Understanding the New Rules for Planning, Allocating and Deploying Media at Scale in A Modern Commercial Model
Businesses will invest a lot of money in an effort to grow revenues and expand their customer relationships this year. Investment in global advertising is estimated to grow to more than $830B in 2023, despite headwinds from an uncertain economy, regulatory concerns, and access to the China market. Spending on the digital marketing and sales channels, content, data, and technology that support these media campaigns will be more than double that number, based on an analysis of the modern marketing mix.
The unique nature of B2B marketing – compounded by the mainstream adoption of digital buying, data-driven marketing, and technology enabled selling channels – has changed the rules for planning, allocating and deploying media at scale in a modern commercial model. This has rendered established approaches for using media to drive growth inadequate to effectively manage the complexities and nuances of B2B marketing in 2023. As a result, many B2B marketing organizations and their agency partners are struggling to optimally size, plan, allocate, and align their investments in paid, earned, and owned media to grow revenues, customer lifetime value, and brand preference. Our research identified nine core challenges B2B CMOs face as they define their media capabilities, investments, partnerships and strategies.
One reason is that many of the rules, tools and best practices for planning, allocating, and deploying media at scale were developed in consumer markets. This is where the media budgets are larger and the commercial model relies more heavily on upper funnel media spending. Consequently, the consumer media market commands most agency focus, effort, and innovation.
A bigger reason is that growing a business-to-business company is very different from growing a business-to-consumer organization. The commercial model is different. The number of buyer persona and the complexity and length of the buying process are greater. The mix of media and its allocation along the revenue cycle – from awareness, demand generation, activation and expansion – varies significantly. And the need of business buyers for both emotional engagement and expertise set it apart from consumer marketing.
For example, buyer research tells us that B2B buyers have become more informed, considered, independent and demanding. The average B2B buying cycle take months, involve six to ten buyer personas, and are guided by more rigorous financial and strategic criteria. months. Over 83% of the buying process is self-directed by the customer. Only 17% involves human reps. In a competitive bidding situation, it’s likely human sales reps will get under 6% of a customer’s total time and attention during their B2B buying journey. And 43% of millennial buyers would prefer to conduct the whole process online with no humans involved if possible.
Another key difference is that B2B customers demand fast, relevant and expert answers to their questions while also needing a reason to believe and act. More than three-quarters of business customers describe their purchase as very complex or difficult, in a Gartner survey. So 87% of business buyers 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.
The mix of media and its allocation along the revenue cycle varies significantly relative to consumer marketing programs. Paid media only makes up a quarter or less of the B2B marketing mix. The deeper the buyer moves into the revenue cycle, the more they rely on owned digital marketing channels like mobile apps, web sites, contactless selling, blogs and commerce sites. These owned channels are supported by value management, thought leadership, and validation content. This content is personalized for buyers in data-driven ABM programs that target and tailor marketing messages and selling content for individual buyer persona and accounts as they advance through the journey.
These differences have only become more amplified with the mainstream adoption of digital buying, data-driven marketing, and technology enabled selling channels.
For example, paid media can no longer work in isolation from other marketing and sales investments. Orchestration and alignment are now important to success. This is because the average organization uses over 20 digitally enabled media, marketing, and sales channels to engage prospects and customers over the revenue cycle according to Forbes and MASB benchmarks. A raft of fast growing digital marketing, sales, and ecommerce channels have emerged in the last twenty five years to take the lions share (over 60%) of marketing budgets. For example, the average B2B organization has 16 owned, earned and paid marketing channels including all forms of paid media and owned channels like email, web site, mobile devices, catalogs, events and mail. And the average B2B and B2B2C sales organizations is using ten additional sales and service channels deeper in the revenue cycle. These include inside sales, customer success, retail, partner, contactless (84%) and direct to customer selling channels (which now represent 17% of overall sales according to a survey of CMOs).
These combined forces have effectively turned growing a B2B business into a data-driven, digital, and technology enabled team sport. That teamwork demands a higher level of alignment and consistency across the functions, systems, data and operations that support the revenue cycle. As evidence, 83% of business buyers are loyal to companies that provide consistency across departments according to Salesforce research. In response, over 90% of B2B organizations are deploying revenue operations strategies to align marketing with sales and customer success teams, systems, data and processes that support the revenue cycle from awareness through expansion.
It’s also changed the economics of growth from driving awareness and demand to maximizing customer lifetime value, recurring revenues, and return on growth assets like brands and digital channel investments. Most B2B boards have focused their growth efforts on driving cross sell and recurring revenue streams with the goal of maximizing Annual Recurring Revenues (ARR), Total Contract Value (TCV), and Customer Lifetime Value. In addition, generating returns on the large investments in owned media, digital selling infrastructure, commercial technology, and customer data assets that support modern selling has become paramount. These now represent the largest financial assets on the company balance sheet according to the book Revenue Operations.
Many marketing organizations and their agency partners struggle to navigate these fundamental differences and rapidly changing commercial dynamics. CMOs are struggling to allocate and align their growth investment in paid, earned, and owned media in ways that accelerate growth, maximize customer lifetime value, and differentiate their brands. The problem is compounded by the fact that most of the prevailing media practices and specialized agencies CMOs look for answers have built their capabilities around consumer advertising – where the largest budgets lie. The net effect of these changes has rendered established models for planning, allocating, and deploying marketing programs inadequate to effectively manage the complexity of media-led growth programs in a 21st century commercial model.
Specifically, growth leaders are struggling in nine areas:
1. Optimally allocating paid, earned, and owned media to maximize return on investment, customer acquisition, and revenue expansion;
2. Generating economies of scale in media targeting, buying, analytics, technology, and content across many customers, markets and geographies;
3. Aligning media with marketing, sales, partner, and service channels to better support Account Based Marketing, retention, cross sell and expansion programs;
4. Enabling personalization at scale to support ABM, persona-based messaging, localization, targeted digital media, and dynamic messaging;
5. Developing the core commercial capabilities in analytics, data management, technology, omnichannel and owned channel management required to execute modern marketing programs.
6. Enabling financially valid measures of performance and attribution to quantify the contribution of media investments to customer lifetime value and firm financial performance in a long, complex and multi-channel customer journey;
7. Orchestrating omnichannel go-to-market programs that blend media with other digital, sales and partner touch points;
8. Controlling message consistency and compliance of messages across paid, owned, and earned marketing channels;
9. Structuring resources and teams across markets to optimally leverage talent, insights, analytics, technology, media buying, and content on a global, regional, and local market level.
To help B2B CMOs address these issues, the faculty of the Revenue Enablement Institute is undertaking A Connected Media Study to identify the best practices for managing, optimizing, and maximizing the impact of media programs at scale in a modern commercial model. Our research will address these nine core problems in depth. We welcome B2B CMOs, Media heads and growth leaders to participate in our research by conducting an interview with our expert faculty and learn from our findings and network of peer B2B CMOs. Investing 45 minutes to participate will give you access to the best practices and findings of the study, our network of peers, and our world class faculty of academics and practitioners. You can learn more and contact us to arrange an interview at the Revenue Enablement Institute web site.