The ROI of brand building in B2B: Data insight quantifies how investing in B2B brand supports B2B sales
The title says this is about data insight so let’s start with some hard numbers. We delivered 3 B2B brand strategy projects in the last quarter of 2023; a review, a refresh, and a complete redefinition… a micro trend at the very least? And in each case we, or the marketing team, had a job to bring their sales colleagues and exec members on board at a time when growing customers and revenue is as critical as it is challenging - making more immediate lead-gen and measurable sales-driving investment more attractive.
Then, in the final weeks of the year I came across a Digiday podcast interview with Airbnb’s global head of marketing Hiroki Asai discussing how, “in the wake of measurement woes and data privacy initiatives muddying digital targeting capabilities, a number of companies - including Airbnb have pivoted to become less reliant on targeting customers via third-party cookies to generate quick sales via performance marketing. Instead, they’ve become more focused on boosting brand awareness to re-familiarize customers with their brand.”
Now, of course the idea that it’s all about one (brand building) or the other (performance / sales) is absurd, and yet the reality of securing share of limited B2B budget inside a business tends to promote partisan interests and behaviour… and framing it as a tug of war makes for good editorial content. But the truth is more subtle, and it reminded me of a Linkedin Institute research study from effectiveness gurus Les Binet and Peter Field first published a few years ago that puts a figure on how the two should be split for maximum impact.
The authors work in the B2C space - The Long and the Short of it - and the 60:40 rule of thumb is well known. They have long advocated for B2C brands to use the data to maintain a balance between short-term sales activation and long-term brand building but in 2019 they analysed a B2B cut of the IPA effectiveness dataset for the first time. What follows is a summary of their conclusions and the five principles of growth in B2B marketing, based on empirical evidence to provide a compass for navigating the dynamic B2B landscape.
Where we’re starting from
Multiple surveys from LinkedIn reveal a misalignment between common B2B marketing practices and the recommended strategies from Binet and Field. Despite the evidence that brand building is a long-term strategy paying off over time, only 4% of B2B marketers measured impact beyond six months. Furthermore:
Only 30% believe advertising impacts pricing power
52% think reach is a strong predictor of advertising success
Over 65% believe businesses grow primarily by increasing loyalty, not customer acquisition
What should we do? Five principles based on hard data evidence
1. Invest in Share of Voice
Binet and Field's data show a robust correlation between market share growth and Extra Share of Voice (ESOV) - in short, investing in brand comms to punch above your weight to become more visible and memorable - for B2B brands. This mirrors the effects seen in the analysis of the B2C dataset, emphasising the importance of maintaining a strong voice for sales conversation over the longer term.
2. Balance Brand and Activation
The report advocates for a balanced budget allocation between long-term brand building and short-term sales activation, with a near 50/50 split between brand and sales activation in B2B - or more precisely 46:54 compared to a 60:40 brand:sales split on average in B2C. A focus on sales activation is, in theory, more likely to yield immediate responses, but the data show that brand building, working on an emotional level, makes the brand more memorable, influencing purchase decisions over time. And supporting sales activation over the long term.
Source: The 5 principle of Growth in B2B Marketing, B2B Institute
3. Expand Your Customer Base
Contrary to the loyalty-centric orthodoxy, the data highlights the effectiveness of customer acquisition strategies in B2B. While it may be obvious that growth is primarily fuelled by acquiring new customers, the key takeaway is that loyalty increases as penetration does.
4. Maximise Mental Availability
Intriguingly, mental availability* plays a crucial role in B2B, challenging the assumption that B2B decisions are thoroughly researched. Campaigns aiming to increase a firm's share of mind prove most effective, emphasising the importance of creating lasting impressions and perceived relevance creating a mental shortcut for the brands a buyer will prioritise, a shortlist to default to in a buying situation.
5. Harness the Power of Emotion
The data highlights the effectiveness of emotional messaging in long-term B2B brand building. While rational persuasion works well for short-term activation, emotional priming engages audiences even when not actively interested in buying.
Source: The 5 principle of Growth in B2B Marketing, B2B Institute
*Mental availability refers to the degree to which a brand comes to mind when a consumer is making a purchasing decision. It's about being present in the customer's thoughts when they are considering a product or service. This concept emphasises the importance of creating a strong and memorable brand presence in the consumer's mind, ensuring that the brand is readily recalled in relevant situations.
Making the case for investing in brand
The empirical evidence from Binet and Field's research provides a robust foundation for CMOs and marketing managers to make the case for continued and increased investment in both brand building and sales activation. Here's how:
Quantifying ROI Over the Long Term: Illustrating the correlation between sustained brand building and long-term growth and the visible, enduring impact of emotional messaging on brand perception
Emphasising Impact on Market Share Growth: Highlighting the statistical significance of the correlation between share of voice and market share growth
Advocating for Balanced Budget Allocation: Presenting the sector-wide data evidence for a 46/54 allocation ratio for B2B marketing
Prioritising Customer Acquisition: Leverage the research findings to negotiate a balanced budget allocation for brand building and activation and an even focus on loyalty and acquisition for overall business growth
Proving the Power of Emotional Connections: share the evidence of the impact of emotional messaging on brand perception and building connection with audiences on a deeper level to create lasting impressions
Conclusion
Binet and Field's principles provide a useful, evidence based roadmap for B2B marketers increasing their investment in brand building, or advocating for a remix of budget. And if our recent experience of increasing demand for brand strategy projects marks the start of a wider trend then we’re happy to share the insight - and even happier to discuss!