Business-to-business marketers have it tough.
First off, B2B involves low-volume, high-value deals, which means mass-marketing campaigns won’t work. B2B marketers are also selling to accounts that have many influencers, which makes personalization somewhat of a challenge. But it’s not impossible, according to Greg Ott, CMO of Demandbase, an ad tech company that helps B2B companies personalize marketing communications for customers and prospects.
According to Ott, effective personalization for B2B depends more on the advertiser’s relationship to the company than an individual’s past browsing behavior. He expands on this topic in this exclusive interview with CMO.com, along with why the banner ad hasn’t been doing all that well for B2B, how to personalize when you're selling to businesses, and how the B2B CMO should think differently than the B2C CMO.
CMO.com: How is working with B2B different from B2C from a digital marketing perspective?
Ott: The broadest difference is that attribution of marketing to revenue is more complex because there is a sales force. Digital marketing for a consumer company has different methods to correlate spend to revenue, and most of the digital and Web tools are built for that approach. In B2B, there is a hand-off to a direct sales team.
The two other big differences that comes to play in B2B are, first, you are selling to accounts with many influencers, not just one person, and two, you are working on low-volume, high-value sales opportunities versus consumer goods where you can utilize mass-marketing programs. Typical online B2C companies are doing tens of thousands of credit card transactions a day, while in B2B they are doing about hundreds of deals a quarter. That difference in volume leads to a lot of inefficiency in B2B.
CMO.com: What digital marketing challenges are unique to B2B companies?
Ott: Targeting your spend to make sure it is hitting the right people is so much more difficult. There is ultimately a much smaller audience that will become revenue. The second part becomes relevancy. Because in B2B there are a lot of people involved in the purchase process, there’s no impulse buying. Multiple people have to decide whether they will support a decision and even recommend it to their boss. That makes it more complex to persuade a buyer and give them the relevant messages. Targeting and relevancy is a different digital marketing challenge for B2B.
CMO.com: How is the B2B CMO different from the B2C CMO?
Ott: The role of the B2B CMO is in a significant state of flux right now. Many B2B CMOs are struggling with how to move from marketing being a discretionary expense to an investment in growth, more along the lines of the role of marketing in B2C. The fact that B2B buyers are now completing 60 to 70 percent of the purchase process online, before engaging with sales people, has really shifted more of the burden to marketing to drive revenue.
At the same time, due to the more complicated and longer sales cycle, the B2B CMO has a bigger struggle demonstrating the effect marketing has on revenue and how that spend is managed efficiently. The question is always: Why invest in more marketing when I can just hire another salesperson? It is harder for B2B CMOs to know what is working and, thus, harder to show the value that marketing has on the business and revenue. Part of that is most digital marketing technologies and approaches were developed for B2C; it’s an understatement to say that getting clear, repeatable attribution is difficult. B2C CMOs are under pressure as well, but they typically do not need to convince others on the broader role of marketing or justify the need for it to exist in the same way.
CMO.com: Demandbase worked with AdAge for a whitepaper that says display advertising hasn't been effective for B2B. Why not?
Ott: It is twofold. In B2B you don’t sell to everyone, so broad-reach advertising is hard to be effective. It can work for a retailer, but for B2B untargeted display has too much waste. The second part is because of the longer, more complicated sales cycle, it is harder to measure advertising’s impact on sales than when a cookie can tell you if someone went through your checkout process. B2B companies lacked the tools to target the audiences they care about, and to measure the impact of the investment.
CMO.com: Is there any role for display in B2B?
Ott: That’s what is exciting now. B2B digital technologies are catching up, and may even leapfrog B2C. When you can efficiently target a very specific audience, all the way down to a single company, you can build segments that align to your customer life cycle and use display in more innovative ways. It’s not just for brand awareness–display ads that be targeted can also be personalized, and so can be used to accelerate deals in the pipeline, wake up dormant buyers, and drive retention and upsell with existing customers.
CMO.com: What metrics work for measuring the impact of display for B2B?
Ott: As I mentioned earlier, B2B performance metrics need to be different than B2C due to the nature of the more complex buying process. But B2B is seeing an advantage–unlike B2C, the Web site is the central point of engagement. For the most part, not a sale happens without that buyer going to your Web site. For B2C, most people buy Nike running shoes without ever going to nike.com. Advertising for B2B can uniquely be measured by whether it is driving engagement on your Web site from the companies you are trying to sell to. That Web site engagement becomes a measurable signal of purchase interest.
CMO.com: Personalization is big right now. B2C brands want to have that one-to-one relationship with consumers. How does that work in B2B?
Ott: There is an old saying that all marketing is more effective when you know who you are talking to. Personalization is taking advantage of knowing who you are talking to in order to make an engagement more effective. The difference in effective personalization for B2B again stems from the buying process–optimizing for a relatively low volume of deals and many influencers in the decision process. The driving factor to create relevancy is more about the advertiser’s relationship to the company they are from than an individual’s past browsing behavior. You can serve a different message to someone who is an existing customer than to someone using a competitor’s product, or have a call to action for an account in the late stages of a sales deal. It is actually simpler and broader reaching to use the attributes of a visitor’s company in real time. Of course, that is specific to B2B.
It is similar to what every sales rep knows but used to be reserved for person-to-person engagements. Salespeople go into a sales call and decide what to say based on, “What have I talked to them about, what is the next message they need to move forward?” Digital marketing for B2B begins to act like a live sales rep for personalization and relevancy.