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B2B AdvertisingThe strategy, theory, techniques and possibilities of building B2B brands
Association of Business to Business Agencies, UK
Marketing by businesses of their goods and services to other businesses is a large global industry. Estimates of the amount vary according to definition, but there is little doubt that many billions of dollars are spent worldwide by companies marketing to other companies. Forrester Research* estimated that in the United... read moreStates $77 billion was spent in 2005 on direct B2B media alone. In the UK, Nielsen research estimated that in 2006 £360 million was spent solely on press advertising by businesses for businesses. So B2B marketing and advertising in particular is an important and growing sector.
The scope of this series is to explore the world of B2B advertising. It will look at:
• The purposes behind B2B advertising
• How it is done, and what makes it more effective
• The different types of advertising and the choice of media and channel
But why do organisations whose customers are other businesses advertise? All marketing is aimed at creating a favourable environment to sell goods and services and B2B advertising is no different, but there are key purposes behind B2B advertising:
• It helps create and maintain the value of a brand
• It generates or maintains awareness of a product or business
• It can open a dialogue with potential customers
• It can reinforce relationships with existing customers
• It can generate direct response and leads from the target audience
• It can instigate and promote a consumer “pull”
• It can improve and enhance expectation of the customer experience
But what makes B2B different from other forms of advertising?
“B2B” is a term first used in the 1980s. Previously, marketing by companies of their goods and services was known as “industrial” marketing, but it became clear that many companies sell business services, not goods or products so “B2B” was coined as a catch all phrase. At first it was treated as just another sub-set of normal advertising, but over time it has become clear that there are distinct attributes in the needs of the target market that influence the skills and concepts in producing good B2B advertising. B2B sits in the middle of a value chain that ends in the ultimate consumer, but as a general term it covers marketing to commercial businesses, central government and local government, and is usually bought by individuals at work on behalf of their organisations. This creates key differences between B2B advertising and its FMCG (fast moving consumer goods) and B2C cousins.
Firstly, the most quoted difference is that B2B advertising is aimed at a completely different audience and therefore needs to be constructed and created differently. This is of course nonsense. The people who buy a high-technology information system for their business still go out and buy Colgate toothpaste. People in business are people at work but still people. What it entails is the use and balance between rational and emotional appeals, which is subtly different within B2B than in consumer marketing. Good B2B advertising demonstrates an understanding of where it stands in the buying cycle of the goods and services it is promoting. It takes into account how much of it needs to appeal to an emotional and brand centric instinct, and how much needs to convey a more rational argument for selecting the product. In all advertising there is an appeal to emotional and rational persuasion; even ads to consumers work best when conveying both emotional (brand image) and rational (brand position) concepts. In B2B advertising, the blend needs to be even more carefully considered and the right balance achieved.
This need for emotional and rational balance in the marketing of B2B products is similarly reflected in the way buying decisions are made in business. The decision making unit in B2B advertising is of course considerably more complex than at an individual or family level and B2B advertisers need to be aware of the roles played by not only the main target of their efforts, but the advisers, influencers, purse-holders, “rubber-stampers” and other stakeholders who participate in the decision to buy. Frequently this means creating not only an appeal on an emotional level to the main target, but also giving them rational arguments to persuade others. People at work make emotional or heuristic based decisions, but they do need to appear to be making them on rational grounds.
B2B advertising is usually about more complex products and services compared to consumer marketing. This means that it is more difficult to really tease out the essential value proposition that the advertising needs to focus on. It is not enough to understand that product x will do things faster, or better, the advertiser should take it a stage further and be able to understand what difference “faster” or “better” makes to the lives of the potential buyers of product x and distil it into a meaningful and memorable concept that has real appeal on all levels. B2B advertising makes the benefits of complex products appear simple.
Usually, though not always, B2B advertising addresses a much smaller number of consumers, which enables more specific and accurate targeting, and frequently what it promotes has a higher transaction value. Clearly this is not always the case –an expensive car costs much more than a laptop, but the cost range of B2B products and the quantities each purchaser will buy is much higher.
Finally, there are many more consumers than businesses, so the target group is generally smaller. Even if the advertising appeals to multiple decision makers within the organisations it is aimed at, the group will usually be smaller and more tightly defined than in consumer marketing. This in turn permits a more target specific and less broadcast approach, and hence why TV is not usually the medium of choice in B2B advertising.
These features of B2B advertising have always been there, but B2B marketing and advertising itself has changed at an accelerated rate over the past few decades. To begin with it has grown in value and more especially in the variety of methods used as well as their complexity. The old model of largely print advertising with an AIDA (Awareness Interest Desire Action) format has been augmented and diluted to the point of disappearance. New techniques and new formats have been implemented against a background of an enormous switch to digital technologies for businesses to use to advertise their products. Online advertising spend has grown exponentially, and with it a whole host of new and exciting ways to involve an audience in messages have developed: podcasting, blogging and social media are all part of the web 2.0 evolution. Search marketing has become a major enhancement to online advertising and an important part of media budgets. Businesses have taken up these challenges and are increasingly using them, because so much B2B activity now takes place online. Whether we classify some or all of them as “advertising” or “direct marketing” is largely irrelevant now, these are distinctions for marketers. The new techniques are creating customer centric programmes, and allowing the consumer at work to make a choice.
* Source: Forrester Q2 2006 Business to Business Marketing effectiveness Survey