years.
For all too long, the B2B marketing function was seen as a cost-center whose existence was to support sales in accelerating pipeline and maximizing ROI. Mentions of brand in the boardroom could be met with disinterest and to a certain extent, fear, driven by difficulties in measuring its impact on the bottom line.
The effects of a negligent approach to B2B brand building were clear. In 2019, the Financial Times partnered with the Institute of Practitioners in Advertising (IPA) – a professional institute for agencies and individuals working in the UK’s advertising, marketing, and communications industry – to publish the ‘Board-Brand Rift’ report revealing that over half of business leaders rated their knowledge of brand building as ‘average’ to ‘very poor’.
But things are changing. In just a few short years, brand has made its way to the top of B2B marketing leaders’ priority lists. Our ‘State of B2B Brand Building 2022’ research report reveals that 71% of B2B marketing leaders acknowledge that boardroom views of brand building have changed significantly in the last 12 months – with over 60% now believing that brand marketing is a strategic business priority.
B2B buyers want more from business:
The marketplace has seen a huge shift in B2B buyer behavior driven, in part, by the COVID-19 pandemic. Concerns over public health, the environment, and job security contributed to a climate of fear and anxiety in which buyers looked to make more ethical purchase decisions – turning to business as a bastion of societal leadership.
Two years on, B2B buyers are increasingly looking to engage with highly resonant and authentic brands. They want to know that the companies they buy from reflect their own values and whether they contribute to wider society, putting purpose above profit.
"COVID-19 has accelerated the need for our brand to have a real and meaningful purpose; one that contributes more to the local community and improves lives. This is what our buyers now expect from us."
- Survey response from a B2B marketing leader.
B2B brands need a clear and defined purpose to stay competitive in today’s marketplace. Brand trust, transparency, and authenticity are all high on the list of customers’ brand selection criteria, and organizations need to respond to match. Thankfully, it seems like they are: Over one-third of those surveyed said they needed to reset their brand strategy and proposition to strengthen the emotional connection with their audience.
Competition is at an all-time high:
The pandemic, however, was not alone in shaping today’s B2B marketplace. A surge in mergers and acquisitions across B2B industries has intensified market competition, reducing the effectiveness of demand generation campaigns on revenue growth.
As a result, B2B organizations have started taking a progressively long-term view of brand. Many are turning to brand awareness campaigns to build memory structures in the minds of prospective future buyers – reflecting Professor John Dawes’ 95:5 heuristic.
"We need to keep our company in users’ minds. Creating memorable impressions and standing out from the crowd through our brand is more important than ever before."
- Survey response from a B2B marketing leader.
However, as brand continues to skyrocket in importance, so does the role of creativity in B2B brand building. Of the B2B marketing leaders we surveyed, 42% highlight the need to better define their brand to help differentiate themselves.
Buyers today can be fairly confident that a range of companies can deliver what they require, leaving differentiation to brand rather than a product or service. And this is reflected in how our respondents agree that a shift away from the B2B ‘safe and steady’ approach enables more unique brand positioning and ultimately, improved standout in the hearts and minds of their audience.
New approaches, old problems:
Perhaps unsurprisingly, shifts in boardroom priorities aren’t without their challenges. While over half of our survey’s respondents said that brand building is equally as important as demand generation in achieving their marketing goals, 40% told us that only 5-20% of their annual marketing budget is allocated to brand building programs.
This comes in stark contrast to Les Binet (Head of Effectiveness at adam&eve DDB) and Peter Field’s (a seasoned Marketing Consultant) seminal research piece stating that B2B brands should look to spend 60% of their budget on brand and 40% on demand for optimum effectiveness. For B2B brand marketers to allay boardroom concerns and win increased brand investment, they need to become more market-oriented and talk the language of finance.
Providing a clear link between authentic, purpose-driven brand building initiatives, customer acquisition, and increased revenue growth – along with the ability to command higher prices, negotiate better supply chain contracts, and attract better employees – can help demonstrate the commercial value and competitive edge of a brand.
Alternatively, B2B marketing leaders can look to relate brand investment to the challenges that keep their CFO awake at night. The B2B Institute’s Jon Lombardo recently spoke on Fergus O'Carroll’s ‘On Strategy’ podcast about the importance of the relationship between marketing and finance. In general, 20% of a company’s stock price is based on short-term cash flows, while the other 80% is based on the long-term.
Lombardo argues if CMOs work with their CFO to pair this cash flow-centric view with a customer-centric marketing strategy, they can pave the way for a rebalancing of the marketing budget in favor of brand building initiatives – enabling greater investment in capturing the 80% of future buyers.